Top News

Nov 10 2014

What needs to be said about what not to say

At long last, we’re reaching implementation of the regulatory initiative known as CRM2 (shorthand for the second phase of the client relationship model). Once it kicks in fully in July 2016, investment firms will have to give clients clear and straightforward information about how their investments are performing and how much they’re paying for the service their advisors provide. In a word, CRM2 is all about transparency. Getting to this point hasn’t been easy. Progress has been slowed by the investment industry’s deep worry that CRM2 may cause seismic upheaval when investors are shown the full cost of products they’ve been sold and…

Nov 05 2014

Does Disclosure Work?

FAIR Canada and Rotman School of Management’s Capital Markets Institute hosted a successful conference on October 28, 2014 entitled “Does Disclosure Work?”. Following a keynote address from Susan Wolburgh Jenah, subject-matter experts Christopher Nicholls , Dilip Soman, and Sunita Sah each presented formally on their area of expertise to set the context for the day’s discussion. Christopher Nicholls…

Oct 29 2014

FAIR Canada Announces Corporate Donations

The Canadian Foundation for Advancement of Investor Rights (FAIR Canada) today announced that Manulife Financial Corporation has committed to provide FAIR Canada with a donation in the amount of $300,000 payable over the next three years. In accordance with FAIR Canada’s corporate donation acceptance policy and at Manulife’s request, the donation is being made entirely on an arms’ length basis and without conditions….

Oct 24 2014

FAIR Canada Releases Accountability Report

We are pleased to present FAIR Canada’s Accountability Report Jan 2012 – Jun 2014. This report covers our activities from January 2012 through June 2014, picking up where our first accountability report left off. The report provides an overview of FAIR Canada’s mission, the need for a retail investor representative in securities regulation, our strategic priories for the next three years, and a summary of our activities. It also includes information about our notable initiatives, organizational milestones and governance, as well as financial information…

Oct 17 2014

SEC’s Investor Advisory Committee Backs Reform of Accredited Investor Definition

The U.S. Securities and Exchange Commission’s (SEC) Investor Advisory Committee recently made recommendations relating to the accredited investor (AI) definition. The Investor Advisory Committee noted that it expects that a closer analysis will reveal that “a significant percentage of individuals who currently qualify as accredited investors are not in fact capable of protecting their own interests…”, noting that “the current definition is, at best, a highly imperfect proxy for financial sophistication and access to information.” The SEC is…

Oct 16 2014

KYP in A Complicated World

Investment advisors are required to understand the structure, features and risks of every investment they recommend. This requirement is called the know-your-product (KYP) rule. It’s an easy rule to recite, but it’s sometimes a challenge to put into practice — especially when the product is new and complex. Take, for example, synthetic exchange-traded funds (ETFs). Unlike ordinary ETFs, synthetic ETFs don’t mirror their benchmark index by owning a basket of stocks replicating that index. Instead, synthetic ETFs use derivatives to mimic the benchmark’s performance. This is innovative and apparently offers some advantages in the form of reduced costs and lower tracking errors, but it also gives rise to concern in some quarters…

Sep 23 2014

FAIR Canada Announces Disclosure Conference in Partnership with U of T’s CMI

FAIR Canada is pleased to announce that the panelists for our disclosure conference, hosted with the Capital Markets Institute at the University of Toronto’s Rotman School of Management, have been confirmed and that registration is now open. The conference will take place on Tuesday, October 28, 2014, from 8:00 am – 12 pm at Rotman School of Management in Toronto. Please sign up online HERE by noon on October 27, 2014 if you are interested in attending…

Sep 23 2014

Guy Lemoine Appointed to FAIR Canada’s Board at AGM

At the Annual General Meeting (AGM) of the Canadian Foundation for Advancement of Investor Rights (FAIR Canada) held in Toronto, Ontario on September 23, 2014, members elected eleven individuals to the FAIR Canada Board of Directors. New to the Board is Guy Lemoine of Montreal. M. Lemoine is a lawyer, a former vice-chair and commissioner of the Quebec securities commission (1990 – 2003) and former president of its adjudicative body…

Sep 15 2014

Does Disclosure Actually Work?

There are two articles of faith in securities regulation concerning public disclosure of information. The first is that disclosure will level the playing field by reducing knowledge asymmetries. The second is that disclosure allows conflicts of interest to be managed instead of simply forbidden. Underneath all this is a crucial assumption. We assume that if disclosure is thorough enough, plainly-worded enough and sufficiently timely, then investors can and will use the information…

Sep 11 2014

FAIR Canada Comments on the MFDA’s CRM2 Amendments

FAIR Canada has submitted comments on the MFDA’s proposed amendments to its rules to implement the CRM2 Amendments. The amendments provide for pre-trade disclosure of charges and annual reporting of performance and costs and fees incurred, including the amount of payments received by third parties (such as trailing commissions). Canada’s self-regulatory organizations, namely the MFDA in this instance…

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