Top News

Jan 22 2015

FAIR Canada Objects to IIAC’s Request for Delay in CRM2

At the request of the CSA CRM2 Committee, FAIR Canada has submitted a letter opposing IIAC’s request for a delay in the implementation of CRM2. FAIR Canada is of the view that the facts and arguments put forward by IIAC do not establish that there is insufficient time to successfully implement CRM2’s requirements within the existing timeframe. It is not enough to show that some problems have arisen causing delays on some fronts. Absent clear demonstration that additional resources cannot…

Jan 19 2015

If There Must Be an OM Exemption, Make it Safer

Bringing the offering memorandum (OM) exemption to Ontario presents risks for investors. It’s doubtful those risks can be truly mitigated. But if regulators decide to go forward with this initiative, they should at least adopt whatever measures they can to ensure the OM exemption doesn’t do more harm than good. The potential for harm has been amply demonstrated in provinces that allow the use of OMs. Regulators have repeatedly found widespread, serious defects in the OMs being used. They’ve also found extensive non-compliance with basic practice requirements by…

Jan 16 2015

FAIR Canada Opposes Watering Down of IIROC Membership Disclosure Requirements

FAIR Canada supports efforts to promote and raise awareness of IIROC, its regulatory function, and the fact of dealer members’ membership in the Canadian Investor Protection Fund. This helps investors assess the regulatory status of members firms and/or individual registrants. However, we are disappointed that IIROC has watered down the obligations contained in the Disclosure Policy by removing the requirement to include the IIROC Logo on client trade confirmations and account statements. We question the adequacy of the cost/benefit analysis that has been performed in order…

Dec 22 2014

Supreme Court grants FAIR Canada intervenor status in CIBC v. Green appeal hearing

FAIR Canada has been granted leave to intervene in the Supreme Court of Canada as part of the CIBC v. Green, Imax v. Silver et al and Celestica Inc. v. Huacheng Xing cases. As we did before the Ontario Court of Appeal, FAIR Canada will provide the Supreme Court of Canada with the retail perspective on: the ability to obtain compensation through the secondary market disclosure liability regime under Part XXIII.1 of Ontario’s Securities Act…

Dec 16 2014

Clients Aren’t Anyone’s Property

Ugly legal fights sometimes break out when investment advisors decamp from one dealer and go to work at another. The advisor typically views his or her clients as a personal “book of business,” built up through hard effort, and thus an asset that rightfully should transfer with the advisor. But the dealer being left behind usually sees the matter quite differently. To the firm, customers are clients of the dealer, whose business the advisor was handsomely paid to develop and secure. Even a moderate exodus can prompt accusations that the advisor and new dealer conspired to illicitly harm the former dealer’s business. All sides quickly lawyer up and, within a day or two, they’re in court arguing about whether an injunction should be granted to prevent further solicitation of accounts…

Dec 09 2014

FAIR Canada Comments on the Governance and Legislative Framework of the Cooperative Capital Markets Regulatory System

FAIR Canada has provided comments to the jurisdictions participating in the Cooperative Capital Markets Regulatory System (“CCMR”) on the proposed governance and legislative framework for the CCMR. FAIR Canada welcomes efforts made by governments and regulators to improve and enhance cooperation with respect to securities regulation and capital markets in Canada. We urge governments and regulators to not lose focus on several important investor-focused initiatives that are currently underway – namely, the mutual fund fees and statutory best interest standard initiatives…

Nov 28 2014

Review of Proficiency Framework Warranted

FAIR Canada’s comments on IIROC’s recent proficiency assurance consultation focus on the need to reevaluate the current proficiency framework. As we point out in our submission, the current proficiency framework was designed, many decades ago, around the sales process, for salespeople. The educational and professional standards for registrants are structured around the particular products representatives are permitted to sell…

Nov 28 2014

Comments on IIROC’s Phase 2 of the Client Relationship Model

FAIR Canada provided comments to the Investment Industry Regulatory Organization of Canada in favour of the proposed amendment contained in the IIROC 2015 and 2016 CRM2 Amendments which will result in investors being provided with more complete information than in the previous IIROC proposed amendment. If the dealer or adviser is the dealer or adviser of record for the client…

Nov 28 2014

Asset Backed Securities Must Retain Risk

FAIR Canada has urged the Canadian Securities Administrators to require retention of risk in securitization as well as stressed the need for transparency and detailed, complete and accurate information about asset-backed securities. It is essential that investors have the information they require to assess the level of risk. In the United States, federal regulatory agencies responsible for implementing regulations under The Dodd-Frank Wall Street Reform and Consumer Protection Act have finalized rules for risk retention requirements in asset-backed securities transactions. FAIR Canada recommends that the CSA do the same…

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…

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