FAIR Canada plans to focus on four strategic priorities for 2011. These priorities were the result of deliberations by the board of directors at our October 2010 strategic planning meeting.

1. Investor representation in securities regulation
   • An imbalance of power exists between retail investors and the financial services industry. Although Canada has a number of dedicated independent investor advocates, increased consumer engagement in securities regulation and retail investor input in policy development is necessary to counterbalance industry influence.
   • FAIR Canada will advocate for increased prioritization of investor protection and greater representation of retail investors in securities regulation. FAIR Canada will encourage the Canadian Securities Administrators’ members, Canadian self-regulatory organizations (“SROs”), the Canadian Securities Transition Office, the proposed Canadian Securities Regulatory Authority, and government to give priority to investor issues through investor advisory panels and other means.
   • FAIR Canada will submit comments on all relevant requests for comments issued by Canadian securities regulators (including SROs) and government. These comments will focus on investor protection aspects of policy development.
2. Combating financial fraud and improving compensation for victims
   • Financial fraud is a major problem in Canada. The current system does not provide sufficient investor protection or compensation, nor does it adequately deter or punish fraudsters.
   • FAIR Canada will develop a strategy aimed at
     1. improving the prevention, detection, investigation, prosecution, and punishment of financial fraud;
     2. educating investors, especially vulnerable groups, about the importance of dealing with registered individuals or firms and the implications of SRO membership and compensation fund backing; and,
     3. improving avenues of compensation for victims of financial fraud.
3. Mutual funds and advertising of financial products
   • Canadians pay higher fees for mutual funds and other financial products than investors in other developed markets. Disclosure of fees and risks in financial products and regulation of marketing and advertising is inadequate.
   • FAIR Canada will investigate and analyze the impact of complex and high-fee products on investors. FAIR Canada will issue a report focused on mutual funds’ disclosure and fees.
   • FAIR Canada will also review advertising and marketing of mutual fund and other financial products by the financial services industry and advocate for requirements for fair, balanced and objective advertising so that retail investors are not mislead.
4. Client-financial advisor relationship
   • Retail investors depend on the integrity of the client-financial advisor relationship and many rely on registered professionals to provide financial advice and recommend products that are in their best interests. However, current regulatory requirements are not aligned with consumer needs and expectations.
   • FAIR Canada will stimulate discussion about the client-financial advisor relationship to encourage a better alignment of the interests of retail investors and financial advisors, and will advocate for the adoption of a requirement that registrants have a duty to act in the client’s best interests.