The Autorité des marches financiers (AMF) has announced a consultation on compensation of consumers of financial products and services in Québec. The AMF is seeking information on:
- The role of compensation among measures intended to protect consumers of financial products and services;
- Accountability of consumers and representatives;
- Fundamental objective of a compensation system;
- Approach with respect to consumer compensation;
- Responsibility for managing mechanisms intended to compensate victims of financial crime;
- Products, representatives and conduct covered by the compensation fund;
- Funding the compensation fund and cost containment measures.
FAIR Canada commends the AMF and encourages the other members of the Canadian Securities Administrators to undertake consultations with a view to ensuring an appropriate compensation framework is in place for victims of financial fraud in Canada. FAIR Canada has stressed the need for compensation for losses resulting from the insolvency of registrants (see our Financial Scandals Report), including those due to fraud. Many registrants are not currently covered by compensation funds and these registrants tend to be the high risk ones. Addressing this gap in compensation should be a priority for regulators.
