FAIR Canada
FAIR Canada Newsletter

August 2011

Dishonest Advisors Continue to Prey on Investors in Canada

Canada needs to prevent dishonest securities registrants from continuing to sell investments or advise the public. Given the fragmented system of financial services industry regulation in Canada, registrants who are disciplined for misconduct are all too often able to avoid proper sanctioning and evade bars to selling investments. Time and again, former registrants simply move platforms to sell in the exempt market (where individuals and firms are not required to register in certain western provinces) or, for example, sell insurance despite having been found to have been dishonest or otherwise not of sufficient integrity to deal with investors.

Disciplined Advisors Continue to Sell Investments


The press has reported on many cases where dishonest, former registrants continue to be in a position of trust with the public despite the fact they have been prohibited from selling any securities for a given period of time or have been barred from the securities industry.


Read more about how financial advisors ignore SRO fines...


US Conference on Financial Fraud Research, Prevention and Detection


In the U.S., Stanford University's Center on Longevity and the FINRA Investor Education Foundation have joined together to launch the Research Center on the Prevention of Financial Fraud, an interdisciplinary resource for law enforcement, government and research groups studying financial fraud.


Read more about the US Conference and FAIR Canda's report on financial fraud...


Restoring investor confidence interview on BNN  


On August 24, FAIR Canada's Executive Director, Ermanno Pascutto, appeared on BNN's Headline with Howard Green to discuss retail investor trust and confidence in the financial industry. He stresses how important it has become for Canadian regulators to impose a duty on those who provide financial advice to act in their clients' best interests. Mr. Pascutto points to a misalignment of investor expectations and advisors' actual duties under the current rules and suggests that the best solution would be to impose a best interests requirement.


Please click here for Part 1, Part 2, and Part 3.


Key mutual fund information to be delivered after sale  


The CSA has announced proposed amendments that will permit mutual fund providers to deliver Fund Facts documents to investors, instead of the simplified prospectus, two days after a sale under Stage 2 of its point of sale initiative. Fund Facts were designed to be delivered to potential purchasers prior to the sale (i.e. at or before the "point of sale") so that they could make an informed purchase decision. Under the original point of sale framework, Fund Facts were intended to provide investors with key information about a mutual fund at a time relevant to their investment decision.


Click here to read about how regulators lost sight of the core objective of the point of sale initiative...


FAIR Canada Appointed as Investor Representative to OSC's Investment Funds Product Advisory Committee

One of FAIR Canada's strategic priorities is to advocate for increased prioritization of investor protection and greater representation of the retail investor perspective in securities regulation. We are pleased to announce that the OSC has appointed Marian Passmore, FAIR Canada's Associate Director, to its Investment Funds Product Advisory Committee.

Click here for the press release.


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