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FAIR Canada Newsletter
August 2014

FAIR Canada Announces New Funding from Regulators

The Canadian Foundation for Advancement of Investor Rights (FAIR Canada) announced last week the receipt of significant new funding from both the Ontario Securities Commission (OSC) and the Investment Industry Regulatory Organization of Canada (IIROC).

 

The OSC has provided a $2.5 million contribution toward FAIR Canada's fundraising campaign. The OSC's contribution comes from funds collected from monetary sanctions and settlements.

 

"We are thrilled that the OSC has again demonstrated its strong support of FAIR Canada's work through a substantial funding contribution," said Neil Gross, Executive Director of FAIR Canada. "FAIR Canada has developed an ambitious fundraising plan and we are grateful to lead donors like the OSC and Stephen Jarislowsky for getting our campaign off to a terrific start."

 

Earlier this year, FAIR Canada announced that one of its long-standing directors, Stephen Jarislowsky, had made a $2 million contribution which challenged FAIR Canada to raise at least an additional $4 million to provide a $6 million endowment fund.

 

"The OSC's contribution will go a long way to meeting this challenge and will help to provide a sustainable basis of funding for the organization going forward. FAIR Canada encourages like-minded individuals and organizations to contribute to our campaign," said Gross.

 

Click here to read the rest of the story. 

 

Robo-advisors might prompt shift to best interests standard

For decades, financial advisors have had access to advanced software that can use know-your-client data to categorize investors and prepare model portfolios for them. Some of these programs also use more sophisticated algorithms designed to help formulate recommendations for specific reinvestment of dividends, rebalancing of client portfolios and tax-loss harvesting on an ongoing basis. What's new, however, are service delivery models in which these powerful tools are made available directly to clients online.

 

These are the so-called "robo-advisors" that are designed to be used primarily with portfolios of exchange-traded funds, dialed to set-it-and-forget-it automatic mode, and wrapped in a very low monthly subscription price. They're quickly gaining popularity, especially among the key demographic of investors aged 20 to 40 years old - a digitally astute cohort very comfortable with online services.

 

This story originally appeared as an Inside track op-ed in the online version of Investment Executive. To read the rest of the article on our website, click here.

 

FAIR Canada in the News

 

FAIR Canada's funding announcement garnered some media coverage, including the following:

Earlier in August, FAIR Canada released a research report entitled "A Canadian Strategy to Combat Investment Fraud". The report provides an overview of the types of securities fraud that affect retail investors and attempts to evaluate the Canadian system in place to protect investors from such fraud. This report has received a significant amount of media attention, including the news coverage below:

FAIR Canada works to bring important investor issues to the attention of media, the Canadian investing public, regulators, government, and industry participants. Other recent FAIR Canada news coverage this month included:

  • Borrowing against home to invest: pros and cons (Winnipeg Free Press) - Marian Passmore is quoted in an article by Joel Schlesinger on leveraged investing strategies, noting that encouraging investors to borrow to invest is a systemic or widespread problem and there should be a presumption that borrowing to invest is not suitable.

For more media coverage, please click here.

 

CSA Continues to Propose Changes that Would Reduce Venture Issuer Governance and Disclosure

 

FAIR Canada has provided comments to the Canadian Securities Administrators (CSA) in response to the fourth iteration of their consultation on venture issuer governance and disclosure. FAIR Canada continues its warning that regulators should be careful not to reduce the level of disclosure or reduce governance standards. We note that this will result in informational gaps for investors and increase the risks of investing in an already risky venture issuer market. FAIR Canada notes that reduced disclosure and governance will not help improve confidence in the venture capital market.  FAIR Canada accordingly does not support the proposed reduction in executive compensation disclosure, changes in the requirements to disclose business acquisition reports or the requirement to disclose quarterly management discussion and analysis. We do support the proposed enhanced requirements for impartiality by venture issuer audit committees and suggest enhancements to this proposed change. 

 

To read the rest of the story, please click here

 

FAIR Canada is a national, charitable organization dedicated to putting investors first. 
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