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April 2016
FAIR Focus
FAIR Canada's Monthly Review
Is a Best Interest Standard on the Horizon?
The Canadian Securities Administrators recently announced they will seek public comments on proposals, to be published in April, for regulatory actions aimed at strengthening the obligations that advisers, dealers and representatives (registrants) owe to their clients. FAIR Canada believes that a statutory best interest standard is urgently needed in Canada in order to achieve increased protection for investors, better financial outcomes for investors, more effective competition, an increased level of professionalism in the financial services industry, and an increase in the level of public trust in the financial services market.
FAIR Canada looks forward to reviewing and commenting on the CSA's proposals. The comment period will be 120 days. We encourage you to review and comment on the proposals, as well. FAIR Canada also encourages you to review and provide comments on the Ontario Securities Commission's draft Statement of Priorities for 2016-2017 (discussed further below), which has a considerable focus on investor protection issues. Comments for this consultation are due by May 9, 2016. 

Best wishes for the month ahead. 

The Team at FAIR Canada 
OSC's Statement of Priorities Focuses on Investor Protection
In its draft Statement of Priorities for the upcoming year through March 2017, the OSC has indicated it will focus on ensuring that the investor/advisor relationship is well functioning. This will include ensuring that the advice investors receive is appropriate and unbiased, and that investors have confidence in the fairness of the markets and products in which they invest. Read full article here.
MFDA Considers Expanding CRM2 to Total Costs of Managing Investments
FAIR Canada has consistently supported uniform cost disclosure and performance reporting requirements for all registrants, whether regulated by the MFDA, the Investment Industry Regulatory Organization of Canada ("IIROC") or directly by a member of the Canadian Securities Administrators ("CSA") so that investors can answer basic questions about their investments. Under CRM2 investors will be provided with statements that disclose the charges they have incurred related to their account and the securities transactions in their account along with disclosure of the compensation that has been received by their dealer, including the dollar amount of trailing commissions. FAIR Canada sees value in improving disclosure for investors and appreciates that it may be beneficial for consumers if disclosure is expanded beyond CRM2's requirements so that investors know the total costs of managing their investments (including costs charged by the investment fund manager rather than those that are received by the dealer such as management fees and fund operating costs that are associated with mutual funds). Read FAIR Canada's full comments here.
FAIR Canada Comments on CSA Risk Classification Methodology
FAIR Canada supports mandating a standardized methodology for the risk ratings of mutual funds and ETFs but believes that changes to the Proposed Methodology are necessary. Given our understanding of what matters to investors and the document testing that was conducted with investors, changes are needed. FAIR Canada urges the CSA to live up to international best practices and principles with respect to disclosure of risk. Finally, we believe that summary documents should be expanded to other investment products such as structured products and alternative investment funds. Fund Facts risk disclosure should be designed now so as to take into account other investment products that should also be subject to summary disclosure, so that meaningful comparisons can be made. Read FAIR Canada's full comments here.
Overview of Changes to Take-Over Bid Rules
The CSA recently published final amendments to NI 62-104 Take-Over Bids and Issuer Bids (the "Take-Over Bid Rules" or "Rules")FAIR Canada provided the CSA with comments on the amended Rules during the consultation process. Read full article here. 
Fraud prevention requires detention
Deterrence is the key ingredient, but it won't be achieved through fines and public education. Read full article here.
MediaFAIR in the Media
Investment Executive -  Opposition to OBSI

Investment Executive -  Time to get rid of commissions?

Investment Executive -  Risk and exempt-market investing

Investment Executive - Communicating risk
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Who is FAIR Canada and what does FAIR Canada do? Find out more about us here. 
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