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FAIR Canada's Monthly Review
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Investor Protection and Regulators' Priorities
As we begin the month of June, FAIR Canada is looking at key changes underway in the investment industry.
First, as of May 30, 2016 investors are now required to be provided with a copy of the mutual fund "Fund Facts" disclosure document before they purchase a given mutual fund. We hope Fund Facts will help investors understand more about a mutual fund before they commit to buying it.
Second, the CSA has committed to issuing a policy direction on mutual fund fee reform by the end of June.. FAIR Canada has advocated for a ban of conflicted compensation structures including, importantly, a ban on embedded commissions in mutual funds (also known as trailing commissions).
Third, it won't be long before investors will begin receiving two new statements on their investments - an annual investment performance report and an annual charges and compensation report - as part of the roll out of CRM2. These statements - to be initially released from July 15, 2016 until July 15, 2017 - are designed to help investors better understand (a) the costs associated with their investments and (b) the personal rate of return on their investments.
Fourth and finally, the CSA consultation on improving the client-advisor relationship (including consideration of a "best interests" standard) is underway. Comments on this consultation are due by August 26, 2016, and we look forward to providing comments and hope that a meaningful best interest standard will be implemented in the near future.
Best wishes for the month ahead.
The Team at FAIR Canada
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FAIR Canada provided FSCO with comments on its Draft 2016 Statement of Priorities. FAIR Canada urged FSCO to take into account reports from the Auditor General and the IMF, as well as comments made in the Ministry of Finance Expert Panel's Preliminary Position Paper. FAIR Canada also urged FSCO to engage with consumer groups when drafting its 2016 Priorities, noting how important it is for regulators to implement effective processes for consumer engagement within the policy-making process. Read FAIR Canada's full comments on FSCO's draft 2016 Priorities here.
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FAIR Canada Comments on the OSC's Draft Statement of Priorities
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FAIR Canada provided comments on the Ontario Securities Commission's (OSC) draft statement of priorities for 2016-2017 (the Draft Priorities). While FAIR Canada is happy to see that the OSC's core mandate, investor protection, shines through the Draft Priorities, there are additional priorities the OSC should include in the interests of having a regulatory system that provides meaningful protection to investors in Ontario. We urge the OSC to include these issues as priorities in 2017. Read our full comments here.
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Investment Professional or Faux Pro: Which Will You Be?
It's time for advisors who want to be true professionals to make their voices heard in support of some real reforms. Read Neil Gross's thoughts on professionalism here.
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