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August 2016
FAIR Focus
FAIR Canada's Monthly Review
Helping Investors Understand CRM2
How much are you paying for investment advice? And how does that relate to the returns you receive on your investments? New investment reports are going to be released this year as part of CRM2 which will provide information on what charges investors have paid to their dealers and advisors and what their real rates of return are on their investments. FAIR Canada hopes that investors will review the new reports from their advisors and ask these questions.
We can appreciate that investment reports may not be the most exciting material to review, and that perhaps not all investors will want to dive into the new disclosure they receive! In order to help investors understand the new reports and to make the review process as easy as possible, FAIR Canada has created a video series, "How Much You Made and What You Paid", that will take investors through each of the reports. We hope that investors will use these videos as they review their new reports and hope that the videos can help investors make sense of this new, important information.
We also want to let you know that the deadline for submissions on CSA consultation document 33-404 regarding certain targeted reforms to dealers and their representatives and the introduction of a proposed best interest standard has been extended to September 30, 2016.

Best wishes for the month ahead. 

The Team at FAIR Canada 
FAIR Canada is pleased to announce the release of its new video series How Much You Made and What You Paid. The video series takes investors through the new annual reports that they will receive from their investment advisor or financial planner as a result of phase two of the Canadian Securities Administrators "client relationship model" project (CRM2). Investors can expect to receive their first copy of these reports between July 15, 2016 and July 15, 2017.

The reports are designed to help investors better understand the costs associated with their investments as well as understand the real rate of return their investments achieve. The first statement, the annual investment performance report, will show you the annual performance of your investment. The second statement, the annual charges and compensation report, will show you the annual costs of your investments.

The How Much You Made and What You Paid video series - a total of 7 videos - also includes an explanation of important issues that are related to the new reports, including understanding money-weighted returns and time-weighted returns, calculating benchmarks, and  how to account for trailing commissions and deferred sales charges.

FAIR Canada encourages you to watch our video series that helps explain the cost reporting and performance reporting statements that are now required to be sent to investors. 
FAIR Canada is particularly pleased to see that protection of investors has been added to the purposes section of the CMSA. 

With respect to enforcement matters, FAIR Canada urges the Minister to ensure that the federal authority hires staff with the appropriate expertise to carry out a robust enforcement regime. We also encourage the Minister to enter into MOUs with other Canadian financial services regulators, and criminal enforcement bodies, in order to bolster the federal authority's enforcement capabilities. FAIR Canada also asks that the Minister develop a more fulsome whistleblower program which provides for confidentiality and financial incentives. We also urge the Minister to revise the CMSA so that whistleblower protections will extend to independent contractors under section 63 of the CMSA. 

With respect to the CMSA's provisions on data collection (section 9 of the CMSA), FAIR Canada asks that the Minister include additional wording in order to ensure that the practical realities of the proposed data collection regime lead to effective and valuable data collection. We are concerned that the current language used in the CSMA will not make it easy for the federal authority to obtain data that can be easily used in a timely manner. 

Finally, FAIR Canada asks the Minister to reconsider the proposed definition of "security" in the CMSA. We are concerned that the definition, as currently drafted, will lead to the carve-out of certain investment products, and this will erode and undermine the mandate of investor protection. Click here to review the full submission.
If Equity Crowdfunding is a Dud, Let it Die
The trickle of interest in the U.S. has prompted some lawmakers there to conclude that the design of the exemption must have been bungled. Read the full editorial here.
MediaFAIR in the Media

Save the Date for upcoming Shareholder Rights Conference:
Are Shareholder Rights Relevant in Today's Capital Markets?
FAIR Canada, The Program on Ethics in Law and Business at the University of Toronto Faculty of Law and the Canadian Coalition for Good Governance are pleased to co-host a conference examining shareholder rights in Canada. Friday, October 28th, 2016 from 9:00 am to 1:00 pm. Click here for more details. 
Is it Time to Update the Rules Relating to Defensive tactics?

Discount Brokerages still Pocketing Advisor Fees
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