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September 2016
FAIR Focus
FAIR Canada's Monthly Review
FAIR Canada and Osgoode join forces to build Canada's first investor protection clinic
FAIR Canada is excited to announce that is has successfully received two grants from the Law Foundation of Ontario's Access to Justice Fund.
FAIR Canada, in conjunction with Professor Poonam Puri of Osgoode Hall Law School, was awarded start-up funding to establish Canada's first Investor Protection Clinic. The clinic, which will be staffed by law students, will provide assistance to investors who believe they have been harmed or wronged. Individuals who come to the clinic will receive assistance regarding their complaint or concern regardless of which regulatory silo the investment or problem arises from. We are confident that the project will be of tremendous value: by helping investors navigate the fragmented systems that regulate investments in Canada it will provide much needed assistance to investors who believe they have been harmed. We look forward to updating you as we move forward. Stay tuned for more from FAIR Canada and Professor Puri as we build Canada's first Investor Protection Clinic!
FAIR Canada also received funding to conduct a study that will help to develop a clear protocol setting out the circumstances in which protective action can and should be taken for the benefit of clients who suddenly appear to have lost mental capacity (due to dementia or otherwise) or clients who appear to be acting under duress (including elder financial abuse). The study will entail a comparative analysis of  legislative and regulatory initiatives in different jurisdictions as well as stakeholder consultations. The study will also examine what action steps are appropriate. We look forward to sharing more details of the project once the study is underway. 

Best wishes for the month ahead. 

The Team at FAIR Canada 
The Canadian Foundation for Advancement of Investor Rights (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 (CCGG) invite you to discuss shareholder rights and the relevance of shareholder rights in today's capital markets on the morning of Friday, October 28, 2015.
As institutional shareholders and hedge funds gain prominence in today's capital markets, shareholder rights have been under the microscope: Has corporate law kept pace with the changing nature of capital markets and growth of different types of shareholders? Is "shareholder democracy" an outmoded concept? Do securities regulators have a responsibility to respond to shareholder activism? If so, how? Where do the interests of retail shareholders sit in the analysis?
The conference will include a comparative view of Canada and the United States, with a focus on recent developments in shareholder activism and the rights that permit such activism to occur.

For program details, click here. To register, click here.
Scotia Capital Inc., Scotia Securities Inc and Holliswealth Advisory Services Inc. on July 29, 2016 agreed to a no-contest settlement with the OSC over fee overcharges in the amount of nearly $20 million which date back as far as 2009 and affect 45,703 client accounts that were invested in mutual funds, ETFs and structured products. Staff of the OSC determined that the Scotia dealers failed to establish, maintain and apply procedures and to establish controls and supervision. The dealers self-reported the issues to the regulator starting in early 2015. The most sizable wrong was charging an account fee and a trailing commission to 30,218 clients for certain structured products amounting to $10 million in overcharging. Another mispricing of fees occurring when 12,751 clients were not advised that they met the portfolio size threshold necessary to purchase a class of mutual funds with a lower management expense ratio (MER), amounting to overcharges of $8.9 million. Scotia dealers agreed to a voluntary payment of $850,000 to the OSC. As part of the settlement, the dealers do not admit nor deny the allegations.

TD Waterhouse Private Investment Counsel Inc., TD Waterhouse Canada Inc. and TD Investment Services Inc. also agreed to a no-contest settlement back in November 2014 over excess fees resulting from inadequate systems and controls and supervision wherein they agreed to pay $13.5 million to clients and make a payment of $650,000 to the OSC.

The OSC also approved a no-contest settlement agreement with CI Investments on February 10, 2016 in relation to matter that CI Investments had self-reported to the OSC. OSC Staff alleged that investors were buying and selling units from CI Investments at an understated value as a result of insufficient monitoring and oversight of CI Investments's control systems. Approximately $156.1 million was returned to the harmed investors.
CSA Consultation on Best Interest Standard 
The deadline for submitting comments on the CSA consultation 33-404 - Proposals to Enhance the Obligations of Advisers, Dealers and Representatives, towards their clients, wherein a best interest standard is proposed by some jurisdictions, has been extended to September 30, 2016. We encourage readers to submit comments.
Why is deficient issuer disclosure allowed to persist?
Data shows that investors routinely receive, or are at risk of receiving, seriously bad disclosure from reporting issuers more than a quarter of the time. 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 or to register.
How the ETF industry is Evolving

Millennials most likely to be victims of fraud according to Better Business Bureau survey

Should Retail Investors be Concerned About the Shrinking Number of Canadian Public Companies?

The Risks of Close-Ended Funds
AboutWant to know more about FAIR Canada?
Who is FAIR Canada and what does FAIR Canada do? Find out more about us here.
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