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IFB responds to CSA announcement on its harmonized response to concerns with the client-registrant relationship


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June 21, 2018

IFB welcomes the announcement today that Canadian Securities Administrators (CSA) members have reached agreement on a set of reforms to enhance the relationships between investors, advisors and firms.  IFB says the CSA has presented a balanced set of reforms that will be positive for investors, while not harming market competition by introducing certain changes that would have had a disproportionately negative effect on smaller, independent firms and advisors.

“In particular, IFB is pleased that the CSA has not proposed a ban all embedded commissions”, said Scott Findlay, IFB’s Chair. “At an OSC roundtable on this topic, I said that – as an advisor myself – I share with many IFB members the concern that a ban on embedded mutual fund commissions would be extremely detrimental to clients, especially those with smaller accounts, and that paying an upfront fee would not be a viable option for most.”

“It’s also important to IFB members that the CSA has been able to achieve agreement not only on these policy issues, but on measures that the securities commissions in Ontario and New Brunswick could agree to, in place of an over-arching best interest duty”, said Nancy Allan, IFB Executive Director.  “It has been a major concern of IFB’s, that if the CSA could not arrive at a harmonized approach, registrants conducting business in multiple jurisdictions would face a fragmented regulatory system that would not serve investors, or the industry, well”, added Allan.

IFB will undertake a more detailed review of the proposals, and their impact on IFB members, in preparation for a formal response to the CSA by the October deadline.  IFB will also monitor any developments arising from discussions between the CSA and life insurance regulators on these policies, as many IFB members are both life insurance and mutual fund licensees.

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