From the Regulators

Deadline for new reports on investment cost and portfolio performance remains July 15, 2016

By James Langton |

Securities regulators are giving dealers to the end of this year to implement the Client Relationship Model (CRM2) requirements that were slated to take effect in July, but they will not provide an extension for the 2016 requirements to provide new cost and performance reports to clients.
 
In a letter to the Investment Industry Association of Canada (IIAC) issued Wednesday, Bill Rice, chairman of the Canadian Securities Administrators (CSA), indicates that the regulators have decided to give the industry to the end of 2015 to adopt the CRM2 requirements that are due to take effect on July 15. However, the regulators have decided to keep the implementation deadline for new reports on investment cost and portfolio performance, at July 15, 2016.

As a concession to the industry, the CSA says that firms that provide performance reports for calendar 2016 will not be required to include comparative data from 2015 in those reports. "They will be able to base their first investment performance reports on 2016 information alone," it says.

The CSA has also decided that the definition of "book cost" in the CRM2 rules will not change. "Registered firms that wish to provide tax-adjusted cost information to their clients can do so as supplementary information," it says.

In a letter to the CSA last year, the IIAC had sought an extension on the implementation of the CRM2 requirements that are slated for July 15, 2015 and 2016, to Dec. 31, 2015 and 2016, respectively.

"In our view, these decisions represent reasonable steps to address the concerns expressed in your letter without compromising the objectives of the CRM2 amendments," Rice concludes; adding that CSA staff will work with staff of the self-regulatory organizations on amendments to adopt these decisions.