Canadian securities regulators are planning to propose reforms next month that may fundamentally alter the retail investment business by seeking to improve outcomes for retail investors, and better aligning the interests of the investment industry with its clients.
A staff notice published on Thursday indicates the Canadian Securities Administrators (CSA) will be publishing a consultation paper at the end of April that will propose “regulatory action aimed at strengthening the obligations that advisors, dealers and representatives owe to their clients.”
It’s not clear from the notice whether the CSA intends to propose banning embedded commissions, the introduction of a “best interests” duty, or other measures.
See: OSC to propose introduction of “best interest” standard
“Regulatory action is required to better align the interests of registrants to the interests of their clients, to improve outcomes for clients, and to clarify the nature of the client-registrant relationship for clients,” the staff notice says.
This latest consultation follows from the CSA’s ongoing work to examine conflicts in fund industry fee structures, and conduct standards for dealers and advisors.
“The consultation paper is the next step in the CSA’s work toward improving the relationship between clients and registrants,” the notice says,
It adds: “It is in this context that the CSA will be launching an important consultation on specific proposals to enhance the obligations of registrants towards their clients … “
When the regulator’s proposals are actually released, the paper will be out for a 120-day comment period, the CSA notes.
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