IFIC calls for consistent regulatory objectives in Client Relationship Model
Urges IDA to adopt a flexible approach to performance reporting requirements
Friday, May 23, 2008
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Regulators, securities commissions and the mutual fund industry should work together to ensure that proposed regulations for a Client Relationship Model (CRM) have consistent objectives and provide for an investor experience that is common across products and providers, The Investment Funds Institute of Canada (IFIC) said Thursday.
In making its CRM submission to the Investment Dealers Association of Canada (IDA), IFIC noted that a major priority for the mutual fund industry is to have harmonized and consistent regulatory policies for the benefit of investors.
IFIC advised that there are a number of other regulatory initiatives currently underway that relate to the CRM framework, including a paper on CRM expected later this year from the Mutual Fund Dealers Association, a national instrument from the Canadian Securities Administrators and proposals by the Joint Forum of Financial Market Regulators for disclosures at point of sale.
The core principles of the CRM proposal deal with clarity and transparency of the account relationship entered into between the client, the advisor and the dealer, including transparency of client costs, advisor conflicts and account performance and risks.
“Many mutual fund companies have already developed meaningful, high quality information in these areas,” said Joanne De Laurentiis, president & CEO of IFIC. “It is essential that the prescriptive nature of some of the proposed requirements not impede this progress.”
IFIC urged the IDA to adopt a flexible approach to performance reporting requirements in order to foster effective solutions uniquely suitable to various client situations. IFIC also made recommendations on proposed requirements for suitability reviews and relationship disclosure.
The link to the submission can be found on the media section of the IFIC website at www.ific.ca.
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