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At first blush, the Canadian Securities Administrators’ decision to stand pat on embedded commissions, adopt best interest principles throughout the rules and eliminate deferred sales charges (DSCs) may appear to be a compromise that pleases no one.

Investor advocates are sure to be disappointed that they failed in their attempt to have embedded commissions banned while the investment industry will have to beef up its compliance efforts yet again to meet the new requirements for dealers and financial advisors to address any potential conflicts in clients’ best interest or avoid them altogether.

The CSA, for its part, is trying to address investor protection concerns while limiting unintended consequences — banning DSCs and trailers to discount brokerages, but not banning embedded commissions across the board. At the same time, the CSA is proposing reforms that would beef up suitability and conflict of interest requirements while not introducing a statutory best interest standard in Ontario and New Brunswick, which were the only two provinces considering the measure.

Overall, though, Thursday’s announcement is a win for the investment industry as there is no blanket ban on trailer commissions and no best interest standard. However, the changes to suitability and conflict of interest rules could have a real impact on advisors’ day-to-day business. Keep in mind, though, that these are just proposals, subject to further consultation. Thus, they could be watered down or never adopted at all.

Meanwhile, the CSA’s decision to ban DSCs simply makes official an accepted industry practice from the past couple of years, and the decision to ban trailer commissions for discount brokers may impact class-action lawsuits such as the one filed against TD Asset Management Inc. earlier this year.

Still, the big question is whether the reforms to adopt best interest principles in the suitability and conflict of interest rules go ahead. That will ultimately determine how these policy decisions will be viewed in the long run.