Fund dealers will have to adopt the remaining reforms to enhance cost and account performance transparency, which represent the second phase of the Client Relationship Model (CRM2), over the next 18 months.
The Mutual Fund Dealers Association of Canada (MFDA) issued a bulletin Friday indicating that the Canadian Securities Administrators (CSA) have approved its version of the remaining CRM2 amendments, which are slated to be implemented on July 15, 2015 and 2016. These include new requirements for client statements, and the introduction of new annual reports regarding cost and compensation, and enhanced performance reporting.
Fund dealers approved the MFDA’s version of these new measures at their latest annual general meeting earlier this month, and now the CSA has given its blessing to the amendments, too, which means that all of the CRM2 reforms have been finalized for fund dealers.
That’s not yet the case for the investment dealers. Earlier this year, the Investment Industry Regulatory Organization of Canada (IIROC) republished its remaining CRM2 amendments for another comment period. Among the comments received, the Investment Industry Association of Canada (IIAC) is calling on the regulators to give dealers until the end of 2016 before the requirements for new annual cost and performance reports take effect (rather than in July 2016, as required by the CSA rules). Investor advocates have opposed that suggestion.
The regulators have yet to rule on the IIAC’s recommendation. But, with Friday’s announcement, the fund dealers will be joining the rest of the industry, which is directly regulated by the CSA (such as exempt market dealers), in adopting their CRM2 reforms on the original timetable established by the CSA.