(April 10 – 10:45 ET) – The Canadian Securities Administrators (CSA) has finally announced relief from suitability obligations for dealers who provide only trade execution services for their clients.

This gives discount brokers, particularly online dealers, freedom to process orders faster and more efficiently. Dealers will have to apply for this relief; it isn’t automatic.

The CSA is imposing several conditions, including:
-the dealer must not offer advice and must be a separate legal entity or unit;
-the unit must maintain separate letterhead, accounts, registered reps, registered investment reps, registered trading officers and account documentation;
-the dealer must not compensate individuals on the basis of transactional values; and,
-the client must provide written consent that no advice or recommendation will be given by the dealer.

“Changes in technology have provided retail investors with a wealth of real-time information and the means to trade electronically this relief from suitability obligations recognizes the changing needs of investors and the dealer community,” Doug Hyndman, chair of the CSA, says in a press webcast.
-IE Staff