Following a compliance review focusing on mutual fund-sponsored sales conferences, the Ontario Securities Commission (OSC) issued new guidance that aims to avoid conflicts of interest in the selection of reps to attend these events.

The OSC published new guidance today on the process of selecting reps to attend conferences sponsored by fund firms. The guidance covers the details of the existing rules and regulatory policy in this area, noting that it’s the regulators’ position that fund managers, “should generally be dealing with” firms, rather than individual reps, in connection with mutual fund sponsored conferences.

“This permits participating dealers to maintain better supervisory control over their representatives and reduces the potential conflicts that may arise between the duties owed to clients by representatives and the benefits provided by investment fund managers to those representatives,” it says.

The guidance sets out the processes that fund managers should have to ensure that their conferences are open to all reps and that the selection of attendees is fair. “For example, attendance is filled on a first come, first served basis,” it says.

The new guidance follows a review that was carried out by the OSC’s Compliance and Registrant Regulation (CR&R) branch, which looked at compliance with the mutual fund sales practices rule in connection with conferences that are organized and presented by investment fund managers. The OSC indicates that its staff intends to continue to monitor compliance with these requirements.

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