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The Ontario Securities Commission (OSC) has approved a no-contest settlement agreement with IPC Securities Corp. and IPC Investment Corp., both based in Mississauga, Ont., in which the two dealers will pay slightly less than $11 million in compensation to resolve allegations that certain clients paid excess fees, the OSC announced on Thursday.

A hearing panel approved the settlement agreement, which will also see the IPC dealers make a voluntary payment of $460,000 to the OSC, along with $30,000 in costs, to resolve the regulator’s allegations.

In agreeing to the settlement, the dealers did not admit, or deny, the allegations against them.

According the settlement agreement, the overcharging took two forms. Certain clients held assets that carried embedded trailer fees inside fee-based accounts, meaning they effectively paid twice for the dealers’ service and advice. Some clients were also invested in versions of certain investment funds with higher management expense ratios (MERs), when they qualified for lower-cost versions of the same funds.

Almost $9 million of the client compensation covers the MER-related overcharging, while about $2 million covers the overcharging in fee-based accounts.

In approving the settlement, the hearing panel noted that the IPC dealers self-reported the overcharging back in 2015; they quickly took action to remedy the issue; they co-operated with the OSC’s investigation; and there is no evidence of intentional dishonest conduct by the dealers.

“This settlement should make it clear that registered firms must have in place robust and effective compliance systems, a principal purpose of which is to provide reasonable assurance that investors are protected and that they are treated fairly,” the hearing panel stated in its oral reasons.

“Registrants are expected to have appropriate controls and supervision in place to protect against excess fees,” said Jeff Kehoe, director of enforcement at the OSC, in a statement following the settlement hearing. “Regular reviews of a company’s internal compliance systems support the integrity of our financial markets and foster investor confidence.”

This settlement is the latest in a series of no-contest settlements with investment industry firms involving allegations of various forms of client overcharging.

To date, the OSC has approved eleven no-contest settlements, resulting in more than $368 million in compensation to investors.

IPC Securities and IPC Investment are subsidiaries of Mississauga, Ont.-based Investment Planning Counsel Inc.