IIAC praises certain regulators for rejecting best interest standard

The Investment Industry Association of Canada (IIAC) is lauding the provincial securities commissions in Alberta, Quebec and Manitoba for declaring that they have decided to align with the B.C. Securities Commission (BCSC) and not introduce a regulatory obligation for advisors to prioritize their clients’ best interests.

The Canadian Securities Administrators (CSA) published a notice on Thursday indicating that regulators are fundamentally split on the issue of introducing a regulatory best interest standard.

The notice indicates that regulators in Ontario and New Brunswick will continue developing a best interest standard for advisors whereas the Alberta Securities Commission (ASC), the Autorité des marchés financiers (AMF) and the Manitoba Securities Commission (MSC) will not be pursuing it.

Meanwhile, Saskatchewan and Nova Scotia indicated that they will focus on other reforms for now, but haven’t definitively ruled out a best interest requirement.

Read: CSA report: divisions remain over “best interest”

The IIAC says in a statement that it commends those regulators “for recognizing that revised targeted reforms will advance the best interest of investors without the introduction of a vague and uncertain regulatory best interest standard. Canada’s investment industry has long held this position.”

In addition, the IIAC hopes the rest of the regulators can be swayed to the industry’s position on the issue.

“The IIAC calls on the ASC, AMF, BCSC and MSC to encourage Canada’s other provincial regulators to adopt a similar stance to achieve a harmonized regulatory framework across Canada, which would be in the interests of investors and our capital markets,” says Ian Russell, president and CEO of IIAC, in a statement.

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