(July 28 – 15:45 ET) – The Canadian Securities Administrators has finally revamped proposed rules dealing with the operations of securities dealers in bank branches.
The rules were first proposed in 1997 and the CSA has been reviewing comments for more than two years. It has substantially revised the rules after considering industry comments on harmony between jurisdictions and whether the regulations should apply to all registrants. There will now be a further 60-day comment period.
“The purpose of the proposed National Instrument is to ensure that clients dealing with registrants are fully informed about the products they are purchasing and the risks that they face,” the CSA said.
The requirements for identifiably separate premises have been dropped, as has the requirement for networking notices. Instead, disclosure will be used to clarify any issues with clients. The rule itself will lay out what is acceptable in a networking arrangement, including the use of margin, easy access to loans, tied selling, compensation, transfer of client information and client confusion.
Several provisions have been broadened to apply to all registrants who deal with retail clients, including those dealing with the settlement of accounts, client confidentiality and disclosure to customers over leverage.
The CSA said it will consider submissions received by Sept. 19.
-IE Staff