(October 12 – 18:10 ET) –
The Independent Life Insurance
Brokers of Canada is proposing an
alternative regulatory approach
for financial services
representatives.
The proposal is part of the
association’s response to the
recent regulatory framework
proposed by the Canadian
Securities Administrators
Distribution Structures Committee.
The ILIBC proposal would put the
reps, rather than the firms, at
the centre of the regulatory
structure.
ILIBC president David Barber
outlines the proposal in a letter
to Doug Hyndman, chair of the BC
Securities Commission and the
Canadian Securities Administrators,
dated September 27. Barber
proposes that “… the independent
sales person be personally
licensed to a standard sufficient
for him to be his own compliance
officer.”
He suggests that such a policy
would be similar to Registered
Insurance Brokers of Ontario
licensing, which pertains to the
property and casualty insurance
brokerage industry. ILIBC says
that reps would retain their
books of business and would
negotiate contracts for back
office services with firms. The
ILIBC would appoint RIBO to
expand its regulatory coverage
to mutual fund reps.
In essence, the ILIBC wants the
CSA to reverse its focus on
dealer-centered compliance,
which has been the model in the
securities business for years.
It sees a closer parallel between
the insurance business and the
mutual fund business, than
between the fund industry and the
traditional securities business.
It sees the current regulatory
proposals as methods for fund
dealers to “hijack our insurance
sales too.”
“We would not be surprised to
see a few arrogant dealers propose
to confiscate our businesses and
independence. To see this come
from government is disappointing,”
Barber says in the letter.
-IE Staff
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