Investors lost US$50M in alleged Ponzi scheme: SEC
Sales of PARNs are down by about 50% since the feds proposed altering the tax treatment of linked notes
Only linked notes sold in 2017 and beyond will be subject to tax rules proposed in the 2016 federal budget
This year’s federal budget proposes to change the tax laws governing linked notes to treat a gain realized on the sale as interest earned on the debt obligation
Feds to end tax-planning opportunity associated with linked notes
KYC and suitability obligations apply to all sales of Principal Protected Notes by fund dealer reps
Reps with bank-owned dealers must sell PPNs through the investment dealer not the financial institution
Regulators take action to ensure PPN sales are subject to KYC, suitability rules
Reviews focus on new products and principal-protected notes
Proposed amendments will see PPNs sales go through MFDA dealers, triggering KYC obligations