Publication Of Client Focused Reforms And Policy Decision On Embedded Commissions

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Publication Of Client Focused Reforms And Policy Decision On Embedded Commissions

The Canadian Securities Administrators (CSA) published on June 21, 2018 two notices concerning investor protection initiatives. 

The first notice requests public comment on detailed reforms (Client Focused Reforms) to obligations of registered firms and individuals (registrants) that would require registrants to:

• address conflicts of interest in the best interest of the client;
• put the client’s interests first when making a suitability determination; and
• provide clients with greater clarity on what they should expect from their registrants.

These Client Focused Reforms demonstrate a shared commitment by the CSA, as well as the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada, to changes that would require registered firms and individuals to promote the best interests of clients and put clients’ interests first. 

The comment period will run for 120 days.  

In the second notice, CSA Staff Notice 81-330 Status Report on Consultation on Embedded Commissions and Next Steps, the CSA announced its policy decision on mutual fund embedded commissions.