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May 2017
FAIR Focus
FAIR Canada's Monthly Review
Are things getting better for ordinary Canadians when it comes to investor protection? We are at a real critical juncture on the issue of statutory best interest and eliminating embedded commissions in investment funds. What path will be taken? Real leadership is being shown by the Ontario Securities Commission and the New Brunswick Financial and Consumer Services Commission on the issue of a best interest standard. 

Integral to achieving a best interest standard, is eliminating conflicted compensation including embedded commissions. We hope that regulator and government decisions are a result of the overwhelming independent empirical data and reports as well as the positive outcomes in other international jurisdictions. Don't get fooled by clever misinformation and flawed studies presented by those who have a self-interest in the status quo. 

We also do not want to see these initiatives lost if and when a new regulator (CCMR) comes into being.  We call on the governments that are part of the new regulator to reform its structure so investors are represented and investor focused policy initiatives are not lost. CARP, SIPA, PIAC, and Kenmar Associates share our concerns and support changes to the new regulator.

The Team at FAIR Canada 
Podcast with Stephen Jarislowsky
MOSTLY MONEY with Preet Banerjee

Stephen Jarislowsky shares wisdom gleaned from more than 70 years of investing. He is a true investment legend, and still holds some stocks he originally purchased in the late 1940s when we was completing his MBA at Harvard. He launched Jarislowsky Fraser, Ltd. in 1955 and has grown it to more than $40 billion in assets under management, and is personally worth more than a billion dollars. He's led an unbelievable life with unbelievable stories, including being a counter-intelligence agent for the US Army in Japan after the second World War, and having been bestowed 11 honourary doctorates. And that's just scratching the surface. Preet Banerjee spoke with Stephen Jarislowsky at his offices in Montreal. Note both Preet and Stephen are on FAIR Canada's Board of Directors.
Majority of CSA Provinces and Territories Abandon Consumer Best Interest Standard
FAIR Canada Lauds Efforts of Consumer Focused OSC and FCNB (Ontario and New Brunswick Regulators)

FAIR Canada is disappointed to learn from the Canadian Securities Administrators that only Ontario and New Brunswick will continue working on articulating a regulatory best interest standard. A best interest standard would greatly improve the dealer/advisor-client relationship. Firms and advisors would be required to provide professional objective advice in the best interests of their client.

While the Nova Scotia Securities Commission and the Financial and Consumer Affairs Authority (Saskatchewan) have indicated that they are open to further considering a regulatory best interest standard "provided substantial revisions are made to add clarity and predictability", we do not understand the decision by the other jurisdictions that Canadians should not have the financial services industry act in their best interests.

Instead, these jurisdictions are willing to accept existing business models that harm consumers, rather than implementing meaningful reforms that will serve the interests of Canadians.

The proposed targeted reforms will not properly address the problems associated with conflicts of interest and conflicted compensation structures.

Read more here.
FAIR Canada and CARP Call for Major Changes to Proposed New Regulator
FAIR Canada Issues White Paper Entitled "What About the Investors"
FAIR Canada and CARP announced that they believe the proposed cooperative capital markets regulator (CCMR) is not in the interests of ordinary Canadians.
FAIR Canada and CARP are of the view that such a major change to the current system of securities regulation must represent an improvement for Canadians. The CCMR does not accomplish this due to its governance structure and substantive law.
Ermanno Pascutto, Chair of FAIR Canada states that "the onus is on those proposing to repeal the existing regulatory system to demonstrate the benefits of the proposed CCMR to Canadians. To date, we remain unconvinced that the change will benefit Canadians."
According to Wanda Morris of CARP: " For capital markets to function effectively, investors need complete transparency, competitive fees and confidence that their interests will be protected. These elements are not in place now and the proposals put forward for the new regulator do not address these concerns . CARP urges provincial regulators to go back to the table. "

OSC Leading Investor Protection
The Ontario Securities Commission (OSC) is the leading securities regulator on investor protection issues in Canada and under the CCMR, it would be eliminated and replaced by a new regulatory authority. This is set to occur on June 30, 2018.
Most recently, the OSC and New Brunswick's Financial and Consumer Services Commission have been alone in their public support to adopt a regulatory best interest standard to protect ordinary Canadians while the British Columbia Securities Commission (amongst others) have announced they do not support that financial services firms and their representatives should be required to act in the best interest of their clients.
FAIR Canada and CARP believe the reforms led by the CSA and OSC (and supported by the Ontario government) are critical to Canadians being able to adequately accumulate savings and critical to their being able to receive professional, objective advice that is consistent with safeguarding and advancing their interests.

Read more here.
Media FAIR in the Media
CKNW AM 980 Vancouver The Jon McComb Show - Your Best Interest Not As Important as Profit
Marian Passmore, Director of Policy and COO at FAIR Canada, spoke with the Jon McComb show of CKNW AM 980 Vancouver about the announcement that the majority of CSA provinces and territories have abandoned a regulatory best interest standard for advisors and their firms.

Investment Executive - Tightening the disciplinary screws 
James Langton of Investment Executive writes about developments that may lead to SRO's being able to use court orders to enforce sanctions imposed in the SRO's disciplinary proceedings. FAIR Canada recommends that reforms should go further so that firms are responsible for the fines imposed on their representatives. 

CBC News - Business | 'A very disheartening day': Most of Canada's regulators abandon plan to put your financial interests first 
Erica Johnson of the CBC reports on investor advocates and investor focused organizations being disheartened by the CSA announcement that a majority of provinces and territories will no longer be pursuing a regulatory best interest standard. The article includes quotes from FAIR Canada Chair Ermanno Pascutto, expressing disappointment with the regulatory response of most securities regulators in Canada. 

CBC News - The National | Banks prioritizing sales quotas over customers 
CBC's Go Public sheds light on the National regarding there being no obligation for financial advisors at the big banks to act in their customer's best interest.  FAIR Canada Chair Ermanno Pascutto speaks to the CBC about the need for a statutory best interest standard for advisors and their firms.

CBC News - Go Public | 'Canada is in the Dark Ages': Investment insiders reveal how lax laws put your financial interests last 
Erica Johnson for CBC's Go Public reports on the lack of standard for financial advisors at the big banks to act in their customer's best interest. FAIR Canada Chair Ermanno Pascutto reacts by saying "If the fees paid every year for those mutual funds dropped from a 2.5 per cent fee to a 1.5 per cent fee, Canadians would save about $10 billion a year...Instead, that money goes into the pockets of the financial industry."
Events Events/Upcoming Consultation

Your input is valued. Please consider providing written comments by June 19, 2017
Trending Trending
Transfer of Oversight of Syndicated Mortgages to OSC

Alberta Shareholders "Struggling to be Heard"

Why Active Can't Beat Indexing - It's NOT (Just) the Fees
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