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November 2017
FAIR Focus
FAIR Canada's Monthly Review
Financial Literacy Month
 
Financial Literacy Month is drawing to a close. FAIR Canada began November by attending the Financial Consumer Agency of Canada's National Conference on Financial Literacy held in Montreal, where we heard from regulators, government, consumer advocacy groups, academics, entrepreneurs, and industry representatives. The conference helped shed light on the issues that are positively and negatively impacting Canadian financial literacy, and also included discussions on promising innovative tools that can assist Canadians to become more financially literate.
 
Financial literacy is of paramount importance. We also believe it is essential to have appropriate rules and requirements in place to ensure that all financial consumers receive adequate protections. This is especially true in light of the increasing complexity of financial products, conflicted compensation structures, and issues involving vulnerable investors, which we discuss in a report released this month with the Canadian Centre for Elder Law: Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence and Diminished Mental Capacity. FAIR Canada and CCEL launched the release of our report at the Ontario Securities Commission's Investor Advisory Panel and received much positive feedback. We will continue to work on your behalf.  
 
 
The Team at FAIR Canada 
 
FAIR Canada and the CCEL Issue Joint Report on Vulnerable Investors
FAIR Canada and the Canadian Centre for Elder Law released their Joint Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence and Diminished Mental Capacity. The report contains six recommendations to securities regulators designed to help the investment industry play a critical role in abuse prevention and addressing diminished mental capacity. We call on securities regulators, and the investment industry to really engage on these issues. Older Canadians, advocates and the investment industry have told us they all support having a conduct protocol in place which balances investors right to make their own choices, with the reality that investment firms are in a unique position to prevent or stop financial exploitation of vulnerable investors or respond to help those who show signs of diminished mental capacity. We know that regulators, governments, industry and investor and community organizations want to address this issue and we hope that this report begins a process which leads to concrete steps that will improve outcomes for those who are in vulnerable positions today or may become vulnerable tomorrow. 
Open Letter by FAIR Canada and PIAC Raises Concerns about Use of Internal Ombudsmen
FAIR Canada and the Public Interest Advocacy Centre (PIAC) have written a joint letter to the Ombudsman for Banking Services and Investments (OBSI) Joint Regulators Committee to raise concerns about the use of "internal ombudsmen" at dealer firms. To read more click here.
FAIR Canada Comments on IOSCO's Consultation Report - Public Comment on Regulatory Reporting and Public Transparency in the Secondary Corporate Bond Markets
FAIR Canada has provided comments supporting IOSCO's recommendations regarding regulatory reporting and public transparency in the secondary corporate bond markets. FAIR Canada supports the seven recommendations which involve the collection and centralization of data, pre-trade and post-trade reporting to regulators and pre-trade and post-trade transparency requirements. To read more click here.
FAIR Canada Comments on Department of Finance Review of Federal Financial Sector Framework
FAIR Canada has provided comments on the Department of Finance's Review of the federal financial sector framework. FAIR Canada is generally supportive of the Government's focus on building long-term, inclusive economic growth to support Canadians, and agrees that a well-functioning financial sector is key to delivering this commitment. However, throughout its submission, FAIR Canada reminded the Department of Finance that the protection of financial consumers needs to be addressed and cannot be assumed or taken for granted. To read more click here.
Media FAIR in the Media
Marian Passmore, FAIR Canada's Director of Policy and COO joins Peter Watts of The Alberta Morning News on News Talk 770 to discuss FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors. Marian Passmore's comments included a discussion on the purpose and findings of the report, and the expected response of regulators.

Laura Tamblyn Watts of the Canadian Centre for Elder Law joined Mike Ross and Joeita Gupta of Live from Studio 5 on AMI-Radio to discuss FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors. Laura Tamblyn Watts spoke generally about the report, including its findings, recommendations and feedback from stakeholders, including the Investment Funds Institute of Canada's support for the recommendations. 
 
Rudy Luukko of Morningstar provides details of FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors, including the report's six recommendations for regulatory reform. The article states that the co-author of the report, Marian Passmore, FAIR Canada's Director of Policy and COO,"told Morningstar that the report's findings and recommendations may also help individuals consider what type of arrangements they should put in place to help protect themselves, given their particular circumstances", such as the risks and benefits of granting powers of attorney for property. 
 
Lexology reports on the release of FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors, the Quick Facts about Elder Abuse, Financial Exploitation and Undue Influence, and the case studies of the most common scenarios used in the consultation process. Marian Passmore, FAIR Canada's Director of Policy and COO, and co-author of the report, is quoted as saying, "there is broad consensus amongst seniors, advocates and the investment industry that there needs to be protocols in place which balance an investors' right to make their own choices, with the reality that the investment firms are in a unique place to prevent or stop financial exploitation of vulnerable investors."
 
IFIC congratulated FAIR Canada and the Canadian Centre for Elder Law for their thoughtful recommendations contained in the Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence and Diminished Mental Capacity. 
 
James Langton of the Investment Executive writes about FAIR Canada and the Public Interest Advocacy Centre's joint letter to the CSA's OBSI Joint Regulators Committee to raise concerns about the use of "internal ombudsmen" at dealers, and the letter's recommendation that OBSI's Terms of Reference and IIROC and the MFDA's internal complaint handling rules be amended to conform with the 90 day rule in National Instrument 31-103. The article includes a quote from Lucy Becker, IIROC's Vice-president of Public Affairs and Member Education Services: "FAIR [Canada] and [the] PIAC have raised this with us and with our [Canadian Securities Administrators] colleagues on the Joint Regulators Committee, and we are looking into those concerns".

Gordon Hoekstra in the Vancouver Sun reports on the results of a Postmedia investigation which revealed that between fiscal 2007-2008 to 2016-17, the BC Securities Commission has collected less than two percent of the $510 million in fines and orders to pay back the proceeds of fraudulent activities. Marian Passmore, FAIR Canada's Director of Policy and COO states in the article, "It is sort of an unsexy part of the job to actually try and enforce an order and recover (fines). But it's clearly something that needs greater focus".
 
Investment Executive - Report calls on industry to combat elder financial abuse  
James Langton of the Investment Executive reports on FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors. The article quotes Marian Passmore, FAIR Canada's Director of Policy and COO, calling on "securities regulators, and the investment industry to really engage on these issues."
Advisor.ca writes about FAIR Canada and the Canadian Centre for Elder Law's joint report on vulnerable investors. The article quotes Marian Passmore, FAIR Canada's Director of Policy and COO as to how investment firms are in a unique position to help prevent or stop financial exploitation of vulnerable investors, or respond to help those who show signs of diminished mental capacity.
 
James Langton of the Investment Executive reports on the newly launched Investor Protection Clinic, an initiative of FAIR Canada and Osgoode Hall Law School, specifically its invitation to investors who believe their funds have been mishandled and who cannot afford a lawyer. The article includes a quote from Marian Passmore, FAIR Canada's Director of Policy and COO, who states that the clinic "will help Ontarians navigate a very complicated area involving securities, banking and insurance products and the firms who sell them."
 
Trending Trending
Regulators Continue to Consult on Issue of Embedded Commissions
James Langton of the Investment Executive discusses regulator consultations on the issue of banning embedded commissions. Langton makes the point that the regulators have not been clear about their direction, although the latest CSA paper indicates that regulators have considered and rejected a variety of alternatives to an outright ban. To read more click here.
 
Silent Majority of Investment Professionals in Favour of Banning Embedded Commissions?
Tom Bradley writes in the Financial Post that a silent majority of investment professionals are now in favour of banning embedded commissions. To read more click here.

Dan Hallett in The Globe & Mail comments on the OSC Roundtable on Banning Embedded Commissions
Dan Hallett, one of the panelists at the OSC Roundtable on Banning Embedded Commissions writes in the Globe and Mail about how many of the panelists arguments in favour of not banning embedded commissions focused on the interests of industry rather than the interests of clients.

Past Events
OSC Dialogue 2017 Embracing Chang
Ermanno Pascutto, Chair of FAIR Canada was a member of a panel which discussed "the evolving investor experience", moderated by John Mountain, Director of Investment Funds and Structured Products.  Ermanno's remarks focused on the lack of progress in addressing misaligned incentives that harm financial consumers, such as recommending borrowing to invest in mutual funds, and embedded commissions. 
About Want to know more about FAIR Canada?
Who is FAIR Canada and what does FAIR Canada do? Find out more about us here.
 
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