Policy Submissions        Editorials        FAIR in the Media        Events        Trending        About Us
June 2018
FAIR Focus
June : Seniors Month
June is Seniors Month in many parts of Canada. 

FAIR Canada continues to advocate and work on behalf of seniors and other investors so they can rightfully expect firms and their advisors to provide advice in their best interest free from harmful conflicts of interest; can obtain a recommendation from OBSI that is binding on the firm if the investor accepts the recommendation; can be better protected from elder abuse, financial exploitation, undue influence or diminished mental capacity by firms and their advisors through adoption and implementation of our six practical recommendations made in our joint Vulnerable Investor Report with the Canadian Centre for Elder Law, and are well served by regulators' enforcement programs as reflected in our comments on IIROC's proposed enforcement tools.
We will continue to work on behalf of Canadian investors.

The Team at FAIR Canada
FAIR Canada Provides Comments on the Updated OBSI Terms of Reference
FAIR Canada provides  comments o n the updated OBSI Terms of Reference which have been revised with the goal of making them easier to use and current.
FAIR Canada Comments on OSC Statement of Priorities
FAIR Canada has commented on the Ontario Securities Commission's Statement of Priorities for Financial Year to End March 31, 2019 ("2019 Draft Priorities"). FAIR Canada is pleased to see that investor protection is emphasized throughout the 2019 Draft Priorities. However, FAIR Canada believes that these initiatives simply take far too long. The OSC (and other CSA members) need to ensure that outcomes derived from initiatives related to its key mandate to protect investors proceed at a much quicker pace.
FAIR Canada highlighted some of the key investor related issues it believes are important for the OSC to keep at the forefront of its priorities for the coming year. These include:
  • Best Interest Standard and Conflicted Compensation Structures: FAIR Canada is pleased the OSC will be publishing regulatory provisions to create a best interest standard along with embedding a new client/advisor standard in the core targeted regulatory reforms under National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. We hope it is a meaningful standard that is clear to investors and registrants. On embedded commissions, FAIR Canada believes it is now time for a regulatory decision. We also believe that other conflicted compensation structures require sufficient attention from the OSC - poor recommendations and bad advice are not the result of a few bad apples in the system but from compensation structures and firm-wide practices that place firms' and representatives' interests ahead of the interests of Canadians. We are disappointed that title and proficiency reforms are not yet well underway.
  • Seniors Strategy: FAIR Canada is pleased that the OSC has published a Seniors Strategy. FAIR Canada and the Canadian Centre for Elder Law released a joint report in November 2017 entitled "Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence and Diminished Mental Capacity" (through funding from The Law Foundation of Ontario Access to Justice Fund), which contained six main recommendations that have received strong support from many stakeholders. FAIR Canada would be pleased to contribute to efforts to create a regulatory framework and supports the OSC Seniors Strategy's inclusive approach to better protect, empower and support older Canadians who may be vulnerable.
  • Ombudsman for Banking Services and Investments:FAIR Canada is encouraged that the OSC will give prominent focus to securing the ability of OBSI to make decisions that are binding on its members. We urge the OSC to issue a specific proposal for OBSI to have binding decision-making within the 2018-2019 fiscal year. In addition, we urge the OSC to ensure that firms are adhering to CSA Staff Notice 31-351, IIROC Notice 17-0229, MFDA Bulletin #0736-M "Complying with requirements regarding the Ombudsman for Banking Services and Investments". Going forward, FAIR Canada hopes the OSC will: take immediate action against registered firms that have repeatedly ignored their complaint handling obligations; require registered firms to cease using the term "ombudsman" as part of their internal complaint handling process; and require registered firms to provide a prominent link to OBSI's complaint handling process on their websites.
FAIR Canada's comment letter also includes comments on other policy areas including enforcement, fintech, cryptocurrencies and Point-of-Sale and other Disclosure documents. To read the full submission, please click  here.
FAIR Canada Comments on IIROC Consultation to Expand Enforcement Options
FAIR Canada provided comments in response to IIROC's consultation to expand its portfolio of Enforcement Options to include a Minor Contravention Program ("MCP") and the use of Early Resolution Offers ("EROs") as set out in IIROC Notice 18-0045 dated February 22, 2018. FAIR Canada supports IIROC in reviewing the effectiveness of its enforcement program in order to better fulfil its mandate of protecting investors and supporting healthy capital markets across Canada.

FAIR Canada believes it is difficult to meaningfully review and assess the effectiveness of enforcement and the current proposal to add an MCP and EROs in the absence of core data. FAIR Canada recommends that key information or data be provided annually in the Enforcement Report and that the information be consistently reported each year. We recommend that IIROC provide a discussion of enforcement toolkit options it considered in a future IIROC Notice on this issue.

Furthermore, the IIROC Notice indicates that Staff reviewed its practices and comparable programs and approaches adopted by securities and other regulatory bodies. However, the Notice only provides a comparison of minor violation programs in other jurisdictions (not other jurisdiction's early resolution programs), chooses only selected jurisdictions (rather than providing robust information on all major jurisdictions and whether they have an MCP or not), and does not provide any commentary on their effectiveness. There is also no explanation as to why certain jurisdictions were chosen while others were not and why Staff chose to include several regulators that oversee exchanges rather than regulators that oversee investment dealers and their representatives.

FAIR Canada articulated that it would also be helpful to assess the efficiencies to be gained by the proposed MCP and EROs by providing information regarding the length of time on average for IIROC to process cases to the different stages of the enforcement process, how efficiencies would be gained and how fairness/proportionality would be enhanced. Moreover, fairness and proportionality must be assessed not simply vis a vis the firm or individual who is sanctioned but also vis a vis the investors or the integrity and fairness of our markets as a result of losses incurred or other harms that result from the misbehaviour and malfeasance.
To read the full submission, please click  here.
Media FAIR in the Media
Advisor.ca -  OSC's 'Slow' Pace on Priorities Irks Investor Groups

Investment Executive - Disciplinary proposals panned : IIROC's plans have been criticized by industry and investors advocates

Trending Trending
According to this article, more than $1.1 Billion U.S stolen in crypto-currency thefts since December 2017 
About Want to know more about FAIR Canada?
Who is FAIR Canada and what does FAIR Canada do? Find out more about us here.
FAIR Canada | 647-256-6690 | info@faircanada.ca | http://www.faircanada.ca
36 King Street East
Suite 400
Toronto, ON  M5C 3B2