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INVESTOR RIGHTS MONITOR
Insights You Can Use, Advocacy You Can Trust.
June 2026
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When Innovation Stops Serving Investors
Innovation has always been part of how capital markets evolve, and at its best, it produces genuine improvements for investors and the broader economy.
The word “innovation”, however, is doing a lot of work lately. It is now routinely used by product manufacturers and distributors to justify pushing new and often complex products into the hands of retail investors, regardless of whether those products serve investor needs or contribute to healthy capital formation.
The issue is not innovation itself, but the assumption that anything bearing the label deserves regulatory approval. Regulators should not simply champion innovation; they should support it responsibly, which means requiring that new products deliver meaningful benefits, avoid unjustified risks to investors, and withstand a thorough, objective and transparent public-interest assessment.
JP Bureaud, CEO, FAIR Canada
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Complaint Handling: Canada Needs a 60-Day Standard
When an investor raises a complaint with their dealer, timing matters. Delays compound harm. Evidence can fade, financial pressure may build, and the imbalance between the firm and the individual can grow. Regulators in other jurisdictions have recognized that delays are harmful and adopted shorter complaint-handling timelines, treating prompt resolution as an expectation rather than a courtesy.
Canada has lagged. Although Québec implemented a 60-day complaint-handling timeline last year, investors in the rest of the country can wait 90 days or longer for a resolution. CIRO has consulted extensively on this issue, and the evidence is clear: longer timelines can increase stress, discourage investors from pursuing complaints, and erode confidence in financial institutions. The result is a complaint process that often works against the people it is meant to protect.
FAIR Canada’s position is clear. We need a single, national 60-day standard. Firms should have no more than 60 days to investigate and respond to a complaint, with limited, clearly defined grounds for an extension in exceptional circumstances. This standard is achievable, as Québec’s experience shows, and is still longer than in other comparable jurisdictions that require responses within 30 to 45 days. We will continue to press regulators across the country to harmonize complaint-handling rules around this benchmark. The 60-day standard is within reach and is overdue.
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Tokenization: Emerging Regulatory Priority
Tokenization is attracting growing regulatory attention. It may change how securities are issued, traded, and held, but for retail investors, the key question is whether it improves outcomes or simply adds new risks.
What Is Tokenization?
Tokenization is the digital representation of an asset on a blockchain. The token is not the asset itself, but a way to record and transfer rights. It is also different from cryptocurrencies, which are standalone digital assets.
Supporters point to faster settlement, lower costs, and broader access. But those promises will matter only if they lead to better investor outcomes.
New Innovations, New Risks
Like other market innovations, tokenization may create benefits but also raises investor protection concerns, including:
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Regulatory uncertainty: Existing securities rules were not designed for tokenized assets, which can result in gaps and uncertainty about how regulations apply.
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Legal ownership: A token may not give investors direct ownership of the underlying asset and investors may not understand the rights they are buying.
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Custody concerns: Tokenized assets may rely on digital wallets and private keys rather than traditional custodians. If access is lost or stolen, the investment is gone.
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Liquidity misconception: Fractional ownership does not guarantee liquidity. Investors may assume a market exists when it may not.
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Investor understanding and disclosure: Without clear, plain-language disclosure, investors may not understand how a tokenized asset differs from the underlying asset or what risks it carries.
What This Means for Investors
Tokenization is still early in Canada, but regulatory interest is growing, including through the CSA’s Project Tokenization initiative. Securities regulators should judge tokenization proposals not by their novelty, but by whether they deliver better outcomes and stronger protections for investors.
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New CIRO Research Provides Important Insights for DIY Investors and Investing Platforms
CIRO’s Office of the Investor and the Behavioural Insights Team published important new research on decision-making supports (sometimes referred to as “speed bumps”) for DIY investors. The study looked at which tools help lower-risk DIY investors avoid opening higher-risk accounts or trading in higher-risk products.
Why It Matters
CIRO recently issued guidance that broadens the types of decision-making supports DIY investing platforms can offer, including educational resources, notifications, alerts, and self-help tools. Because DIY investing platforms provide easy access to higher-risk products (such as cryptocurrency, margin accounts, options and prediction markets), it is important that they offer tools that encourage DIY investors to pause, reflect, or learn before making investment decisions.
What The Research Found
The research found that two types of “speed bumps” were particularly effective in reducing high-risk account openings. Investors responded best to practical risk warnings that used real-world examples and explained risk in dollars and cents, rather than abstract concepts. Interactive quizzes were also effective, as they required investors to engage with the risks. Together, these approaches reduced high-risk account openings by 16% and high-risk investing activity by 10-11%.
The research also identified risk disclosure approaches that do not work. Traditional checkbox confirmations - where users tick a box to confirm “I agree” or “I understand these risks”- were largely ineffective. Even when written in plain language, participants treated these as administrative steps, similar to accepting terms and conditions, rather than as an opportunity to reflect. This finding has broader implications for how risk disclosures are designed and used.
FAIR Canada’s Take
FAIR Canada commends CIRO for this research. We will continue to advocate for stronger investor protections in the DIY investing channel and encourage platforms to use this evidence to put in place effective decision-making supports. These tools and “speed bumps” are essential to help investors better understand risk before trading. We also encourage regulators to consider how these findings could improve risk disclosure or be applied to other regulatory disclosures.
Find the full research report here.
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A New Path to Investor Redress: Ontario’s Disgorgement Framework
On September 1, 2025, a new framework came into force in Ontario governing how funds collected under disgorgement orders are handled. Disgorgement requires wrongdoers to give up money obtained through misconduct. Historically, however, there was no requirement to return those funds to harmed investors. That has changed. Under the new framework, disgorged amounts collected by the OSC will generally be distributed to investors who suffered direct financial losses because of the misconduct.
To support this process, the OSC will publish key information on its website, including the amounts ordered and collected, any outstanding balance, and whether a distribution has begun. Investors can provide their contact information if they wish to be notified about future distributions.
The OSC v. Bharti case is the first under the new framework where disgorged funds have been received. The OSC is considering potential approaches to distributing those funds and will provide updates as decisions are made.
The Bharti case offers an important first look at how the framework will work in practice. In this instance, the OSC has successfully collected the full amount of the disgorgement orders, which is uncommon. Historically, collection rates on OSC disgorgement orders have been low. Although the framework has the potential to improve investor confidence by providing another path to financial redress, that promise depends on the OSC’s ability to consistently collect funds from wrongdoers. Strengthening the OSC’s statutory collection powers is critical to ensuring that disgorgement orders deliver meaningful compensation to investors and help reinforce trust in Ontario’s capital markets.
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Naming a Trusted Contact Person: A Simple Step That Matters
Since December 31, 2021, Canadian investment firms must ask clients to name a Trusted Contact Person (TCP) and may place temporary holds on transactions if they suspect their client may be subject to financial exploitation or diminished capacity. These measures are designed to protect investors during vulnerable situations – such as cognitive decline, family pressure, and suspected abuse. They are based on recommendations from FAIR Canada’s 2017 joint report on vulnerable investors.
The tools only work if investors use them. A TCP is someone you name in advance, usually a family member or close friend, whom your firm can contact if it has concerns about your account. The TCP does not have authority over your investments. They cannot make trades, access your account, or make investment decisions on your behalf. Instead, their role is simpler but important: they give your firm someone to contact if something seems wrong, helping to address issues before they get worse.
Naming a TCP only takes a few minutes. Most firms let you do this through your online account, by phone, or at your next account review. Choose someone you trust to act in your best interests, who is not involved in managing your finances, and can be reached if needed.
For more information, the B.C. Securities Commission’s InvestRight website maintains a helpful hub on elder financial abuse, and the OSC’s GetSmarterAboutMoney site has a clear explainer on Trusted Contact Persons and how the process works.
With World Elder Abuse Awareness Day on June 15, this is a practical step worth taking, and worth encouraging the people you care about to take as well.
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WHAT'S NEW AT FAIR
Globe Letter to the Editor: Prediction Markets and Innovation
FAIR Canada recently sent a letter to the editor of The Globe and Mail in response to an article that described prediction market contracts as innovative products comparable to ETFs. FAIR Canada pointed out that these products affect investors in fundamentally different ways. Questioning them is not a rejection of innovation; it is a call for responsible innovation. Innovation should be judged by whether it delivers real benefits to investors. If it mainly benefits industry while shifting costs or risks onto investors, it is not worth defending.
The letter can be found under the title “Bad Bet” on the Globe and Mail website under Letters to the Editor, May 17.
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