A proposed duty, or "best
interests" standard, would be intended to address
the CSA's five primary investor protection concerns related to
the conduct of advisers and dealers, namely that (i) there may
be an inadequate principled foundation for the standard of conduct
owed to clients; (ii) the current standard of conduct may not
fully account for the difference in information and financial
literacy between retail clients and advisers/dealers;
(iii) there is an expectation gap between investors and
advisers/dealers as investors incorrectly assume that advisers and
dealers must always provide advice in the client's best
interest; (iv) while advisers and dealers must recommend suitable
investments, the investments need not necessarily be in the
client's best interest; and (v) the application in
practice of current conflicts of interest rules may be less
effective than intended. According to the CSA, acting in the
client's best interests means the dealer or adviser must ensure
that client interests are paramount, services are performed
reasonably prudently and clients are provided with full disclosure
and not exploited.
In considering adoption of a statutory fiduciary duty, the
international developments toward enacting similar standards.
Our own Ed Waitzer considered such international developments in
a post published last year. For consultation purposes, the
CSA provided the following potential articulation of a best
Every adviser and dealer (and each of their representatives)
that provides advice to a retail client with respect to investing
in, buying or selling securities or derivatives shall, when
providing such advice,
1. act in the best interests of the retail client, and
2. exercise the degree of care, diligence and skill that a
reasonably prudent person or company would exercise in the
The CSA also stated that while other articulations may
exist in certain jurisdictions, the CSA is specifically
exploring the harmonization of the appropriate standard across the
country. The consultation paper, which asks a number of specific
questions regarding the potential standard, its application and
its potential impact, is open for an extended 120-day
comment period. Comments are thus being accepted until February 22,
2013. For more information, see CSA
Consultation Paper 33-403.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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