Of particular interest are the OSC's findings in respect of
its compliance review process. Specifically, during fiscal 2013,
compliance reviews resulted in 38% of registered firms
reviewed requiring enhanced compliance (as compared to 34% in
2012), while 52% of registered firms reviewed requiring
"significantly enhanced compliance" (as compared to 47%
Deficiencies identified during the review process in
respect of all registrants included: (i)
non-compliance with KYC, KYP, suitability and accredited investor
requirements; (ii) inadequate compliance systems and ultimate
designated persons and chief compliance officers not meeting their
responsibilities; (iii) inadequate or lack of annual
compliance reports; (iv) failures to provide notice of
ownership changes or asset acquisitions; (v) inaccurate
calculations of excess working capital; (vi) insufficient working
capital and failure to report capital
deficiency; (vii) financial statements not prepared in
accordance with NI 52-107; (viii) inadequate
relationship disclosure information; and (ix) incorrect calculation
of capital market participation fees.
Specific deficiencies identified in respect of EMDs
included (i) conflicts of interest when selling
securities of related or connected
issuers; (ii) inadequate disclosure of conflicts of
interest; and (iii) inadequate risk disclosure information.
With respect to portfolio managers, reviews found
(i) inadequate personal trading policies; (ii) inadequate
investment management agreements; and (iii) inadequate
supervision of advising representatives and research analysts. The
OSC also conducted a "sweep review" of
newly-registered PMs in Ontario, which identified deficiencies in
respect of, among other things, misleading marketing practices
and inadequate relationship information to clients.
In respect of investment fund managers, deficiencies included
(i) inappropriate expenses charged to funds;
(ii) inadequate disclosure in offering memoranda;
(iii) inadequate oversight of outsourced functions and service
providers; and (iv) non-delivery of net asset value
The report ultimately provides suggested practices to assist
firms in addressing the deficiencies identified. The
OSC recommends that registrants use the report as a
self-assessment tool to strengthen their compliance with applicable
regulations and make changes as necessary. For more information,
see OSC Staff Notice 33-742.
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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