The Canadian Securities
Administrators yesterday released a status report to update
stakeholders on the consultation process undertaken last year to
consider the feasibility of imposing a fiduciary duty on advisers
and dealers to act in the best interests of clients.
Ultimately, the report outlines four primary themes identified
through the consultation process, namely that (i) there is
significant disagreement in regards to whether current adviser and
dealer regulations adequately protect investors and what regulatory
response is required; (ii) there is broad agreement that a best
interest standard, if adopted, should be as clear as possible and
include sufficient guidance for advisers and dealers; (iii) the
potential negative impact of such a standard, including with
respect to, for example, increased costs, legal uncertainty and
negative impact on choice, access and affordability, must be
carefully assessed; and (iv) more work is needed before moving
forward with a statutory best interest standard or other regulatory
The CSA also noted that a number of key messages from
stakeholders are similar to those emerging from the current mutual fund fees consultation process, and
that a connection between the two initiatives suggests a need for
CSA staff to coordinate policy considerations on the two projects
going forward. The CSA intend to continue their consideration of
the information gathered through the consultation process and
anticipate communicating next steps in the coming months. For more
information, see CSA Staff Notice 33-316.
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