The CSA yesterday released a status report on their
mutual fund fee consultation initiative. As we discussed last year, the CSA released a
discussion paper in December 2012 identifying investor protection
and fairness issues resulting from the Canadian mutual fund fee
structure and soliciting feedback on the current structure.
Today's report identifies a number of key themes emanating
from the consultation process from the point of view of industry
and investors. According to industry stakeholders (i) there is no
evidence of investor harm warranting a change of the current fee
structure; (ii) a ban on embedded compensation would have
unintended consequences, including with respect to reduced access
to advice for small retail investors and the creation of an unlevel
playing field among competing products; and (iii) the impact of
domestic and international reforms should be assessed prior to
moving ahead with further proposals.
From the point of view of investors, (i) embedded adviser
compensation should be banned as it causes a misalignment of
interests that impacts investor outcomes; (ii) investors should
have, at a minimum, the true choice to not pay embedded
commissions; (iii) a best interest duty for advisers should be
implemented; and (iv) adviser proficiency requirements should be
increased and the use of titles regulated.
The CSA also referred to the status report on the best interest duty, as a
number of key messages were found to be similar to those emerging
from that consultation process. According to the CSA, the
similarity between the two initiatives suggests a need to
coordinate policy assessments going forward, and the CSA expect to
communicate any potential regulatory actions in the coming
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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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