On June 16, 2015, the minister of finance (Québec) (the "minister") published a report on the application of the Act respecting the distribution of financial products and services (the "Report"). This Act establishes the regulatory regime that applies to representatives selling insurance and investment products such as mutual funds in Québec.
The Report can be accessed on the website of the minister here.
In the interest of keeping the regulatory framework relevant and robust, the Report proposes several recommendations which are:
- Draw on the recommendations of the Canadian Council of Insurance Regulators to put in place a flexible legal framework that will enable insurers to offer their products online.1
- Establish a legislative framework for distribution without a representative that applies directly to insurers, which must ensure that the persons offering the insurance products to the public (now called distributors) abide by the rules.
- Examine all approaches to ease the regulatory and financial burden of registrants, while maintaining adequate oversight of the distribution of financial products and services.
- Make provision for a consumer to be compensated when he is the victim of a fraud perpetrated by a certified representative even if the claim concerns the sale of products that the representative was not authorized to offer.
- Call upon industry representatives in the decision-making process of the Fonds d'indemnisation des services financiers, a fund providing industry compensation to the public.
In respect of the third recommendation and the dual oversight which currently applies in Québec to the offering of insurance and mutual fund products, the minister poses a series of questions for which feedback is sought.
We look forward to further discussing the implications of this Report with industry participants and encourage them to send their comments to the minister prior to the deadline of Sept. 11, 2015.
At Gowlings we have assisted industry participants in applying the regulatory requirements of the Act respecting the distribution of financial products and services, and in their dealings with the Autorité des marchés financiers and the applicable self-regulatory organizations.
Footnote
1. In a previous article we wrote about the recommendations made by the AMF to insurers offering insurance products online in the context of the current regulatory regime.
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