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The Canadian Securities Administrators (CSA) are consulting on proposed amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Requirements that would prohibit the use of chargebacks in the distribution of investment fund securities offered by prospectus. Chargebacks occur when a dealing representative receives an upfront commission when a client purchases securities and then has to pay back all or part of this commission if the client redeems their securities before a fixed schedule. The CSA believes chargebacks pose a conflict of interest. Specific questions are asked in the consultation, such as whether securities of investment funds that are non-reporting issuers or other types of securities should also be subject to the proposed ban. The comment period for the consultation ended on September 24, 2025.
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