By Staff | July 17, 2009 | Last updated on July 17, 2009
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The Canadian Securities Administrators (CSA) National Instrument 31-103 Registration Requirements and Exemptions — more commonly referred to as registration reform — is poised to go into effect.

“We have moved to harmonize, streamline and modernize the registration requirements and procedures across Canada,” says Jean St-Gelais, chair of the CSA and president & chief executive officer of the Autorité des marchés financiers (Québec). “The new registration regime is more flexible and easier to use, enhances investor protection and benefits the industry by bringing increased efficiencies to the registration system.”

The new regime will have higher proficiency standards for some registrants, and enhanced rules for consumer disclosure, referral arrangements, handling of investor complaints, and disclosing and addressing conflicts of interest. It also introduces a registration requirement for investment fund managers, exempt market dealers and senior officers responsible for compliance.

The CSA estimates there are some 2,000 firms and 130,000 individuals registered to deal or advise in securities. The new rules will attempt to accommodate a wide variety of business models, scales of operation, clients and products.

National Instrument 31-103 comes into force on September 28, 2009. has published extensively on registration reform. Following are selected articles designed to inform advisors about what to expect.

Reality Check

Registration reform: What it means for you?

From LMD to EMD under NI 31-103

Passport introduction

On the same date, a streamlined process for dealer and adviser registration in multiple jurisdictions will come into force, which will replace the current National Registration System and create the passport system for registrants.

The Multilateral Instrument 11-102 Passport System will extend the passport to the dealer and advisor community. St-Gelais says it is the last step in fulfilling a major commitment in the memorandum of understanding regarding securities regulation among the governments of passport jurisdictions. Ontario is not a passport jurisdiction.

“With the extension of passport to dealers and advisors, the passport system will be fully implemented,” St-Gelais says. “This final phase of passport will give market participants faster and simpler access to the Canadian capital markets and will benefit investors in all provinces and territories.”

On that same day, National Policy 11-204 Process for Registration in Multiple Jurisdictions will also go into effect. It will replace and streamline the current National Registration System and establish the process for obtaining registration in multiple jurisdictions, including Ontario.

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Poached advisors cost Morgan $1 million

A team of financial advisors hired by Morgan Stanley is going to cost the firm an extra $1 million, after an arbitration panel sided with Strand, Atkinson, Williams & York, the firm from which they were poached.

Strand alleged the departing advisors — which included one of the firm’s name partners and its president — colluded with Morgan to take client information with them when they left.

The case was heard by a Financial Industry Regulatory Authority (FINRA) panel, which found the advisors had breached their fiduciary duty, and that Morgan had aided and abetted the breach.

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U.S. planning coalition appears before congress

The U.S.-based Financial Planning Coalition was slated to testify before the House Committee on Financial Services on the need to better protect consumers seeking financial advice on Friday.

The Coalition is comprised of NAPFA, the CFP Board of Standards and the Financial Planning Association. Diahann W. Lassus, CFP, CPA/PFS and chair of The National Association of Personal Financial Advisors (NAPFA), was expected to testify on behalf of the coalition. Lassus will advocate for more rigorous standards for financial intermediaries that deliver financial planning advice.

According to prepared testimony, Ms. Lassus will call for functional regulation of financial planners and the establishment of baseline standards for training, experience and competence.

She will also point to the need for an unambiguous fiduciary duty standard for all financial planners and advisors and implore Congress to avoid undermining the fiduciary duty already in place under the Investment Advisers Act of 1940.

“We are pleased that Committee Chairman Barney Frank (D-Mass.), Ranking Member Spencer Bachus (R-Ala.) and the members of the Committee are interested in the perspective the coalition has on this pressing issue. We look forward to working with Congress to ensure consumers seeking financial planning advice are protected,” the coalition said in a prepared joint statement.

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OSFI appoints assistant superintendent

The Office of the Superintendent of Financial Institutions (OSFI), announced the appointment of Mark White as Assistant Superintendent, Regulation Sector effective July 27, 2009.

OSFI’s Regulation Sector includes such areas as Legislation and Approvals, Capital, Accounting and Research, Actuarial, Private Pension Plans, Legal Services and the International Advisory Group.

White joined OSFI in April 2008 as senior director of the Capital, Accounting and Research Division. Previously, he was at RBC Capital Markets for nearly seven years in several positions, including managing director and global head of the strategic transactions group.

“I am pleased to welcome Mark to OSFI’s Executive Committee and know that his industry experience will be of great value to the Office in continuing to deliver on its mandate,” says Julie Dickson, the Superintendent of Financial Institutions. “Mark is replacing Bob Hanna, who is retiring after more than 30 years of service to OSFI,”

Dickson says Hanna has agreed to stay on in an advisory capacity.

(07/17/09) staff


The staff of have been covering news for financial advisors since 1998.