Over the last few years, there has been a whirlwind of regulatory developments to follow. Many of the consultations, proposals and changes have been the result of years of research as well as pressure—from both inside and outside the industry—to enhance the advisor-client relationship.
With particular focus on CSA’s push for targeted reforms and a best interest standard, here’s a recap of some client-focused regulatory developments and why they matter.
Release of consultation paper 33-403, which was described by CSA as a forum for stakeholders to discuss the “desirability and feasibility of introducing a statutory best interest duty.”
Status report comes out on 33-403, via staff notice 33-316. It found there was “significant” disagreement about two things: whether the current regulatory framework for advisors adequately protects investors, and what regulatory response was required. Read: Disclosure is broken: CSA best interest roundtable
Release of consultation paper 33-404, which built on 33-403 through related consultations and research. It introduced the CSA’s targeted reforms, a set of regulatory amendments related to conflicts of interest, KYC, KYP, suitability, titles and designations, proficiency and the role of compliance staff. Read: CSA appears poised to propose best interest standard and What the CSA’s bombshell proposals mean for you
The Ontario government received preliminary policy recommendations for tougher financial industry oversight from an expert committee, including one recommendation for a statutory best interest duty (SBID). The committee said, based on consultation, it would prepare a final report.
The Ontario government’s expert committee released its final report (dated Nov. 1, 2016) on how to regulate financial advisors and the giving of advice.
Ontario’s provincial budget said tougher standards for financial industry oversight were coming. Finance Minister Charles Sousa said he would like to see financial industry reforms, under the new Financial Services Regulatory Authority, completed before the June 2018 provincial election.
A status report on 33-404 said only two provinces (Ontario and New Brunswick) were committed to BIS. CSA said it planned to publish rule proposals for its targeted reforms by the end of fiscal 2017-2018. Read: Only 2 provinces ‘committed’ to BIS, but work continues: CSA and Battle over CSA reforms reveals industry cracks
The OSC’s annual report says the regulator is working with CSA on targeted reforms and, alongside the New Brunswick’s Financial and Consumer Services Commission, on the BIS.
The Ontario government’s fall economic update mentions toughening advisor oversight, but not the proposed SBID. At Advocis’s Symposium 2017, during a Q&A about potential advisor regulation, expert committee member Lawrence Haber spoke about the developments (Read: Ontario on track to regulate advisor titles. Are you ready?).
The Ontario government publishes a consultation document for comment, outlining proposed titles reform and a plan to create a database of credentialed financial planners, but doesn’t mention the SBID. Read: Ontario seeks input on title reform for financial planners and advisors
The 2018 provincial budget mentions restrictions on the use of titles and a new framework but doesn’t address the SBID or the database explicitly. Read: Is regulatory uncertainty the new norm for Ontario?
On March 29, OSC pledged to publish proposals for the BIS in the coming year in its draft 2018-2019 Statement of Priorities. It would also like to embed “a new client/advisor standard in the core targeted regulatory reforms” tied to National Instrument 31-103.