Both the Investment Industry Association of Canada (IIAC) and the Investment Funds Institute of Canada (IFIC) have welcomed CSA’s latest proposals on embedded commissions and client-focused reforms.

Read: DSC ban, multiple conduct changes coming from CSA

In a Thursday statement, IFIC says the proposals are “designed to enhance the client-registrant relationship,” and that they take “a harmonized national approach” to protecting investors and aligning their interests with those of their advisors.

The organization, which speaks on behalf of the investment funds industry, argues the banning of DSC “will reduce choice for some investors,” but is happy the regulator has allowed continuation of embedded commissions within mutual fund products.

Investors should have the freedom to choose the investment products and services that best achieve their financial goals,” the statement said.

Throughout the summer, and when CSA publishes its official DSC and trailers proposals, IFIC says it will review the entire package and offer detailed comment.

IIAC, in its release, characterizes the proposals as “the culmination of extensive consultations between the investment industry and securities regulators across the country.” Over several years, tensions have risen between investor and industry groups due to detailed consultations on the potential need for a best interest standard, titles reform and more—which aren’t fully off table just yet, as CSA says in its notices.

Read: What’s loved and loathed about CSA’s latest proposals

Nonetheless, IIAC vice-president Michelle Alexander says in the group’s release, “The proposed reforms have moved away from a sweeping and vague best interest standard that would have had: uncertain application; provoked client and advisor confusion; and contributed to negative consequences for investors, advisors and the capital markets.”

The association supports banning DSC and maintaining embedded commissions, and will further review all the proposals.

The client-focused reforms are out for comment until Oct. 19.

MFDA and IIROC’s responses

In its June 21 notices, CSA notes both of Canada’s SROs are “committed to changes at the core of the proposed amendments, which would require registrants to promote the best interests of clients and put clients’ interests first.”

MDFA, when reached by Advisor.ca via email, said, “We appreciate the opportunity to work with the CSA in this initiative and look forward to the establishment of harmonized standards that promote the best interests of Canadian investors.”

IIROC, in a Thursday release, says its goal was to “better align the interests of investment dealers, advisers and representatives with the interests of their clients, improve outcomes for clients and make clearer to clients the nature and the terms of their relationships with registered advisors.”

It echoes CSA’s sentiment that the best interests of clients are key, and that it plans to help with “harmonizing these requirements across regulatory platforms and setting a higher standard of conduct for all registrants.”

We believe that the proper management of conflicts of interest, and compensation-related conflicts in particular, which are among the issues dealt with in these reforms, is critical to improving public confidence in our capital markets and our financial system,” the SRO concludes.

Also read:

Soliciting dealer arrangements: IIAC responds

Worried about conflicts of interest? IIROC and MFDA are watching (from 2016)