Learn more about what the ASC is doing to support market participants and investors.
Dec 19, 2019
Vancouver – Canadian securities regulators announced today that they will ban two types of commissions that are embedded in some mutual fund purchases.
Canadian Securities Administrators (CSA) Staff Notice 81-332, Next Steps on Proposals to Prohibit Certain Investment Fund Embedded Commissions explains that the participating provinces and territories expect to publish final amendments for adoption in 2020 that will eliminate:
"These expected rule changes, together with new conflict-of-interest rules that are being implemented under our Client Focused Reforms, will bring greater transparency to the fees paid by investors when they buy mutual funds,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
The jurisdictions participating in both bans are Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Quebec, Saskatchewan and Yukon. Ontario will participate only in the ban on trailing commissions to dealers who only execute orders.
The expected rule changes banning upfront sales commissions will be published in early 2020, and the expected rule changes banning trailing commissions to dealers who only execute orders will be published later that year. The participating jurisdictions anticipate that both bans will have a transition period of at least two years from the publication date.
The ban on upfront sales commissions from investment funds to dealers will eliminate an incentive for dealers to recommend investment products that provide them with an upfront commission from the fund company, instead of recommending other suitable investments that have lower costs and do not have redemption fees. The ban on trailing commissions to certain dealers will end the charging of fees for advice that those brokers do not provide.
CSA Staff Notice 81-332 Next Steps on Proposals to Prohibit Certain Investment Fund Embedded Commissions is available on participating jurisdictions’ websites.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
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For more information:
Kristen Rose Ontario Securities Commission 416-593-2336
Brian Kladko British Columbia Securities Commission 604-899-6713
Jason Booth The Manitoba Securities Commission 204-945-1660
Shannon McMillan Financial and Consumer Affairs Authority of Saskatchewan 306-798-4160
David Harrison Nova Scotia Securities Commission 902-424-8586
Renée Dyer Office of the Superintendent of Securities Newfoundland and Labrador 709-729-4909
Rhonda Horte Office of the Yukon Superintendent of Securities 867-667-5466
Hilary McMeekin Alberta Securities Commission 403-592-8186
Sylvain Théberge Autorité des marchés financiers 514-940-2176
Sara Wilson Financial and Consumer Services Commission, New Brunswick 506-643-7045
Steven Dowling Government of Prince Edward Island Superintendent of Securities 902-368-4550
Jeff Mason Nunavut Securities Office 867-975-6591
Tom Hall Office of the Superintendent of Securities, Northwest Territories 867-767-9305