CANADA: CSA Publishes Rule Amendments to Implement Investor Protection Reforms

Friday October 4 2019

On 03^rd October 2019, the Canadian Securities Administrators (CSA) published rule amendments to implement the Client Focused Reforms across Canada. These reforms are based on the fundamental concept that clients’ interests come first in their dealings with firms and individuals that are registered to give investment advice and trade in securities (registrants).

Registrants will be required to address material conflicts of interest in the best interest of their clients and put clients’ interests first when determining the suitability of investments. These reforms introduce new obligations on registrants or codify best practices, particularly with registrants’ obligations to “know your product,” “know your client,” consider specific suitability factors, and disclose important information to clients.

The reforms are expected to increase investor confidence in the industry by better aligning industry conduct with investors’ expectations.

The reforms come into force across Canada on December 31, 2019, provided all ministerial approvals are obtained. There will be a phased transition period, with the reforms relating to conflicts of interest and the associated relationship disclosure provisions taking effect on December 31, 2020, and the remaining changes taking effect on December 31, 2021.

The reforms are amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and Companion Policy 31-103CP and can be found on CSA members’ websites.

Click on the above link for further information.