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Ontario Securities Commission’s Investor Advisory Panel Releases 2018 Annual Report

Date 14/05/2019

The Investor Advisory Panel (the Panel) released its 2018 Annual Report summarizing its activities, submissions, consultations, and meetings during the calendar year.

In 2018, the Panel continued to focus on what it considers to be critical areas of investor protection: discontinuing embedded commissions and other forms of conflicted compensation; enhancing risk profiling; addressing misleading titles and proficiency; strengthening the Ombudsman for Banking Services and Investments (OBSI); adopting more investor-focused governance features in the design of the Cooperative Capital Markets Regulator (CCMR); improving cost disclosure; and introducing a best interest standard.

While the Panel raised concerns that the proposals contained in Client Focused Reforms: Proposed Amendments to National Instrument 31-103 and Companion Policy 31-103CP (Client Focused Reforms) fell short of adopting an overarching best interest standard, they acknowledged that the infusion of best interest principles into the areas of know-your-client, know-your-product, suitability and conflict of interest mitigation will advance investor protection if rigorously overseen and enforced.

“While the Client Focused Reforms lay the groundwork for a transition to more professional industry practice standards, for them to succeed, vigilant compliance and active enforcement by the regulators is essential,” said Neil Gross, Chair of the Investor Advisory Panel.

Addressing the widespread use of misleading titles in the industry will remain a high priority for the Panel in the year ahead. “We are pleased to see the Minister of Finance propose a new title protection framework in this year’s budget and we urge that these reforms be expedited,” said Gross.