Securities Snapshot - April 2015

OSC

OSC Released Draft Statement of Priorities

On April 2, 2016 the OSC issued Notice 11-771, Draft Statement of Priorities for the Financial Year to End March 31, 2016. Comments are due by June 1, 2015. Challenges and issues noted by the OSC include:

Demographics, including a growing seniors population which generate investor focused issues; A recognition that: Reliance on advice is expected to grow to meet changing investor profiles which includes a shift from defined benefit to defined contribution pension plans. Issues related to market conduct, firm compliance cultures and how advisors meet the interests of their client are areas of focus; A well-functioning investor/advisor relationship is critical, which includes improving the standards of financial advice, raising competency and increasing transparency regarding financial advice; An increasing regulatory burden affects the competitiveness of Ontario capital market; Investor protection is listed as the OSC's first goal, which includes reference to Know Your Client, Know Your Product and suitability obligations. It also includes reference to an investor's need to better understand the cost of advice and be assured the compensation structure does not adversely affect the quality of advice. In addition to aging demographics, other vulnerable investor groups are described as including those who are seeking to support education costs for children or meet lifestyle consumption goals.

Other goals include the promotion of women on boards and in executive and senior management position, effective compliance supervision and enforcement through various measures which include enhanced enforcement and adjudicative processes, and the promotion of financial stability which includes the regulation of the fixed income market.

A full copy of the Draft Statement of Priorities is found here.

IIROC

IIROC Enforcement

IIROC Releases Enforcement Report

IIROC released its 2014 Enforcement Report. The greatest number of regulatory violations prosecuted by IIROC remains violations in respect of due diligence/handling of client accounts/suitability. A full copy of the Enforcement Report may be found here.

Highlights From Other IIROC Enforcement Proceedings

Chief Compliance Officer's Failure to Supervise - Re Menzel

By way of settlement agreement, an Ultimate Designated Person, Chief Compliance Officer and a Supervisor agreed to a fine of $20,000, a six-week suspension from registration as a Supervisor, and...