IFIC supports CIRO’s goal to level playing field for advisor compensation
March 25, 2024 (Toronto) – The Investment Funds Institute of Canada (IFIC) has responded to a Canadian Investment Regulatory Organization (CIRO) position paper that laid out several options to level the playing field for advisor compensation. This is a long-standing issue and we appreciate the opportunity to provide industry input.
“IFIC supports CIRO’s regulatory objectives to develop a consistent approach to advisor compensation for all Approved Persons – both mutual fund and investment dealer representatives,” said Andy Mitchell, President and CEO, IFIC, “as well as to protect investors, while minimizing the burden of regulatory development and implementation for CIRO, the Canadian Securities Administrators, and the industry.”
Of the three options presented in the position paper, IFIC’s recommendation is closest to CIRO’s “Incorporated Approved Person approach” (option 2) with some modifications.
We believe that allowing a corporation to engage in registerable and non-registerable activity may not require legislative amendments but could instead be implemented through amendments to national instrument (NI) 31-103, where permissible under local law. Legislative changes could take a long time and might be implemented at different times in each jurisdiction, thereby disharmonizing the system within Canada.
Another advantage of amending the NI is that the objective would be met in one step rather than the phased implementation in option 2. Allowing non-registerable activity in an interim phase and then shifting to a model that also allows registerable activity would mean two significant, successive operational changes.
To ensure that CIRO can achieve its oversight objectives, we recommend that the corporations that include ownership by CIRO-Approved Persons be overseen by CIRO.
About IFIC
The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together approximately 150 organizations, including fund managers, dealers, professional and back-office service providers, to strengthen the integrity of the investment funds industry, foster public confidence in investment funds, and enable investors to achieve good outcomes. By connecting savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.
For more information:
Christine Harminc
Senior Manager, Communications and Public Affairs
charminc@sima-amvi.ca
416-309-2313
