Darin Renton -
In a manner often reserved for best-selling novels and blockbuster movies, the Canadian Securities Administrators (CSA) recently issued advance notice of the upcoming publication of CSA Consultation Paper 33-404 – Proposals to Enhance the Obligations of Advisers, Dealers, and Representatives Toward Their Clients (Consultation Paper) expected in late April 2016. CSA Staff Notice 33-317 Next Steps in the CSA’s Work to Enhance the Obligations of Advisers, Dealers and Representatives Toward Their Clients states that regulatory action is required: the CSA will be seeking comment on specific proposals to enhance the obligations of registrants towards their clients. The comment period will run for a period of 120 days, extending through the summer holiday season.
This marks the reactivation of the comment process on the proposal for a statutory best interest standard that the CSA signalled in its December 17, 2013 status report following consultation on CSA Consultation Paper 33-403 (Prior Consultation Paper). In the Prior Consultation Paper, the CSA proposed for comment the standard that every adviser and dealer (and each of their representatives) that provides advice to a retail client with respect to investing in, buying or selling securities or derivatives shall, when providing such advice,
(a) act in the best interests of the retail client, and
(b) exercise the degree of care, diligence and skill that a reasonably prudent person or company would exercise in the circumstances.