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CSA extends implementation of Client Focused Reforms

By The IJ Staff | April 17 2020 10:00AM

Photo: Freepik

The Canadian Securities Administrators (CSA) is giving firms more time to implement the conflict of interest provisions and the relationship disclosure provisions of the Client Focused Reforms package because of COVID-19.

We recognize that as a result of the pandemic registered firms are facing enormous and unprecedented operational pressures that impair their capacity to pursue the scheduled implementation of the Client Focused Reforms,” said Louis Morisset, CSA Chair and president and CEO of the Autorité des marchés financiers. “While reiterating the importance of these reforms, we are providing this relief to ensure registrants have the capacity to remain focused on front-line activities and use all their efforts to diligently respond to the current needs of their clients.”

Firms redeploying staff during pandemic

Due to the pandemic, many registrants will not be able to implement the conflicts of interest reforms since they are redeploying their staff to ensure key business functions continue to operate, said the CSA.

Registrants will now have until June 30, 2021 to implement the changes to the conflicts of interest provisions and until December 31, 2021 for the relationship disclosure provisions. Remaining changes will take effect on December 31, 2021.

The 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. They also require that registrants address material conflicts of interest in the best interest of their clients.

CSA mindful of issues

In granting the relief orders, the CSA said it has been mindful of balancing investor protection goals of the reforms and the implementation challenges faced by firms in the current situation.

The CSA is encouraging registrants to consider the reforms when interacting with their clients now, since clients are relying on registrants more than ever to provide them with advice that puts their interests first during these challenging circumstances.

The announcement by the CSA was welcomed by the Investment Funds Institute of Canada (IFIC). “IFIC believes that the CSA has taken a balanced and responsive approach to challenges that firms are experiencing in relation to COVID-19,” said Paul Bourque, IFIC’s president and CEO. “This extension will enable firms to focus their efforts on responding to the immediate needs of their clients during this difficult time.”

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