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Legal and Regulatory Affairs

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Regulatory Submissions and Bulletins

Latest Submissions

Ontario Ministry of Finance: 2023 Budget Consultations (January 12, 2023)

Advocis responded to the Ontario Ministry of Finance’s 2023 Budget Consultations. Our ask was straightforward: allow investment professionals to incorporate their practices, in the same manner as other professionals are able to do. We pointed out how this is a matter of professional fairness and the status quo creates needless regulatory burden. Incorporation could also boost Ontario’s economy by catalyzing the growth of small businesses across the province.

CSA: Access-Based Model for Investment Fund Reporting Issuers (December 26, 2022)

Advocis commented on the CSA’s proposals to implement an access-based model for investment fund reporting issuers. In our response, we support the proposed changes as we believe that an access-based model can reduce regulatory burden. However, we invite regulators to expand the scope of the access-based model to include ETF Facts and Fund Facts. In addition, we recommend that in designing SEDAR+ as a common and centralized repository for all designated documents, the CSA focus on addressing retail investors’ needs. Lastly, we ask regulators to provide flexibility to fund issuers and allow them to use reasonable means of informing and notifying consumers about the availability of designated documents.

CCIR: Discussion Paper on Upfront Compensation in Segregated Funds (November 7, 2022)

Advocis responded to the Discussion Paper on Upfront Compensation in Segregated Funds published by the CCIR and CISRO. In our response, we supported the advisor chargeback option. We highlighted the benefits of segregated funds and the importance of upfront commissions, particularly for new advisors and for clients with limited capital. In practice, regulatory arbitrage and other concerns have not materialized. Instead of eliminating advisor chargeback, we suggested reforms to further reduce any risks associated with segregated funds and this compensation structure.

British Columbia Ministry of Finance – Consultation Regarding Restricting Insurance Licenses (October 3, 2022)

Advocis commented on British Columbia’s proposal to implement a restricted licensing framework for those involved with sales of incidental insurance products. In our response, we argue that due to the complexity of life and health products, they are not suited for a restricted licensing regime. However, if British Columbia proceeds with the proposal, the framework must be further enhanced by addressing concerns related to licensing at the individual level, training and education, as well as supervision by fully-licensed agents.

FCAA: Consultation [2022-001], The Financial Planners and Financial Advisors Regulations (September 22, 2022)

The Saskatchewan FCAA conducted a second consultation on its proposed financial professionals title protection framework. In our response, we supported the FCAA proposal to raise standards for the financial advisor title to align with the financial planner title. The benefits of higher professional standards outweigh the decrease in harmonization with the Ontario framework. We also propose a collaborative approach to deal with defunct credentialing bodies and oppose a requirement to add a product listing to the financial advisor title.

CSA and CCIR: Total Cost Reporting for Investment Funds and Segregated Funds (July 27, 2022)

Advocis commented on the Total Cost Reporting for Investment Funds and Segregated Funds proposals (sometimes referred to as CRM-3). The Proposals aim to enhance ongoing cost disclosure and product performance reporting for investment funds and segregated funds. Advocis proposed simplified disclosure, argued that it is inappropriate to require dealers to verify the information provided by fund managers, and flagged uncertainty around “significant” costs in the segregated fund guidance.

CSA: Notice and Request for Comment 25-304, Application for Recognition of New Self-Regulatory Organization (June 27, 2022)

Advocis commented on the New SRO’s Interim Rules which will take effect upon commencement of its operations. In our response, we urge regulators to expand the practice of directed commissions to representatives on the investment dealer platform and endorse a true incorporation model for advisors, regardless of platform. We also discuss the importance of mandating accredited continuing education through recognized third-party services. Lastly, we share our concerns with respect to mandating the Conduct and Practices Handbook for the new registrant class of mutual fund-only representatives at dual-registered firms.

FSRA: Consultation [2022-007], Proposed Principles of Conduct for Insurance Intermediaries (May 3, 2022)

FSRA is adopting CISRO’s principles of conduct for insurance intermediaries into its regulatory framework. In our response we discuss how certain substantive elements of the principles can be further improved. We also ask for clarification in regard to FSRA’s implementation plans for the principles including the role FSRA’s Life Agent Unit might play in examination of agents’ conduct.

FSRA: Consultation [2022-006], Proposed Principles-based Regulation Approach Guidance (April 29, 2022)

FSRA aims at reducing the regulatory burden by moving away from “prescriptive checklists” and adopting a more flexible regulatory regime. In our comment, we express support for the adoption of a principles-based and outcomes-focused regulatory approach. We also point out areas that can be further improved to better achieve the goals set out by FSRA in this proposal. We welcome further discussions with FSRA on developing guidance on its approach to investigations and enforcement.

CCIR: Consultation on Proposed Incentives Management Guidance (April 4, 2022)

The CCIR and CISRO released proposed Incentive Management Guidance for public consultation. The Guidance aims to align incentive arrangements in insurance with the Fair Treatment of Customers (FTC) Guidance. Advocis’ submission highlights the wide array of business models in the insurance sector, advisors’ lack of control over incentive design, the importance of ongoing service of insurance policies, the lack of a definition of “unfair outcomes” in the guidance, and the problematic examples listed in the appendix.

Ontario Ministry of Finance: Capital Markets Act Consultation (February 18, 2022)

The Government of Ontario published a draft Capital Markets Act (CMA) to replace the Ontario Securities Act and modernize capital markets regulation. In our response, we urge Ontario to introduce advisor incorporation, protect independent contractors who act as whistleblowers from reprisals, provide a more definitive list of unfair practices, and centre the advisor-client relationship throughout the CMA drafting process.

FCNB: Consultation on Insurance Intermediaries Licensing and Obligations (February 7, 2022)

The FCNB’s proposed rules consolidate and update regulations regarding the classes of licenses that may be issued. In our comments, we welcomed some of the proposed changes but expressed concern regarding the creation of an MGA-specific licensing framework. We invited the FCNB to share the policy objectives behind these changes.

Insurance Council of BC: Accredited Continuing Education Program (December 31, 2021)

The Insurance Council of BC plans to introduce a CE accreditation program to create greater clarity about what courses qualify toward licensees’ annual CE requirement. In our response, we ask Council to consider making accreditation mandatory and we ask that it leverage existing CE accreditation infrastructure by utilizing the services of experienced third-party accreditors.

Ontario Securities Commission: Statement of Priorities for 2022-2023 (December 20, 2021)

Advocis commented on the OSC’s 2022-2023 statement of priorities. We emphasized the importance of clarifying rules and developing clear guidelines with respect to the Client Focused Reforms. We also encouraged the OSC to harmonize disclosure regarding ESG for investment funds and to permit advisor incorporation. We expressed our interest in assisting with TestLab and other initiatives focused on improving the investor experience.

FSRA: Consultation [2021-18], Revised Application and Supervision Guidance (December 13, 2021)

In FSRA’s fourth consultation on the Title Protection Framework, the regulator re-published its Application Guidance and Supervisory Guidance. Key changes include the inclusion of a requirement to prioritize the client’s interests, the removal of the “titles deemed not reasonably confusing” schedule, and additional disclosure requirements regarding credentials and complaint-handling options.

FSRA: Consultation Paper [2021-017], Innovation Framework (November 18, 2021)

Advocis has provided comments on FSRA’s Innovation Framework. The proposed framework details guiding principles to innovation and promotes the use of Test and Learn Environments (“TLE”) starting with the auto sector. The framework aims to reduce regulatory barriers for new market entrants in this space. In our response, we express how Advocis’ Technology and Innovation Committee can provide a unique perspective in participating and engaging with FSRA’s innovation office and its TLE program.

FSRA: Consultation [2021-016], Proposed 2022-2023 Statement of Priorities (October 29, 2021)

In our comments to FSRA, we support the regulator’s work on embracing innovation and addressing advisor supervision issues. We recommend that it complement its efforts with proactive enhancements to licensee education and accredited continuing education.

FCNB: Title Protection 2021, Regulation of Financial Planner and Financial Advisor Titles (October 25, 2021)

New Brunswick’s Financial and Consumer Services Commission is contemplating its own title protection framework. We urge the province to proceed with this project by introducing framework legislation and entrusting the regulator with the operational details. We also recommend a mechanism to recognize and reciprocate the work done in this area by its peer regulators across the country.

FSRA: Consultation [2021-10], Amendments to the FSRA Fee Rule to create the FP/FA fee structure (October 20, 2021)

In our response to FSRA’s third consultation on the proposed title protection framework, we provide our thoughts on how the fee structure should work. We ask FSRA to ensure the framework is affordable, inclusive and easy for consumers to understand. We also ask the regulator to be mindful how it addresses holders of multiple credentials.

FSRA: Consultation [2021-015], Life Agent Reporting and Insurer Oversight Obligations Guidance (October 8, 2021)

FSRA has proposed guidance setting out its expectations concerning the reporting of errors and omissions insurance, continuing education, and contracted insurers by life insurance agents through FSRA’s Licensing Link platform. This guidance consolidates, standardizes, and clarifies earlier guidance issued by FSCO. Advocis supports reductions in regulatory burden when this can be achieved without harming consumer protection.

CSA: Position Paper 25-404, New Self-Regulatory Organization Framework (October 4, 2021)

Advocis commented on the CSA’s proposal to establish a single national self-regulatory organization (SRO). In our submission, we emphasized that the CSA should promote a diversity of stakeholders in the marketplace and a level playing field for independent advisors and dealers. We also encouraged the CSA to ensure that advisors have meaningful representation in the governance of the new SRO that is reflective of the modern client-centric approach to financial advice.

FCAA: Consultation [2021-001], The Financial Planners and Financial Advisors Regulations (September 1, 2021)

Advocis responded to the Financial and Consumer Affairs Authority of Saskatchewan’s consultation regarding the regulations for its Title Protection Framework. We emphasized that from the consumer’s perspective, both the titles of Financial Advisor and Financial Planner are trusted and therefore both should be regulated to a high standard. We also noted that training in only one technical area is too narrow to warrant professional recognition.

FSRA: Consultation [2021-008], Revised Proposed Rule on Unfair or Deceptive Acts or Practices (August 11, 2021)

Advocis’ response to the Revised Proposed Rule on Unfair or Deceptive Acts or Practices (UDAPs) in the insurance sector. Advocis welcomes FSRA’s decision to continue prohibiting rebating in the life and health insurance sectors. We also highlight several areas in the insurance sector where further modernization would be beneficial. Advocis welcomes further discussions with FSRA on incentives in the insurance sector

CISRO Consultation on Principles of Conduct for Intermediaries (July 9, 2021)

CISRO’s Principles of Conduct intend to complement and supplement the CCIR/CISRO Fair Treatment of Customers Guidance and reflect minimum regulatory standards of conduct that are expected from intermediaries. In our submission we highlight the centrality of the clients’ interest first, the importance of delivering advice by competent intermediaries and aligning CISRO’s Principles with consumer protection measures such as title protection.

FSRA: Consultation [2021-003], Financial Professionals Title Protection Rule and Guidance (June 21, 2021)

This consultation included a revised General Rule; application guidance for Credentialing Bodies and their credentials; the supervisory framework for overseeing Credentialing Bodies; and an initial approach to the credentialing fee structure. Advocis voiced its concern with FSRA’s stance on the Financial Advisor title, asked the regulator to further tighten its approach to misleading titles and inquired about the assumptions being used in developing the fee schedule.

CSA's Proposed Amendments to Outside Activity Reporting (May 5, 2021)

Advocis is encouraged by the CSA’s proposed amendments to the reporting requirements around outside activities. While we have some recommendations and have highlighted some areas where we would like to see additional clarification, the proposed categories provide a relatively straightforward way for individuals to identify whether they are engaged in outside activities that should be reported to the regulator.

FSRA’s Proposed Rule [2020-002], Unfair or Deceptive Acts or Practices (March 18, 2021)

In our submission to FSRA, Advocis raised significant concerns with the plan to permit rebating in the life and health insurance sector. We are concerned that the proposed restrictions would not adequately address consumer protection concerns and would create an unlevel playing field for independent advisors.

ICBC Consultation on Supervisory Role of MGAs (February 15, 2021)

Advocis responded to the Insurance Council of British Columbia's proposed new guideline that would provide additional clarity on the roles and responsibilities of MGAs in the screening and monitoring of life agents. We believe that this critical consumer protection function must remain a shared responsibility between MGAs and insurers.

Ontario Securities Commission Statement of Priorities 2021-2022 (December 16, 2020)

The OSC’s priorities for 2021-2022 include promoting confidence in Ontario’s capital markets, reducing regulatory burden, facilitating financial innovation and strengthening the OSC’s organizational foundation. In our submission, we encouraged the OSC to work with the CSA to develop clear and useful guidance for interpreting and applying the Client Focused Reforms (CFRs). We also encouraged the OSC to work with FSRA to explore opportunities to reduce the risk of regulatory arbitrage between mutual funds and segregated funds. We introduced the Technology Task Force as a potential resource for the OSC’s Office of Economic Growth and Innovation and expressed our willingness to assist the OSC with initiatives focused on improving the investor experience.

FSRA’s Proposed Rule [2020-001], Financial Professionals Title Protection (November 12, 2020)

Advocis responds to FSRA’s proposed framework for the protection of the titles of Financial Advisor and Financial Planner. We state that the purpose behind the exercise must be to enhance consumer protection – so FSRA should use this generational opportunity to enhance professional standards. We argue that a qualifying credential should be cross-sectoral and product-agnostic to reflect the primacy of the advisor-client relationship.

FSRA Proposed 2021-22 Statement of Priorities (November 3, 2020)

Advocis commented on FSRA's Proposed 2021-22 Statement of Priorities. We are pleased that FSRA remains focused on consumer protection, transitioning to a principles-based approach and regulatory modernization efforts. We voiced our desire to participate in key initiatives including the title protection framework for financial advisors and financial planners, enabling innovation and the regulation of segregated funds.

CSA's Consultation on the Self-Regulatory Organization Framework (October 23, 2020)

Reviewing the stakeholder comments and proposals from both IIROC and the MFDA, we feel that the need for a consolidated SRO is evident. Advocis encourages the CSA to act with urgency, and implement a single SRO that can respond effectively to the changing needs of Canadian businesses and investors.

Advocis-CALU joint letter to the Ministry of Finance on Beneficiary Designations (September 16, 2020)

A recent Ontario court decision could jeopardize estate planning as it found that a designated beneficiary of a registered asset held that asset in trust for the grantor's estate. In a joint submission to the Ministry of Finance, Advocis and CALU explain the implications of the decision and we urge the Government to amend certain laws to make clear when a designated beneficiary has the presumption of beneficial ownership.

Ontario Capital Markets Modernization Taskforce Consultation Report (September 4, 2020)

Advocis addresses specific recommendations in the Consultation Report and requests that the Taskforce consider including formal support for the title protection initiative and the CCMR project in its final report to the Minister of Finance.

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