OSC CONSIDERING FIDUCIARY DUTY FOR DEALERS AND ADVISORS: A MOVE TOWARD A UNIFORM PLATFORM FOR PROFESSIONAL PRACTICE IN FINANCIAL SERVICES
Discussion paper will summarize the fiduciary duty debate at home and abroad and identify the key issues involved
The Ontario Securities Commission will publish a discussion paper examining whether to impose a fiduciary duty of dealers and advisors later this fall, the regulator said Monday.
In a staff notice detailing the work of the OSC’s compliance branch over the past year, the commission indicates that it is “considering whether an explicit legislative fiduciary duty standard should apply to dealers and advisers in Ontario”.
The OSC promised earlier this year, in its statement of priorities, that it would study the issue. That pledge came in response to calls from investor advocates, including the Canadian Foundation for Advancement of Investor Rights and the OSC’s Investor Advisory Panel, to look at whether advisors should be required to act in their clients’ best interests (a more stringent standard than the suitability standard that currently applies).
In the branch report, the OSC says that it intends to publish a discussion paper on fiduciary duty in the fall of 2011 “that will summarize the fiduciary duty debate (both domestically and internationally) and identify the key issues involved.”
It notes that it has been monitoring the fiduciary duty debate in Canada and internationally, and recent rule developments in the United States, Australia and the UK related to fiduciary duty.
“Recently, there have been important international developments on the issue of fiduciary duty,” it says, noting that the U.S. Securities and Exchange Commission is expected to introduce rules in 2012 that would create a common statutory fiduciary duty for investment advisors and broker-dealers when they are providing personalized advice to retail clients. In Australia, the government is also expected to introduce legislation in 2012 that will make advisors subject to a fiduciary duty when dealing with retail clients.
September 26, 2011
Posted by BEYOND RISK at 9/26/2011