Earlier this month, two large investment fund managers, Mackenzie Financial Corporation (Mackenzie) and Scotiabank’s 1832 Asset Management LP (1832), entered into settlement agreements with the Ontario Securities Commission (OSC) regarding non-monetary benefits and activities that they had provided to participating dealers or dealing representatives over and above what is permitted under National Instrument 81-105 Mutual Fund Sales Practices (NI 81-105). NI 81-105 regulates industry participants’ sales practices in connection with the distribution of publicly offered securities of mutual funds.
The settlement agreements describe various non-monetary benefits and activities that the fund managers provided to participating dealers and that ran afoul of the restrictions in NI 81-105.
The penalties are substantial. Mackenzie and 1832 agreed to pay administrative penalties of $900,000 and $800,000, respectively. Each firm also is paying $150,000 for investigation-related costs.