As we noted in our November 2017 Bulletin, financial sector regulators are increasingly concerned about seniors because, as a class, they are at greater risk of cognitive impairment and/or social isolation and therefore particularly vulnerable to financial exploitation. On March 20, the Ontario Securities Commission (OSC) outlined its action plan for seniors in Staff Notice 11-779 Seniors Strategy (Notice).
The Notice summarizes research relevant to the financial lives of older Canadians as well as recent, regulatory and industry initiatives undertaken in Canada and globally to address the needs of seniors. It then sets out the OSC’s action plan, which includes the following:
- Introduce a requirement for registrants to make reasonable efforts to obtain the name and contact information for a client’s “trusted contact person”, who may be reached if there is a concern about the client’s behavior or transactions in the client’s account;
- Through a safe harbour or similar mechanism, enable registrants to place a temporary hold on disbursements from a client’s account or make disclosure to a trusted contact person when they reasonably believe that:
- financial exploitation or fraud has occurred, is occurring or will be attempted; or - a client’s judgment may be impaired;
Provide guidance to registrants on effective communications with clients as they age;
Address registrants’ use of confusing and misleading titles, designations and marketing practices;
Strengthen the Ombudsman for Banking Services and Investments (OBSI);
Work with other regulators and organizations to design policies and programs to help seniors in areas such as powers of attorney and privacy laws; and
Enhance its outreach and education programs, including through the development of “white label” forms and educational materials that firms can adopt and deploy to their representatives and clients.
The Notice does not set a timeline for any of these initiatives, but it does indicate that the OSC will report on its progress in one year. Importantly, the Notice also indicates that staff “expect that registered firms and their representatives will review and develop ways to improve their own practices with respect to older investors.”
We will continue to monitor developments in this area.