A Summary

Of note in the short-term is:

  1. further implementation of CRM requiring new and amended client account relationship disclosure, conflicts of interest disclosure and enhanced suitability assessment;
  2. new Dealer Member Rule 43 prohibiting employees and APs from directly or indirectly engaging in personal financial dealings with clients; and
  3. new guidance on outsourcing agreements (final guidance was issued on January 13, 2014 and confirms that most “client-facing activities” are required to be performed by APs and therefore cannot be outsourced and that certain “core” activities that are eligible for outsourcing will be subject to greater regulatory scrutiny — a copy of the full Bulletin can be found here).

Longer term initiatives include:

  1. new guidance on supervision and suitability requirements any time a leveraged strategy is used or recommended;
  2. CRM(2) providing for new and enhanced client disclosure including pre-trade disclosure of fees and charges;
  3. revised sanction guidelines; and
  4. new guidance on compliance and supervision when dealing with senior investors.

MFDA Compliance Initiatives – The MFDA has set out its 2014 compliance initiatives in a Compliance Bulletin which can be found here.

OSFI Oversight of CDOR – OSFI has announced it is taking responsibility for an enhanced CDOR oversight framework being developed by the Canadian Heads of Regulatory Agencies (which includes the Bank of Canada, Department of Finance, OSFI, the OSC, the AMF, the ASC and the BCSC) in the wake of irregularities associated with the setting of LIBOR. OSFI will set out its expectations in relation to CDOR submission activities, which are now conducted solely within major Canadian banks, throughout 2014. OSFI’s announcement can be found here.