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. As we noted in our September 2017 Bulletin the Ontario Securities Commission (OSC) will focus its compliance reviews this year, at least in part, on firms with a significant number of senior clients. According to its 2017-18 Statement of Priorities, the OSC also plans to publish a Seniors Strategy, setting out a roadmap of targeted approaches to address issues relating to seniors.
We also want to draw your attention to the Final Report on Vulnerable Investors published by FAIR Canada and the Canadian Centre for Elder Law (CELC) earlier this month, after a year-long study of reform initiatives in other countries and consultations in Canada. The report recommends, among other things, that:
- Firms be authorized to place a temporary hold on transactions in case of suspected abuse;
- Securities regulators develop a conduct protocol that firms can use to design processes for identifying and protecting vulnerable clients;
- A legal safe harbour be created so that firms can report possible abuse without facing legal problems;
- Firms be required to provide mandatory training to their employees on issues relating to abuse of vulnerable clients; and
- Firms be required to make reasonable efforts to obtain information about a “trusted contact person” for every non-institutional client