WHAT’S NEW WITH THE CAC?
As we reach the midway point of the year, we turn our attention to several advocacy files dominating the regulatory agenda. Recently, our focus has been on the regulatory priorities of reducing regulatory burden, fostering capital formation, and advancing investor protection and transparency. We look forward to participating in the acceleration of these matters as the focus of major regulatory projects turns from policy formation to implementation. As we continue to develop our voice and strengthen our relationships with policymakers and regulators, fulfilling our mandate to advance market integrity, transparency, and investor protection is more important than ever.

PUBLISHED COMMENT LETTERS 
IIROC Client Focused Reforms – Proposed Rule Amendments for Public Comment 
The CAC supports publishing the proposed rules specific to Investment Industry Regulatory Organization of Canada (IIROC) dealer member firms and their business models. In the absence of a broad best-interest standard, we support the CSA’s new core requirement for registrants to put their clients’ interests first when making a suitability determination or dealing with a conflict. Retail suitability requirements should consider a range of alternative actions as IIROC prepares a second guidance note to clarify the enhanced suitability requirements. IIROC should include additional language explaining how a consideration of alternative results will lead to a recommendation that puts clients’ interests first. The current know-your-product (KYP) requirements should take hold before initiating any potential rules for shelf access. With respect to the specific exemptions from the Proposed Amendments, we agree that dealers who offer order execution only accounts should not be exempted from the product due diligence requirements for items they make available on their product shelf. 

Proposed Amendments to MFDA Regulatory Instruments to Conform to Requirements under the Client Focused Reforms Amendments to National Instrument 31-103 
The CAC is in favour of publishing the proposed rules specific to Mutual Fund Dealers Association of Canada (MFDA) member firms and their business models. Without a broad best-interest standard, we support the CSA’s new core requirement for registrants to put their clients’ interests first when making a suitability determination or dealing with a conflict. However, expectations surrounding the framework and diligence expected for investment products may still require clarification. We appreciate that draft Rule 2.2.6 will require members and approved persons to consider a reasonable range of alternative actions available to the approved person through the member at the time a suitability determination is made, and that the MFDA is preparing amendments to guidance set out under MSN-0069 suitability. The MFDA should include supporting language explaining how a consideration of alternative results will lead to a recommendation that puts clients’ interests first. We believe the current KYP requirements should take hold before initiating any potential incremental rules for shelf access. We note that additional and specific KYP guidance provided at this time may help pre-empt unintended consequences if additional rules were added in the future.  

HAVE YOUR SAY 
If you would like to participate surrounding these letters, provide comments to ongoing initiatives, or are interested in learning more about volunteer opportunities in advocacy or as a part of the CAC, please contact cac@cfacanada.org 

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WHAT IS THE CANADIAN ADVOCACY COUNCIL? 

The Canadian Advocacy Council (CAC) is a volunteer advocacy council for CFA Societies Canada, representing the 12 Canadian CFA Institute Member Societies and, ultimately, Canadian CFA charterholders. The council includes investment professionals from cross the country who review regulatory, legislative, and standard-setting developments affecting investors, investment professionals, and Canadian capital markets. The CAC strives to advance market integrity, transparency, and investor protection, and actively engages Canada’s securities regulators, self-regulatory organizations,industry associations, legislators, and other stakeholders through thoughtful leadership, direct engagement, and the publication of comment letters.