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Advancing investor protection, industry professionalism and market integrity across Canada, CFA Societies Canada focuses attention on pressing advocacy files dominating the regulatory agenda. Ensuring fair, equitable and sustainable outcomes for stakeholders is more important than ever. Through our growing relationships with policymakers and regulators, we are working on several important initiatives. Below is a summary of three areas where we have recently provided comment letters. To see the comprehensive catalogue of our commentary letters, visit us online at cfacanada.org/advocacy.
CSA seeks feedback on proposed frame-work for binding dispute resolution
The Canadian Advocacy Council (CAC) has submitted comments on the Canadian Security Administrators (CSA) Notice and Request for Comment 25-314, outlining a proposed framework granting binding authority to the Ombudsman for Banking Services and Investments (OBSI). The CAC strongly supports enabling binding decisions by OBSI as a critical step in strengthening investor protection but raised concerns about the level of regulatory oversight proposed.
The CAC cautioned that requiring the breadth of proposed CSA approvals and oversight could add unnecessary costs and undermine OBSI’s independence, a key feature for maintaining public trust. Instead, the CAC recommends a more tailored approach, including oversight focused on governance standards and non-objections rather than line-by-line approvals.
The submission also reiterated the CAC’s past calls to raise the OBSI compensation limit from $350,000 (unchanged since 1996) to $500,000 with future cost-of-living adjustments and supported maintaining the current six-year limitations period.
OSC proposes new restrictions on short sellers participating in offerings
The CAC responded to the Ontario Security Commission’s (OSC) consultation on proposed amendments to Rule 48-501 regarding trading during distributions. The letter emphasized a data-driven, targeted approach that aligned with Securities and Exchange Commission (SEC) Rule 105 while being tailored to Canadian market practices (e.g., bought deals and market concentration).
Key highlights from the CAC’s submission include that the CAC:
- Supported the OSC’s targeted, evidence based amendments to Rule 48-501, aligned with SEC Rule 105 and calibrated to Canadian financing practices (e.g., bought deals)
- Affirmed short selling’s important role in liquidity/price formation, while backing a focused restriction to curb offering-related arbitrage with potential for manipulation, with a five-day window and sensible exemptions (including at-the-market offerings and NI 45-106 s.2.42)
- Encouraged ongoing monitoring and better data/transparency in securities lending to support surveillance and future policy development
- Viewed the proposals as a well-calibrated response that addresses identified conduct issues, aligns with established U.S. rules and preserves legitimate trading activity.
CSA NI 31-103 proposes ban on chargebacks to strengthen investor protection
in the distribution of investment fund securities, the CAC expressed strong support. The CAC welcomed the CSA’s proactive stance in addressing the inherent conflicts of interest posed by chargebacks and viewed the amendments as a natural extension of the prior ban on deferred sales charges. The CAC also urged regulators to investigate past use of such structures for potential breaches of client obligations. The CAC emphasized the need for continued regulatory scrutiny of compensation models that may misalign the interests of advisors and clients.
The CAC also suggested extending the ban to non-reporting issuer funds, all investment fund securities and fund-like securities, in coordination with other regulators.
Other letters filed:
- Ontario proposes new capital-raising options for credit unions
- CIRO proposes rule changes to clarify disgorgement authority for mutual fund dealers
- OSC draft Action Plan for Truth and Reconciliation
