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Originally published: May 5, 2016
Debra Foubert is the Director of the Ontario Securities Commission’s (OSC) Compliance and Registrant Regulation Branch, the operating branch that led the development at the OSC of the recent Canadian Securities Administrators consultation paper, Proposals to Enhance the Obligations of Advisers, Dealers and Representatives Toward Their Clients. Debra spoke with the Investor Office about her background, the consultation paper and how her team is working to improve the relationship between investors and their advisors.
I’ve been with the OSC since October 2012. Prior to joining the OSC I worked in the Compliance department at a large Canadian financial institution. Throughout my career, I have been fortunate to work in the securities industry as both a regulator and compliance professional in Canada and the United States.
Over my career, I’ve seen the compliance functions of the industry develop into a profession. The roles and responsibilities for a firm’s compliance department have become much more important over the years.
On the role of the Compliance and Registrant Regulation Branch…
Financial advisors in Ontario are obligated to deal with their clients in a way that’s fair and honest; this is essential in order for investors to have confidence in the province’s capital markets. The Compliance and Registrant Regulation Branch is responsible for overseeing how advisors meet their obligations.
We provide oversight and guidance to advisors through compliance reviews, staff notices and outreach sessions, and by having this type of open communication with advisors we’re able to develop new tools that help them maintain effective compliance systems.
There is also a policy component to our work, where we participate in developing policies that impact the relationship between investors and their advisors.
On the consultation paper…
The Canadian Securities Administrators (CSA) – which is an umbrella organization that includes all provincial and territorial securities regulators in Canada, including the OSC – are currently seeking comment on proposed regulatory changes that are designed to improve and better define the relationship between investors and their advisors, as well as enhance the obligations that advisors have toward their clients. All Canadian securities regulators have agreed to consult on the proposed set of regulatory changes that would work together to better align the interests of advisors and their clients.
The OSC, along with most of the other CSA jurisdictions, is also consulting on a regulatory best interest standard in addition to the proposed regulatory changes. This standard would form both an over-arching standard and a governing principle against which all other client-related obligations would be interpreted. It’s really the practice of saying, “whatever activity is done, is it in the best interest of the client?”
On the importance of a best interest standard…
Canadians are increasingly responsible for their own financial destiny. More people than ever are required to manage saving for their own retirement, and they’re doing so in an increasingly complex market. By proposing a best interest standard, we’re trying to provide better outcomes for investors by helping them get the best advice for their needs. We’re saying that investors deserve a marketplace that puts their interests first and helps them achieve their financial goals. Whatever those goals are – saving for retirement, saving for their children’s education – having access to better advice will help them achieve those goals.
On consulting stakeholders…
The OSC believes that investors deserve a best interest standard, and we are undertaking a fulsome consultation and discussion process in order to deliver a strong recommendation after the consultation process is complete. We will be seeking comments from investors, industry participants and other stakeholders in order to help us make a decision on this matter.
On investor input…
We want to hear from investors on this proposal, so we encourage investors to write to us and give us their opinions. Their input matters and will help us make a decision about these proposed regulatory changes and the best interest standard. We plan to offer many opportunities for investors to share their thoughts with us throughout the coming months; keep an eye out for consultation opportunities listed in future issues of Investor News.