Regulators to proceed with ‘best interest’ standard
TORONTO Canada’s largest capital markets regulator is determined to go-it-alone in introducing a best interest standard to govern the relationship between investment advisers and the clients.
The Ontario Securities Commission will have the support of its counterpart in New Brunswick, but all other provinces are concerned about or have abandoned even studying the higher standard being adopted in comparable jurisdictions such as Australia and the United Kingdom.
Grant Vingoe, OSC vice-chair, said Thursday that the regulator is determined to push ahead with the best interest standard, even as it simultaneously pursues “targeted reforms” aimed at boosting standards alongside regulators in Alberta, Quebec, British Columbia and Manitoba that have abandoned the increasingly accepted global standard.
“We continue to believe a best interest standard is necessary to protect investors and fulfil our mandate, and we’re prepared to move forward with this.”
Outgoing OSC chairman Howard Wetston first raised the possibility of Ontario going it alone with a best interest standard in late 2015.
Since then, market watchers have questioned how the relationship between investment advisers and their clients can be governed given the provincial differences.
But Vingoe said he believes Ontario will be able to pull it off, given the size of the investment community in the province. He said he is also planning to seek assistance from national self-regulatory agencies such as the Investment Industry Regulatory Organization of Canada.
Vingoe said the OSC will publish a consultation paper by the spring of 2018, laying out how the best interest standard would work.
“At this point, it’s how to implement it,” he said, adding that he hopes the national self-regulatory will embrace the best interest standard and help extend its reach.