Download PDF:
Letter Summary:
We recognize that the OSC has a number of important initiatives underway and limited resources with which to implement such initiatives, and we support a number of the proposals included in the list of priorities for the upcoming fiscal year. As a general comment, we were disappointed that a number of proposals appear to require a lengthy period of time prior to their republication, and would have preferred to see status reports and/or republications of proposed rules by the third quarter of 2014, rather than December or early 2015, particularly with respect to the proposals noted below.
Overview of the Council’s Comments:
We understand that staff’s review of the best interest standard is tied to the CSA’s review of embedded fees in mutual funds, and that an RFP is underway for third party research to determine to what extent, if any, perceived conflicts of interest associated with compensation structures influence advisers. While we are highly supportive of empirical data to support regulatory initiatives, we are concerned about the potential delays that may occur from the initial publication of the CSA Discussion Paper and Request for Comment 81-407 –Mutual Fund Fees, which was published over a year ago, to the completion of the research. The Notice suggests that a staff notice will be published setting out key findings by“early 2015”. Given the importance of the issues raised by both the best interest standard and the mutual fund fees analysis to the investment industry, we urge the OSC to try to work with its counterparts in other jurisdictions to complete their analysis as soon as possible such that new rules, if any, can also be published as early as possible in 2015.