Securities Law & Instruments
NOTICE FOR MULTILATERAL INSTRUMENT 33-107
NOTICE OF REQUEST BY MINISTER OF FINANCE FOR FURTHER CONSIDERATION
Multilateral Instrument 33-107, "Proficiency Requirements for Registrants Holding Themselves out as Providing Financial Planning and Similar Advice"
On February 9, 2001, the Commission delivered Multilateral Instrument ("the instrument) 33-107, "Proficiency Requirements for Registrants Holding Themselves Out as Providing Financial Planning and Similar Advice" to the Minister under section 143.3 of the Securities Act (Ontario).
On April 6, 2001 the Minister returned the Instrument to the Commission for further consideration of the balance struck in the Rule between compliance costs and investor protection. The Minister expressed support for the Commission's work towards creating a high, uniform proficiency standard for financial planning advice to better protect consumers and investors.
The Commission believes that there should be clarity, transparency and competence in the financial services offered by product vendors to consumers who entrust them with their retirement savings. The Commission believes that this will be achieved in part by attaching proficiency requirements to the use of titles by individuals licensed to sell financial products. These titles convey the impression that objective, comprehensive, integrated financial advice is being provided that is tailored to the customer's present and future financial circumstances. By the same token, registered firms should not be able to hold themselves out under the equivalent business titles or by using equivalent service descriptions, unless the financial planning advice is provided to customers by qualified individuals.
OSC staff propose to engage in a round of consultations with interested parties to explore concerns regarding the clarity and scope of the title and service description word pools and the two year experience requirement. The anticipated effective date of the Instrument remains February 15, 2002. The Commission hopes to publish a revised version of the Instrument for comment at the beginning of June. The Financial Services Commission of Ontario ("FSCO") will recommend to the Minister the adoption of a regulation in respect of agents licensed under the Insurance Act similar in substance to the Instrument for consideration at the same time as the revised Instrument.
The Commission is encouraged that the securities, mutual funds, insurance and banking industries continue to support the proficiency standard and a national exam. Representatives of the IDA, IFIC, CAIFA, and CBA have been working cooperatively to put in place a governance structure and common administrative and operational procedures to administer a national exam. The industry is preparing to deliver the FPPE across Canada twice in late 2001 to allow registrants and licensees to meet the proficiency requirements before the proposed February 15, 2002 implementation date of the Instrument.
The Commission will continue to demonstrate leadership in the implementation of the Rule and will encourage other securities and insurance regulators through the Canadian Securities Administrators and the Joint Forum of Financial Market Regulators to implement the amended Instrument. The Commission is publishing this Notice in accordance with subsection 143.6 of the Act.
For further information contact:
Chair, CSA Financial Planning Committee
Ontario Securities Commission
Special Adviser, Domestic Policy
Ontario Securities Commission