A small investor exclaims and asks “why are regulators not collecting fines for serious violations of securities regulations?”!

This is a brief post on a very important and highly complex issue that cannot be done justice in the space provided.  There are many issues today, in Canada’s financial services industry, where funding for independent research of issues impacting consumers would be of tremendous value to the continuing debate over standards and regulation

Canada’s Small Investor Protection Association (a small non profit organisation that serves as a voice and resource for Canadian investors who have been subjected to financial abuse and/or bad advice by the financial services industry) recently released a report by one of its members on unpaid fines levied by regulators on industry participants but which have not yet been collected.  The report has been discussed in numerous articles, the most detailed of which is found in a piece written by Yvonne Colbert of CBC news.

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Does the disclosure received by retail investors help them to make optimal investment decisions?”

I was happy to attend the Capital Markets Institute’s discussion on disclosure at Toronto’s Rotman School of Management.  But some 3 and a 1/2 hours after the start, the panellists had still not answered the headline topic of discussion: “Does disclosure help investors make optimal investment decisions?”

Outside of the academic presentations by Sunita Sah and an interesting but jocular presentation on behavioural issues affecting choice, focus seemed to be almost entirely on documentation underpinning investment details, costs and performance, i.e. the disclosure of detail. 

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FAIR Canada & IIROC Request for Comments re Client Relationship Model – Phase 2, Performance Reporting and Fee/Charge Disclosure

I would refer people to FAIR Canada’s submission on CRM phase II.  It makes some good points re the following:

A) discount brokerage disclosure,

B) definition of trailing commission,

c) points re the clients not directly paying trailer fees and such charges being for services rendered,

d) short term trading fees and deferred charges, and

e) re requirements to report on investments not defined as securities in legislation.