Regulatory Alerts2020-12-30
Amendments to Companion Policy 81-105: Mutual Fund Sales Practices
The Canadian Securities Administrators issued amendments to Companion Policy 81-105 to prohibit mutual fund members from paying and participating dealers from accepting trailing commissions when no suitability determination was made for the client. The regulatory body requires that dealers not subject to suitability obligations must be offered a class or series of securities that does not pay trailing commissions. Both parties are expected to maintain robust compliance systems and diligence to ensure adherence to these prohibitions and to verify whether suitability assessments were required.
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