In a three-page letter addressed to Barbara Amsden, Managing Director of IIAC, the Canadian Securities Administrators have held out an olive branch. But is it enough?
The biggest change to the CRM2 implementation: Phase two will now be pushed back to the end of 2015 instead of July 15. However, phase three goes ahead as planned on July 15, 2016.
So all’s well in the world? Not so fast.
In December WP reported
that IIAC and its members were specifically concerned about clients being inundated with paper. In addition, the July delivery date for performance reports comes at a time when many are on holidays.
The revised schedule from the CSA doesn’t change this but it does help with some of the outstanding issues for 2015 implementation.
WP reached out to Barbara Amsden for a few quick thoughts on CSA’s decision.
IIAC very much appreciates moving the July 15, 2015, implementation date to the end of the year.
“Clients expect reporting changes to take place at period-ends and many investors meet with their advisors early in the calendar year when clients do much of their financial planning, make RRSP contributions and prepare to do their taxes,” says Amsden. “The adjustment also helps address the delay in finalizing the regulations for 2015: the rules were approved last week.”
They asked for two delays but got one. In any successful negotiation the parties involved usually make concessions. This case was no different.
On the book cost issue it appears IIAC and the CSA agree to disagree.
The CSA feel the current definition is appropriate; any firm wishing to provide tax-adjusted cost information can do so as supplementary information. IIAC feels both should be presented upfront to clients and not at the end of any report. However, Amsden, being very conciliatory, says, “We [IIAC] will work with tax and securities authorities, and with accounting professionals, to address investors’ needs.”
Now, we come to the fly in the ointment.
The July 15, 2016, CRM2 implementation date will not change. IIAC was hoping the final phase, which includes annual performance report and fee report requirements, would be pushed back to the end of 2016. That’s not happening.
On this issue Amsden is also very conciliatory.
“The changes announced by the CSA provide more time in 2015, which is much appreciated, but the overall time allowed remains the same. What this means is that investment dealers that want to provide the calendar-year reports or members think make sense for clients must still be ready to implement six and a half months earlier than the implementation time allowed.”
Translation: System programmers are still going to be facing a time crunch. That’s not going away. However, it does appear they’ve made the July 15, 2016, implementation date a little more palatable in terms of reporting requirements.
Is this IIAC’s ideal solution? No, but it could have been worse.