Call grows for ‘one’ fiduciary standard

Regulators in the U.S. need to get on with the task of standardizing fiduciary standard, said SEC Chair Mary Jo White Monday – provoking a call for something similar in Canada.

Call grows for ‘one’ fiduciary standard
Regulators in the U.S. need to get on with the task of standardizing fiduciary standard, said SEC Chair Mary Jo White Monday – provoking a call for something similar in Canada.

“I think the same issue exists for the OSC, especially when you see a weakened OBSI, which adds to investor woes and what we’ve seen with demographics amongst seniors,” industry critic Ken Kivenko, president and CEO of Kenmar Associates. “Either an enhanced mandate or an investor restitution fund is needed to protect investors from commission-based sales people.”

His comments come as some provincial regulators are analyzing a move to join forces to form a national committee in charge of overseeing the protection of investors, especially seniors depending heavily on retirement funds.

They also come as some in the industry fear a number of advisors will seek to sidestep CRM regulations by focusing on selling segregated funds. That’s also as the OSC’s Statement of Priorities report sparks debate around what the regulator will do to continue moving toward fiduciary duty standards.

The call for national uniformity in the States has now been extended to the treatment of those investors touched by fraud.

#pb#

In the US, billions of dollars have been paid by financial companies in regulatory and legal settlements, but very little money actually finds the pockets of investors in cases brought to the Justice Department.

The SEC however, is collecting penalties and other gains from institutions and individuals.

“Sometimes the SEC puts the dollars it collects into a fund to be distributed to a class of victims the agency has identified; other times it forces defendants to repay those investors directly,” according to an article in the New York Times.

The SEC says it tries, whenever possible, to extract money from wrongdoers on behalf of investors. And an analysis of financial crisis lawsuits cited most recently on the S.E.C.’s website shows that 23 of them generated nearly $2.6-billion for investors, according to the piece.

Kivenko feels the OSC should do the same, and the regulator responded Thursday, saying the “OSC develops and evaluates regulatory provisions to create a best interest duty.”

“There’s been no agreement on implementing standards,” he said. “Most of the provincial bodies are on the fence and you have to wonder how they’ll come together on issues like this when the national body is finally formed.”

LATEST NEWS