A common commission practice may not survive this proposal
Canada's securities regulators proposed ending a common advisor pay practice last year, while permanently barring 47 firms and individuals from the capital markets.
On June 26, 2025, the Canadian Securities Administrators published for comment proposed amendments to National Instrument 31-103 that would prohibit chargebacks in the distribution of investment funds sold by prospectus. Chargebacks let a dealing representative collect an upfront commission when a client buys fund securities, then require the representative to repay part of that commission if the client redeems before a set schedule. The CSA said the practice creates a conflict of interest, since the representative benefits financially from keeping the full commission if the client holds the securities past the chargeback period. The CSA has reviewed the comments it received and is evaluating next steps, according to its 2025-2026 Year in Review.
The report's enforcement appendix covers the period from April 1, 2025, to March 31, 2026. CSA members commenced 129 proceedings and concluded 108, spanning illegal distribution, insider trading, market manipulation, disclosure violations and fraud. Regulators ordered $20,676,943 in fines and administrative penalties, plus $59,395,159 in restitution, compensation and disgorgement. Nine asset-freeze orders locked up $31,080,059.02 tied to investigations, six individuals received jail terms totalling 14 years, and CSA members fielded 714 whistleblower tips.
Capital-raising exemptions expanded during the same period. After the CSA raised the capital limits under the listed issuer financing exemption, hundreds of listed issuers used it in the first year to raise almost $4 billion, a pace the report describes as eight times higher than under the previous, lower limits. On September 25, 2025, most CSA members published Multilateral Instrument 45-111 for comment, a proposed self-certified investor prospectus exemption that would let investors who meet certain education or experience criteria put up to $50,000 a year into private businesses without qualifying as accredited investors.
Registration of investment dealers and mutual fund dealers, along with other registrant categories, moved to the Canadian Investment Regulatory Organization under a CSA delegation. On July 15, 2025, the CSA published a consultation on giving the Ombudsman for Banking Services and Investments binding authority over investment disputes, which the report says would require legislative amendments in many CSA jurisdictions.
The full text of the CSA's 2025-2026 Year in Review is available at https://www.securities-administrators.ca/reports/2025-2026-year-in-review/.
