CSA adopting client reporting requirements

March 28, 2013

The Canadian Securities Administrators today announced the adoption of amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and its Companion Policy that set out requirements for, among other things, client reporting with respect to cost disclosure, investment performance reporting and client statements. As we discussed in an earlier post, the CSA published its initial proposal, which forms part of their Client Relationship Model Project, in June 2011, with revised proposals released in June 2012.

Among other things, the amendments will expand client statements to include additional information, set out a methodology for registrants to use to determine the market value of securities in client reports and require the disclose to clients of such things as the amount of trailing commissions received by a registered firm.

The changes made to the prior version of the proposal are not considered material and the amendments are thus scheduled to take effect on July 15, 2013. Generally, the transition times for the new requirements will span between one and three years. Of particular interest, the CSA have also provided sample reports on charges and other compensation, as well as a sample investment performance report in the appendices of the revised Companion Policy.

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