Overview
As we noted in our response to the 2021 Consultation on this Draft Regulation (2021 response), PMAC’s mission statement is “advancing standards”; we are consistently supportive of measures that elevate standards in the industry and improve investor protection. We encourage the harmonization of regulatory requirements for asset managers across Canada and internationally where possible, and discourage requirements that impose duplicative and/or conflicting obligations.
PMAC supports the AMF’s goal of ensuring the fair processing of consumer complaints in the financial sector and of imposing standards for investor complaints across different types of firms. It is clear that the AMF took stakeholder feedback into account and, as a result, made substantial changes to the Draft Regulation. We appreciate this approach and agree with many of the revisions.
While we appreciate that the AMF has added flexibility to the Draft Regulation with respect to the policy and procedural requirements and timelines, the Draft Regulation will nonetheless impose additional compliance burden and costs, especially for smaller firms, without a corresponding investor benefit. We have detailed our key recommendations and concerns below.
Key Recommendations
Our key recommendations are as follows:
- Exclude PMs from the Draft Regulation: While the revised Draft Regulation is less prescriptive than the original proposal, it nonetheless remains onerous, and we still do not understand why the regulation is necessary for PM firms. There is nothing to indicate that the existing complaint handling regime set out in the Securities Act (Quebec) (Act) is not working well for PM firms and their clients. We do not believe that a “one-size-fits-all” model for the entire financial sector is in the best interests of the clients of PM firms. We request that PMs be excluded from the Draft Regulation.
- Exclude non-individual permitted clients and other institutional investors from the Draft Regulation: The process and timelines set out in the Draft Regulation are not appropriate for non-individual permitted clients and institutional investors. These investors have a variety of arrangements with their advisers which may require a more specialized approach to complaint management. These investors also have the sophistication and means to pursue other forms of dispute resolution. They may prefer to use alternate means to do so. Excluding non-individual permitted clients and other institutional investors from the regulation would be consistent with National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).
- Alternatively, harmonize the Draft Regulation with the complaint resolution requirements in NI 31-103: If no exclusion is given to PMs, the Draft Regulation will cause significant additional compliance burden, as a result of the differences between the proposed complaint handling regime and the existing regimes under NI 31-103, the Act, and Ombudsman for Banking Services and Investments (OBSI). Examples of these differences include the proposed 60-day response period, the proposed broadened definition of “complaint”, the requirement to appoint a responsible person and to adopt specific detailed policies and procedures, the requirements to acknowledge receipt of the complaint in addition to other response requirements, to transfer the file to the complaint handling department within 10 days, to record all dissatisfactions, the expanded timeframe for the complainant to respond to a complaint, the on-going obligation to communicate with the complainant, and the expanded record retention period. Imposing these new requirements will cause additional burden for firms across Canada that have clients in Quebec, whether or not they are principally regulated by the AMF. PMAC does not believe that there is any additional investor protection policy reason to deviate from the existing complaint handling regime.
Click here to view the submission in English.
Click here to view the submission in French.
