Sleeping Soundly By Dealing With Fee Arrangement Conflicts

Since the CFRs in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations came into effect the other year, firms have been making serious efforts to meet their enhanced conduct obligations. This includes taking reasonable steps to identify existing and reasonably foreseeable material conflicts of interest and to address those conflicts in the best interests of clients. If there is no way to address a material conflict in the best interest of clients using controls, the conflict must be avoided.

Last year, the CSA and CIRO staff (the Regulators) published further guidance outlining their expectations relating to identifying and addressing material conflicts of interest: Joint CSA and CIRO Staff Notice 31-363 (Notice).