The Ontario Securities Commission and the Canadian Investment Regulatory Organization are set to conduct a coordinated review of mutual fund sales practices within Canadian bank branches.
The review is a response to a public report released by CBC in March, which revealed that investors may be harmed by supposed high-pressure sales practices for mutual funds at some Canadian banks. In the initial information-gathering phase, the review aims to identify and evaluate the scale of potential concerns through an understanding of the sales culture and environments in Canadian banks.
The first phase of the review will be conducted over the coming months, going into early 2025. The regulators will then proceed based on the results obtained.
In a statement, the OSC encouraged concerned individuals to present additional information or concerns, pointing to its whistleblower program as a shield. The program protects those who flag possible Ontario securities law breaches and offers up to $5 million as a reward for tips that result in enforcement action; it also shields individuals against reprisals, shields whistleblowers’ identities, and maintains the confidentiality of case details.
The OSC also encouraged investors to review the registrations of individuals or companies sharing investment opportunities. The commission pointed to the investor materials provided on its website.
On November 20, the OSC released a notice that it planned to delegate to CIRO the registration function for investment dealers, mutual fund dealers, and the individuals who act on behalf of mutual fund dealers. The OSC highlighted the realignment of some of its functions with those of CIRO as one of its proposed 2025-2026 priorities.
The national self-regulatory organization CIRO manages all investment dealers, mutual fund dealers, and trading activity on the debt and equity marketplaces in Canada.
The OSC also unveiled the “Investing 102: Beyond the basics” course on November 22 as part of its Investing Academy interactive course series.