CODE OF ETHICAL BUSINESS CONDUCT

Transcription

1 CODE OF ETHICAL BUSINESS CONDUCT

2 I. Preface The following Code of Ethical Business Practices has been developed and adopted unanimously by the member firms (Members) of the Registered Education Savings Plan Dealers Association of Canada (RESPDAC). This Code concerns each Member s dealings with: The public Potential RESP subscribers Existing and former RESP subscribers Other Members of RESPDAC All other RESP providers Provincial and federal Governments and regulatory agencies This Code reflects the commitment of RESPDAC and its Members to ensure that: a culture of compliance and mutual cooperation exists within each Member; each Member upholds the rules and regulations established by Federal and Provincial Regulators; and each Member is dedicated to serving its subscribers and their families in the most positive and ethical way Members have agreed to abide by this Code in conducting themselves as a firm and have agreed to ensure that their Sales Representatives and other employees and agents also are aware of, and abide by the Code. The Code will be updated as necessary from time to time, and as approved by the Board of Directors. Members will abide by any such updates. 1 March, 2012

3 II. Definitions The Association and RESPDAC mean the RESP Dealers Association of Canada. RESP and Scholarship Plan refer to a group Registered Education Savings Plan, as administered, marketed and sold by Members of RESPDAC. Member means a member firm of the Association, and includes its employees, client service personnel and Sales Representatives across Canada. Client means an existing subscriber (planholder). Prospect means a potential Client, generally identified and initially contacted by a Member s Sales Representative. 2 March, 2012

4 III. Guiding Principles All Members, their employees, agents and Sales Representatives, will adhere to this Code. Members may use the Association logo and report that they are members of the Association. No other firm, person or entity is permitted to use the Association logo and state either directly or indirectly that they are members of the Association. The corporate behaviour of a Member, and that of its employees and agents, including Sales Representatives, reflects on other Members of the Association, and on the integrity of the group RESP industry. Members will at all times deal fairly, honestly and in good faith with Clients, Prospects and the public. Members will at all times act cooperatively and responsibly with other Members of the Association, competitors in the financial services sector, regulatory agencies and other stakeholders in the RESP industry. Members will strive at all times to manage their businesses in compliance with federal and provincial regulations, and participate actively in the development of regulations governing group RESPs and administrative processes. Members will not denigrate any other Members, RESP providers, or financial institutions. Members advertising and promotional statements will be truthful and accurate. Members will not use misleading, deceptive or aggressive methods of client solicitation that demonstrate poor business practice. Members will comply with all training and examination requirements mandated by RESPDAC, including those mandated for Sales Representatives. 3 March, 2012

5 IV. Standards Members Act in Good Faith with Clients Members will deal fairly, honestly and in good faith with Clients. Sales Representatives of Members will also deal fairly, honestly and in good faith with Clients. A Sales Representative will provide objective and impartial information to Clients and Prospects to enable them to make informed decisions about investing in group RESPs. Sales Representatives will make recommendations to Clients and Prospects objectively, impartially and in a professional manner, without considering their own personal interest in any proposed investment, including remuneration that may result from completion of the transaction. Members Act in Good Faith with Each Other As befitting a professional association, Members of RESPDAC will deal fairly, honestly, cooperatively and in good faith with each other, and with other dealers in the RESP industry. Members will not entice or solicit Sales Representatives or other employees from other Members, in an attempt to recruit staff or Sales Representatives. Initial efforts will be made to resolve disagreements and disputes in an informal manner. Members will participate actively and cooperatively in RESPDAC affairs. Compliance with Laws A Member, and any person acting on behalf of the Member, will comply with the laws and regulations governing the business of the Member in each jurisdiction in which they operate. Sales Representatives will be registered, properly trained and in good standing with appropriate regulatory bodies, prior to interacting with Clients or Prospects. A Member and any person acting on behalf of the Member will also adhere to the compliance standards established by that particular Member. Training and Proficiency Competence requires attaining and maintaining an adequate level of abilities, skills and knowledge in the provision of professional services. Sales Representatives of a Member will complete internal training, and study and pass the RESPDAC Sales Representative Proficiency Course, before being registered for trading in Scholarship Plans. The examination is accredited by RESPDAC and authorized by the Canadian Securities Administrators. Sales Representatives will also ensure that they are up to date on product knowledge, and current market and regulatory requirements. 4 March, 2012

6 Supervision and Supervisory Proficiency A Member s supervisory personnel, including its senior officers and managers, both corporately and in field branch offices, will make employees and Sales Representatives under their supervision aware of and comply with this Code as well as with the laws, regulations, guidelines and compliance standards related to their specific activities. A Member s supervisory personnel who have been designated by the Member as responsible under securities laws for supervising the activities of Sales Representatives will take the RESPDAC Branch Manager Proficiency Course and achieve a passing grade on the examination, prior to taking on these roles for the Member. Members will monitor that their other employees and agents, and outside service providers whom they may engage, comply with this Code. Corporate Responsibility A Member is responsible for the acts and omissions of its Sales Representatives, other employees and agents engaged in carrying out its business. Conflicts of Interest A Member must be aware of the possibility of conflicts of interest arising between the interests of the Member or its Sales Representative, and the interests of a Client or Prospect. Members will seek to avoid any conflict of interest; however, if and when a Member or a Sales Representative becomes aware of any conflict or potential conflict of interest, he or she will immediately disclose such conflict or potential conflict of interest to the appropriate supervisor or senior management of the Member, and the Member will take appropriate action to manage such conflict in the Client s or Prospect s interest. Any conflict or potential conflict of interest that arises will be disclosed in writing to a Client or Prospect by the Member, or by the Sales Representative as directed by the Member, as soon as practically possible and in any event, prior to the Member or Sales Representative proceeding with any proposed transaction involving the Client or the Prospect. 5 March, 2012

7 V. Approaching Prospects/Clients Privacy A Member and its Sales Representatives will not be intrusive when dealing with Clients or Prospects. The right of a Client or Prospect to refuse further discussion or interaction with the Member or its Sales Representatives will be scrupulously respected. Members and its Sales Representatives will only contact Clients or Prospects during reasonable hours, and in appropriate locations. Telephone Solicitation Members will conduct their sales activities in accordance with applicable legislation including the Competition Act (Canada) (Bill C-20), the Telecommunications Act (Canada) (Bill C-37), Personal Information and Electronic Documents Act (PIPEDA) and applicable provincial privacy legislation. Members will comply with the national Do Not Call regulation and will ensure that their Sales Representatives also comply with that regulation. Members will not make false or misleading statements to Clients or Prospects. A Member or a Sales Representative will provide fair and reasonable disclosure at the beginning of each telephone communication with a Client or Prospect which includes the identity and role of the person and the Member on whose behalf the phone call is being made. Gifts Members will not promise any free gifts or benefits if a Client invests in a Group RESP, other than those of a nominal value. Advertising All representations made in Members advertisements will be truthful, balanced, clearly written and not misleading. The factual basis for claims, including performance claims, will be made available to the Client or Prospect upon request. All claims will be based on supportable facts and consistent with the disclosure contained in the prospectus of the particular Group RESP. No advertisement will contain false or exaggerated statements or misrepresentations. No advertisement will contain guarantees regarding income, yield, investment returns, risk or future values. Past performance of a Group RESP will be calculated in accordance with applicable securities regulatory requirements. 6 March, 2012

8 VI. Presenting to Prospects/Clients Disclosure A Member will provide full, true and plain disclosure to Clients and Prospects in presenting information about a Group RESP at all times. Disclosure will be consistent with the information contained in the most recent financial statements, Management Reports of Fund Performance and the prospectus of the applicable Group RESP. Members will deliver the most current approved Prospectus prior to or at the time that a Client enters into an agreement to invest in a Group RESP. Members will accurately and completely describe the fees that are payable by the Client before the Client completes his or her contract to invest in a Group RESP. In particular, the enrolment fees will be brought to the attention of the Client, along with the implications for the Client if he or she prematurely terminates the contract. Accuracy of Information Members will not, in the course of a sales presentation, or completion of the sales contract with any Client or Prospect, make any statement or take any measures which, directly or by implication, omission, ambiguity or exaggeration, would have the reasonable potential of misleading the Client or Prospect about the terms of the investment. A Sales Representative will not commit to a future value for the Group RESP being invested in, nor hold out enticements, which may cause a Client or Prospect to invest beyond their financial capability. Jurisdiction A Member will advertise services and Group RESPs offered by the Member only in those provinces and territories where the Member and the Group RESP are authorized to so distribute and offer that Group RESP. A Sales Representative will not carry out any dealing or trading activity in a province where he or she is not registered as a Sales Representative. Suitability/Know Your Client A Member will determine the general investment knowledge, investment needs, financial circumstances, affordability and objectives of each Client and ensure that every recommendation and proposed investment is appropriate and suitable for the Client. The persons responsible for supervising trades made by a Member s Sales Representatives will review the information about the Client collected by the Sales Representatives. The Member will maintain records of this information. 7 March, 2012

9 Expectations A Sales Representative will endeavour to ensure that a Client understands what the Sales Representative and the Member will provide in any transaction, as well as their ongoing relationship once the Client enters into an agreement for a Group RESP. 8 March, 2012

10 VII. Post-Contract Transferring of Business A transfer by a Client out of one Member s Group RESP to another Member s Group RESP, where the Client has been enrolled for more than 60 days in the first Member s Group RESP, may not be in the best interests of the Client, given the potential for forfeiture of the fees paid by the Client, and accrued interest. Accordingly, a Member and its Sales Representatives will not encourage the transfer of a Client s business from one Member to another Member. If a Client decides to transfer from one Group RESP to another Group RESP, the receiving Member will require the Client to acknowledge in writing the financial implications of such transfer, using the Plan Transfer Disclosure Form endorsed by RESPDAC, a signed copy of which will be provided to the sending Member. In addition, the receiving Member will ensure that the Client fully understands the implications and costs of such transfer before entering into an agreement to so transfer. Confidentiality Members will treat all personal information of Clients as confidential, applying proper safeguards to protect this confidentiality. Members will maintain tight control over access to Client information. A Member will not disclose a Client s personal or confidential information, except with the Client s written consent, or in accordance with applicable laws; and will not use that information to the detriment of the Client or to obtain advantage for themselves or for another person. A Member will develop and maintain written policies and procedures relating to confidentiality and the protection of Client information. Claims about Competitors A Member and its Sales Representatives will not, directly or indirectly, make comments of any kind which are false, misleading, inaccurate or incomplete about another Sales Representative, another Member or any other organization, product, or service. A Member will be objective and fair in any discussion of any competitors, their Sales Representatives or their competing products, and will not make derogatory statements. A Member will present balanced and accurate information. 9 March, 2012

11 The Sales Representatives of a Member will only use written product information about the Group RESP published or approved by the Member, when discussing the RESPs of the Member or of any competitor. 10 March, 2012

12 VIII. Failure To Comply With This Code Responsibility All employees, Sales Representatives or officers of a Member have a duty to report to the Member s Compliance Department any contravention of this Code of which they become aware, and to co-operate with senior management of the Member in the investigation of possible breaches of the Code. Any perceived breaches of this Code, together with all supporting information, will be reported to the Compliance Officer of the Member. Members in breach will rectify breaches of this Code as quickly as possible, and where required or appropriate, notify any organization to which it reported such breach, about the action taken as appropriate. Consequences The failure of a Member or any of its employees or Sales Representatives to comply with this Code may result in the Company s suspension or expulsion from the Association. Failure to comply with certain sections of this Code may also be a violation of securities laws and may subject the Member and its Sales Representatives to applicable enforcement action and penalties. It is expected, however, that no serious breaches of this Code will occur that would warrant suspension or expulsion, and that the collegial and cooperative manner that has been the hallmark of RESPDAC will continue to be applied to all matters of mutual interest, competition and/or disagreement. 11 March, 2012