2014 Compliance Reviews

Transcription

1 2014 Compliance Reviews PMAC Compliance Officers Network Meeting December 9, 2014 David Palumbo Baker & McKenzie LLP, an Ontario limited liability partnership, is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm Baker & McKenzie LLP

2 Compliance Review Issues and Suggestions Preparing for a Compliance Review Resources Overview

3 The usual The comments and content contained herein provides a general summary and overview and should not be regarded or relied upon as legal advice or opinions applicable to your particular circumstances. 2014, Baker & McKenzie LLP 2014 Baker & McKenzie LLP 3

4 Regulatory Reviews/Guidance CSA Staff Notice OSC Staff Notice OSC Staff Notice (previous year but same issues) 2014 Baker & McKenzie LLP 4

5 Ongoing Monitoring and Initiatives Continuing KYC, KYP and Suitability issues among most fundamental obligations owed will remain a focus July 2014 Risk Assessment Questionnaire Reviewing data gathered from RAQ and plans to begin on-site reviews based on the data by end of year 2014 Baker & McKenzie LLP 5

6 Ongoing Monitoring and Initiatives Best Interest Standard continuing to work with the research gathered intend to publish results and next steps/timing Contacting of Clients continuing to contact investors as part of normal course reviews Mystery Shops Statement of Priorities for the year Expect to publish guidance on good, bad and ugly 2014 Baker & McKenzie LLP 6

7 Reviews - PMs Repeated deficiencies Delegating KYC and suitability obligations to others Inadequate supervision of advising reps and research analysts Inadequate investment management agreements Practices regarding account statements 2014 Baker & McKenzie LLP 7

8 PMs Movement Between Firms Marketing the performance of PMs while at previous firm limited circumstances where it may be appropriate guidance from CSA Staff Notice Baker & McKenzie LLP 8

9 Reviews - IFMs Repeated deficiencies Issues with sales practices Types of expenses charged to funds Inadequate oversight of outsourced functions and service providers Issues with Net Asset Value adjustments Issues with sales practices and business promotion Issues with organizational structure 2014 Baker & McKenzie LLP 9

10 Reviews All Registrants Compliance with sections 11.9 or of NI Issues with KYC, KYP and suitability requirements CSA Staff Notice January 2014 Client Alert in materials Overview Issues with PPMs Issues with insurance Inadequate annual compliance reports Inaccurate calculations of of EWC or insufficient WC 2014 Baker & McKenzie LLP 10

11 Preparing for a Compliance Review Five types of Compliance Reviews: 1. Full 2. Targeted 3. New Registrants 4. Impact 5. Cause 2014 Baker & McKenzie LLP 11

12 Preparing for a Compliance Review Perform a self-assessment Organization Review your RAQ and any prior review reports Be prepared for that initial meeting 2014 Baker & McKenzie LLP 12

13 OSC Registrant Outreach Program Launched in July 2013 Web page of resources, seminars, topical guides attendees in-person or via webinars Remember, with greater resources comes 2014 Baker & McKenzie LLP 13

14 Upcoming Registrant Outreach Sessions Ongoing Amendments to NI February 4 2:00-4:00pm (Webinar) February 5 2:00-4:00pm (In Person) CRM2 Implementation April 21 2:00-4:00pm (Webinar) April 23 2:00-4:00pm (In Person) Elements of an Effective Compliance System June 23 2:00-4:00pm (Webinar) June 25 2:00-4:00pm (In Person) 2014 Baker & McKenzie LLP 14

15 Investment Funds and Asset Management Contact Us: Baker & McKenzie LLP, an Ontario limited liability partnership, is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm Baker & McKenzie LLP