Canadian Securities Regulators Stress the Importance of Suitability Requirements for Dealers and Advisers



    TORONTO, Sept. 2 /CNW/ - The Canadian Securities Administrators (CSA)
today published CSA Staff Notice 33-315 Suitability Obligation and Know Your
Product that reminds dealers and advisers of their duty to satisfy their
suitability obligations to clients, which includes the requirement to fully
understand the products they recommend to clients.
    In order to meet their obligation to their clients, anyone selling or
advising in securities must determine whether a purchase or sale of a security
recommended to an investor is suitable for the investor. Dealers and advisers
have an obligation to understand the general investment needs and objectives
of their client ("know your client"), as well as the attributes and associated
risks of the products they are recommending to clients (referred to as "know
your product").
    "Both individual representatives and firms owe a duty to their clients to
ensure the suitability of investment products and we expect dealers and
advisers to carefully consider product attributes and the investment
objectives of their client before recommending any product," said Jean
St-Gelais, CSA Chair and President & Chief Executive Officer of the Autorité
des marchés financiers. "Any registrant that does not meet these obligations
is in breach of securities law."
    Canadian regulators require that dealing and advising representatives
understand the structure and features of each investment product they
recommend, including costs, risks and financial position and reputation of the
issuer and other parties involved in key aspects of the product. They should
explain the risks of products they are recommending to clients and must
determine the suitability of each transaction for a client. Additionally,
firms should have a product review process in place that includes procedures
for identifying, reviewing and approving (or rejecting) new products and for
monitoring existing products for significant changes to those products.
    CSA Staff Notice 33-315 Suitability Obligation and Know Your Product is
available on various CSA members' websites.
    The CSA, the council of the securities regulators of Canada's provinces
and territories, co-ordinates and harmonizes regulation for the Canadian
capital markets.





For further information:

For further information: Laurie Gillett, Ontario Securities Commission,
(416) 595-8913; Sylvain Théberge, Autorité des marchés financiers, (514)
940-2176; Mark Dickey, Alberta Securities Commission, (403) 297-4481; Ken
Gracey, British Columbia Securities Commission, (604) 899-6577; Ainsley
Cunningham, Manitoba Securities Commission, (204) 945-4733; Wendy
Connors-Beckett, New Brunswick Securities Commission, (506) 643-7745; Natalie
MacLellan, Nova Scotia Securities Commission, (902) 424-8586; Barbara
Shourounis, Saskatchewan Financial Services Commission, (306) 787-5842; Janice
Callbeck, PEI Securities Office, Office of the Attorney General, (902)
368-6288; Doug Connolly, Financial Services Regulation Div., Newfoundland and
Labrador, (709) 729-2594; Fred Pretorius, Yukon Securities Registry, (867)
667-5225; Louis Arki, Nunavut Securities Office, (867) 975-6587; Donn
MacDougall, Northwest Territories Securities Office, (867) 920-8984


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