Protecting Quebec investors - The Quebec CMA Order recommends caution



    MONTREAL, Jan. 31 /CNW Telbec/ - The Ordre des comptables en management
accrédités du Québec (CMA) yesterday presented its brief on protecting Quebec
investors at public hearings held by the Committee on Public Finance of the
National Assembly. Since its members are not associated with the sale of
financial products, the Order was entirely objective in its recommendations.
Protection of the public, which is at the heart of its activities, was the
main motivation for the Order to take part in the search for potential
solutions for problems related to mutual funds. Although it entirely supports
the Committee's objective of ensuring better protection for investors, the
Order recommends extreme caution, in order to avoid compromising the smooth
functioning of an industry that is essential to our economic activity and the
trap of overregulation.
    Where governance is concerned, the Order favors the establishment of an
independent review committee to monitor conflicts of interest, especially
those of a commercial or operational nature, where there is currently a
disturbing absence of relevant securities regulation.
    The exchange of information between the regulatory agencies and police
services is vital to accelerating the investigation process. The recent
legislative amendment that allows the Quebec CA Order to reach agreements with
certain organizations that exercise complementary public protection functions,
especially the Autorité des marchés financiers, seems to be an effective way
to achieve this goal. Moreover, at the appropriate time, once CMAs can
practice public accounting, and to ensure consistency in law and the
protection of the public, the lawmakers ought to allow the Quebec CMA Order to
exchange information as well.
    The Order entirely supports increases in minimum penalties because the
courts currently treat economic crimes as secondary crimes. The desired
dissuasive effect will then be achieved. As for the introduction of new
third-party liability, i.e. for lawyers, accountants, brokers and other
professionals, the Order warns the Committee on Public Finance against the
temptation to recommend stricter legislation. Paralyzing an industry that is
already heavily regulated should be avoided, especially since the current
professional system provides adequate protection of the public.
    Finally, the impacts of separating the functions of manager, promoter,
trustee and principal distributor on the viability of certain small firms and
on access to the market by small companies must be considered. The additional
costs of such a measure will certainly have consequences for small investors.
    The Order also urged the Committee to show caution with respect to
investor compensation. Quebec is already unlike other jurisdictions with its
Fonds d'indemnisation des services financiers, which is sufficient if
incomplete. Improving the compensation programs may reduce the accountability
of both investors and the various participants involved in the management,
promotion and distribution of mutual funds. Not to mention that the costs
associated with a more extensive compensation program would be passed on to
investors, since the yields of the mutual funds would be reduced accordingly.

    The Ordre des comptables en management accrédités du Québec, which has
more than 8,200 members and candidates to the profession, provides leadership
to the CMA profession through the enforcement of high standards and the
recognition of the designation. CMAs create value within organizations through
an integrated and systematic approach to strategic and financial management.




For further information:

For further information: Nathalie Roberge, Coordinator, Media and
Events, Ordre des comptables en management accrédités du Québec, (514)
849-1155 or 1 800-263-5390, ext. 247, n.roberge@cma-quebec.org; Source: Quebec
CMA Order

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Ordre des comptables en management accrédités du Québec (CMA)

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