BCSC Compliance Report Card shines spotlight on investment firms' marketing deficiencies
VANCOUVER, BC, April 26, 2022 /CNW/ - The British Columbia Securities Commission (BCSC)'s latest Compliance Report Card of investment dealers and advisers, released today, reflects the past year's focus on marketing materials these firms use to attract and retain clients.
The Report Card highlights several recurring deficiencies in how some B.C.-based portfolio managers, investment fund managers and exempt market dealers hold themselves out to the public, including:
- Posting information and marketing materials that are no longer current
- Unsubstantiated and/or overly promotional claims
- Failure to provide references and sources for third-party information used in marketing materials
- Social media posts that have misleading or overly promotional claims and statements.
The focus on marketing in 2021 was part of a national effort, coordinated by the Canadian Securities Administrators, of which the BCSC is a member.
"We expect registered firms to ensure their marketing is done responsibly," said Peter Brady, the BCSC's Executive Director. "Our goal is to identify problems and make sure they get addressed before issues arise."
In 2021, the BCSC conducted 31 compliance reviews and found 210 deficiencies, averaging 6.77 deficiencies per review. This is down from an average of 8.14 deficiencies per review in the previous year, in large part due to the narrower focus on marketing.
The reviews also revealed that some firms are falling short of requirements to Know Your Client (KYC) and their obligation to determine the suitability of investments for each client.
Some firms that recently registered, following the repeal of the Mortgage Investment Entity (MIE) registration exemption, are falling short in certain areas. For example, some of them didn't get KYC information from clients who predated the firm's registration.
Some of the deficiencies, either in marketing or other areas, were significant failures of compliance that led the BCSC to impose terms and conditions on registration, such as requiring the hiring of a compliance monitor or preventing new clients from being onboarded until the failures have been corrected. The BCSC put restrictions on several registered firms this year. In addition, several cases were referred to the BCSC's Enforcement Division for further investigation, which could lead to public allegations of misconduct, a hearing and possible sanctions. This year, the BCSC has made settlements with several firms based on poor registrant conduct, as well as imposing sanctions on individuals for registration matters.
The BCSC is the principal regulator for about 161 adviser and dealer firms, and takes a risk-based approach in examining firms.
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission
Media Contact: Elise Palmer, 604-899-6830; Public inquiries: 604-899-6854 or 1-800-373-6393 (toll free), [email protected]
Partager cet article