Ongoing regulatory changes in the financials sector don’t tend to get much press, but they do have a significant and widespread impact on our industry. Read on to learn how you might be impacted by the actions of our country’s many regulators over the coming months and years.
Deferred sales charges fade into obscurity
The elimination of deferred sales charges (“DSC”) has been a popular topic in the Canadian financial services industry over the past couple of years. While the Government of Ontario voted against eliminating DSCs, many firms have already eliminated DSC options in their fund lineups. We expect the firm-led end of DSC to continue in 2019 and beyond.
The rise of liquid alts
Liquid alternatives (“liquid alts”) have been on regulators’ agendas for years. After multiple reviews and comment periods, liquid alts are today considered an asset class of mutual funds and ETFs.
Similar to what occurred in the U.S. and Europe when liquid alts were introduced into those markets, liquid alts will be a game changer for the Canadian hedge fund, mutual fund and ETF industries. Many firms launched liquid alt funds ahead of the official release date and we expect many more liquid alts to be launched in 2019.
The CSA Regulatory Sandbox makes waves
The Canadian Securities Administrators (“CSA”) is dedicated to fostering innovation and advice in financial services technologies. To meet this priority, the CSA has launched the CSA Regulatory Sandbox.
Whether they are a start-up or they are already a large corporation, firms can now get exemptive relief from securities laws if they are taking steps to innovate and enhance Canadian payment systems, creating innovations in open banking, and/or making Canada competitive in the field of financial services disruption.
While 2019 may not be the busiest year for our regulators, their efforts to shape the Canadian financial services industry will definitely continue for many years to come.