AMF keenly interested in work of parliamentary committee on protection of investors


Montréal – On the eve of the public hearings held by the Committee on Public Finance in connection with its initiative mandate related to the protection of investors, the Autorité des marchés financiers (AMF) wishes to stress once again its full co-operation. “We are keenly interested in the Committee’s initiative mandate related to the protection of investors. As an agency charged with overseeing the financial markets, the AMF focuses on this matter on a daily basis. We therefore hope to raise awareness among parliamentarians and the general public about measures that have been taken and those being planned to enhance investor protection,” noted AMF President and CEO Jean St-Gelais.

Through the brief it forwarded to the Committee Chair and the presentation that Mr. St-Gelais will be giving on February 7, 2007, the AMF seeks to contribute to discussions on the matter. Mr. St-Gelais therefore plans to remind parliamentarians of the measures that have been taken to improve the regulation and oversight of mutual funds. They include:

  • the coming into force of a regulation that requires the establishment of an independent review committee by mutual funds for the purpose of supervising all conflict of interest situations and ensuring that the manager is operating in the best interest of investors;
  • adoption by the National Assembly of Bill 7 to facilitate the exchange of information among the AMF, the Ordre des comptables agréés du Québec and the Canadian Public Accountability Board;
  • adoption by the National Assembly of Bill 29 setting out in particular provisions to enhance the oversight of mutual funds and management, more specifically by defining fund managers and assigning them obligations related to compliance, diligence and honesty;
  • improving specific mutual fund controls and monitoring such as reconciliation of assets held with custodians and integration with the Continuous Disclosure Review Program (CDR Program);
  • expanding and strengthening teams dedicated to market surveillance.

Mr. St-Gelais will use the opportunity to discuss regulations currently proposed by the Canadian Securities Administrators (CSA) that have an impact on mutual funds, such as the regulation respecting registration reform that sets out a registration requirement for fund managers and compliance programs.

In addition, Mr. St-Gelais plans to present a number of recommendations, some of which require legislative amendments, such as the implementation of a new liability regime governing the disclosure of information on the secondary market to enhance the right of investors to launch proceedings against companies that make misrepresentations.

As well, the AMF will be recommending stricter penalties, via greater awareness among court officials, and legislative amendments intended to increase minimum penalties. “It is unacceptable for perpetrators of fraud to believe that they can have an easy ride in Québec. Economic crimes are just as detrimental to society as are other types of crime, and they should be regarded with equal severity. The message must be clear: Persons who commit economic crimes will be severely punished,” added Mr. St-Gelais.

Finally, the AMF hopes the Committee will identify the issues related to compensation paid to the victims of financial market fraud following the recent scandals.

“The AMF is not the only agency charged with suppressing financial market crime. It is important to mobilize all parties assigned to uncovering and suppressing economic crimes, including court officials and lawyers, for the purpose of launching concerted action supported by regulations that are adapted to our needs and strictly enforced,” concluded Mr. St-Gelais.

The brief filed by the AMF (in French only) is available on the AMF website.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.

— 30 —


Media only:
Frédéric Alberro (514) 940-2176
Issuers, dealers, advisers and representatives: (877) 525-0337, choose option 9 for English, then 1 for industry
Consumers and investors: (877) 525-0337, choose option 9 for English, then 8 for consumers