Canadian Securities Regulators stress the importance of suitability requirements for dealers and advisers

CSA Securities

Toronto – The Canadian Securities Administrators (CSA) today published CSA Staff  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, coordinates and harmonizes regulation for the Canadian capital markets.

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For more information:

CSA member name

Point of contact

Phone number

Autorité des marchés financiers

Sylvain Théberge

514 940-2176

Alberta Securities Commission

Mark Dickey

403 297-4481

British Columbia Securities Commission

Ken Gracey

604 899-6577

Financial Services Regulation Division, Newfoundland and Labrador

Doug Connolly

709 729-2594

Manitoba Securities Commission

Ainsley Cunningham

204 945-4733

New Brunswick Securities Commission

Wendy Connors-Beckett

506 643-7745

Northwest Territories Securities Office

Donn MacDougall

867 920-8984

Nova Scotia Securities Commission

Natalie MacLellan

902 424-8586

Nunavut Securities Office

Louis Arki

867 975-6587

Ontario Securities Commission

Laurie Gillet

416 595-8913

PEI Securities Office, Office of the Attorney General

Janice Callbeck

902 368-6288

Saskatchewan Financial Services Commission

Barbara Shourounis

306 787-5842

Yukon Securities Registry

Fred Pretorius

867 667-5225