Ontario Securities Commission and two other regulators extend blanket orders past November expiration
Order-execution-only (OEO) firms that have enjoyed temporary exemptions from mutual fund trailer bans on their platforms will continue to do so for a little longer at some provinces.
As per a new statement today from the Canadian Securities Administrators (CSA), the Manitoba Securities Commission (MSC), Ontario Securities Commission (OSC) and Autorité des marchés financiers (AMF) are extending local blanket orders that provide temporary exemptions from the OEO trailer ban.
The OEO trailer ban took effect on June 1, 2022 after the CSA’s September 2020 adoption of rules that prohibit fund organizations from paying trailing commissions to dealers who do not make a suitability determination.
“Local blanket orders took effect in all CSA jurisdictions on June 1, 2022, to initiate an investor-centric transition away from mutual fund series with trailing commissions,” the CSA said in today’s statement, adding that the temporary exemptions are meant “to facilitate dealer rebates of trailing commissions to clients holding mutual funds in OEO dealer accounts and process client transfers.”
The MSC, OSC, and AMF’s local blanket orders were set to expire on November 30. But those regulators are extending those orders as a way “to ensure investors are not negatively impacted by the transition to the OEO trailer ban.”
The OSC is extending its blanket order to May 31, 2025. The MSC and AMF, meanwhile, are reserving the authority to revoke their local blanket orders at a future date.
“Other CSA jurisdictions with local blanket orders that expire on November 30, 2023 will also be seeking to extend their blanket orders,” the CSA said.
The CSA is encouraging investors with questions to contact their local regulator and the OEO dealer they’re using.
