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There are new regulations being introduced and implemented across the Canadian investment industry called the Client Relationship Model, Phase 2 (CRM2). As part of this process, we are committed to ensuring investors are aware of what these regulations are and what impact they will have on individuals, as well as on the industry as a whole.

What is CRM2?

CRM2 is a set of new industry-wide regulations developed by the Canadian Securities Administrators (CSA). The main purpose of these regulations is to improve how the financial industry reports and discloses information to investors.

Who does CRM2 apply to?

CRM2 applies to all investment dealers and advisors across the country, including those regulated by the Investment Industry Regulatory Organization of Canada (IIROC), the Mutual Fund Dealers Association (MFDA) and provincial securities commissions in Canada.

Why are these regulations being introduced?

The driving force behind CRM2 is to enhance the transparency in the investment industry as a whole in regards to both account costs and performance. These regulations are part of a global shift to help investors become better informed about their accounts and to improve their ability to assess and track progress towards their particular financial goals.

How will CRM2 affect you?

First and foremost, it’s important to understand that the introduction of these new regulations will not affect the costs you are paying as an investor. The main impact is additional information that investors will receive about their accounts through two channels: conversations with their advisors, and the two new annual reports on all investment accounts.

New Reports

  1. Annual Charges and Compensation Report: This report shows a detailed list of account fees.
  2. Investment Performance Report: This report provides specific information about how the account is performing, using a “money-weighted” rate of return.

It’s important to note that in regards to the reports, regulators have required that investors receive separate documents for each account they hold. As such, individuals should expect to receive multiple reports.

When will these changes take effect?

The rules associated with the new reports came into effect this past July, and are currently being phased in. Full implementation will take place by early 2017.

Do you have more questions?

As part of our ongoing support for the implementation of CRM2, we are dedicated to helping investors understand these new changes. Please contact your professional advisor to inquire about our supplementary fact sheets that address key questions many investors have regarding the regulations and specific aspects of the reports.