Institute Comments on Proposed Canadian Soft Dollar RegulationsWashington, DC, October 19, 2006 - ICI expressed measured support for a Canadian initiative on soft dollars and the permissible uses of client brokerage commissions, in a letter to the Canadian Securities Administrators (CSA). The letter responds to the CSA's proposed National Instrument on the "Use of Client Brokerage Commissions as Payment for Order Execution Services or Research (`Soft Dollar' Arrangements)." ICI Position The Institute's letter expresses measured support for the proposal, encouraging the CSA to coordinate with the SEC to achieve a measure of consistency in regulatory approaches that will not disadvantage firms that operate in both the U.S. and Canadian markets. The letter also applauds the CSA for providing a level playing field for mutual funds and other investment products by requiring that all investment advisers comply with the provisions of the proposed National Instrument regardless of the type of client account involved. The Institute conditions its support, however, on several important clarifications: - first, that the application of the proposal is limited to those transactions where there are fully disclosed and objectively verifiable brokerage commissions;
- second, that advisers are not required to specifically allocate the benefit of each research service or product received to particular clients; and
- third, that the definition of "client" in the retail mutual fund context refers to the fund itself and not the fund's investors.
Related Links
More information about global developments and soft dollar regulations is available on this website.
|
