PMAC supports regulatory flexibility and burden reduction that enables improved service, innovation, or a reduction in costs borne by investors. We understand that the MFDA is seeking to permit its Members to rebalance model portfolios in a time and cost-effective manner. We believe that finding solutions to issues of this nature are important. At the same time, we believe that managing client portfolios through discretionary authority should be subject to the requirement to act fairly, honestly and in good faith toward the client and in the client’s best interest.
As a result of a lack of detail in the Proposal with respect to certain of its elements, we struggle to assess: 1) the true scope of the permitted limited discretionary trading, compliance systems, and proficiency requirements; 2) whether the Proposal would have a positive outcome for investors and be beneficial for the Canadian capital markets as a whole; and 3) how the Proposal would be operationalized.
PMAC members have identified the following aspects of the Proposal requiring additional clarity before a full evaluation of the Proposal can be made.