On June 23, the Canadian Securities Administrators (CSA) released CSA Notice 31-360 granting transitional blanket relief from certain Client Focused Reforms (CFR) in respect of sales of deferred sales charge (DSC) products.
This is to prevent the period of overlap between the coming into force of the enhanced conflict of interest provisions, effective since June 30, 2021, the client first suitability provisions in the Client Focused Reforms (CFRs), that are scheduled to take place on December 31, 2021 while the ban on DSC products (i.e. the payment by fund organizations of upfront sales commissions to dealers) is required to be implemented by June 1, 2022.
The Blanket Orders applies to the sales of DSC products and allow registrants to be exempted from the:
- Enhanced conflicts requirements from June 30, 2021 to June 1, 2022
- Client first suitability requirements from December 31, 2021 to June 1, 2022
The orders came into effect on June 30, 2021 and will expire on June 1, 2022.