OSC Publishes Review Of ICPM marketing practices

by Carla Johnson, Investors Offshore.com, London

13 November 2007

The Ontario Securities Commission (OSC) has this week published a staff notice on the marketing practices of Investment Counsel/Portfolio Managers (ICPMs) following a focused review of marketing practices by firms registered as such entities.

The notice summarized the key findings of the review of 21 ICPMs conducted by the Compliance team of the OSC, and found, as had previous reviews, that marketing issues remained the top significant deficiency identified in the reviews of the ICPMs in question.

In particular, the OSC revealed that its staff had seen a rise in the number of issues in the marketing practices of ICPMs for non-prospectus qualified securities, such as pooled funds and hedge funds. The recent review was designed to gain a better understanding of the type and content of marketing materials used by ICPMs, assess compliance with Ontario securities laws, and to identify any regulatory gaps.

Staff Notice 33-729 outlines a number of suggested practices designed to assist registrants in meeting their obligations to deal fairly, honestly and in good faith with their clients.

Among the recommendations, the notice suggests that ICPMs ensure that performance data be based on actual returns, not hypothetical figures, and be calculated using a consistent methodology.

Recommended