The Canadian Securities Administrators announced Monday that they are seeking comments on the newly proposed National Instrument 23-102: Use of Client Brokerage Commissions as Payment for Order Execution Services or Research (“Soft Dollar” Arrangements).
The proposal outlines how soft dollars may be used by brokers and advisers and how deals using soft dollar arrangements are disclosed.
“The goal here is to ensure that advisers manage the appearance of conflicts of interest that may develop when investors do not have complete information about how the adviser spends their money,” says Jean St-Gelais, chair of the CSA and president and chief executive officer of the Autorit des marchs financiers. “Investors may not be aware of soft dollar practices. Enhancing disclosure requirements in this area will improve investors’ confidence.”