On June 10, 2010 the Canadian Securities Administrators (CSA) announced steps to facilitate portfolio managers’ use of client relationship management specialists. These actions aim to better align the CSA’s assessment of relevant investment management experience with portfolio managers’ evolving business models.

Many portfolio managers now have an operating model that divides responsibilities between specialized client relationship managers and stock-picking teams. To keep pace with this development, the CSA is updating its practice of requiring all advising representatives to have stock-picking expertise.  

Effective immediately, when a portfolio manager sponsors an individual for registration as an advising representative, the portfolio manager may identify the applicant as a client relationship management specialist whose advice to clients will not include stock-picking. The CSA will impose terms and conditions on client relationship management specialists registered as advising representatives, which will prohibit them from providing stock-picking advice. They will also be required to tell clients about the limits of the advice they can give.    

The CSA is not making any changes to proficiency requirements.   Standard conditions on client relationship managers’ registration as advising representatives will require them to take steps to ensure that clients understand the different roles of the members of the specialized teams that serve them.  

The CSA will monitor and review the experience of portfolio managers that choose to operate with registered client relationship management specialists. This exercise may lead to further changes designed to formalize a permanent accommodation for client relationship management specialists.

The notice can be found at: https://www.osc.gov.on.ca/en/NewsEvents_nr_20200610_csa-make-it-easier-portfolio-managers-client-relationship-management.htm

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.