On June 10, the Canadian Securities Administrators (CSA) announced steps, effective immediately, to make it easier for advising representatives (ARs) of portfolio managers (PMs) to register as client relationship management (CRM) specialists. Until now, CSA members required all applicants for registration as ARs to have stock-picking expertise and expected applicants for registration as associate advising representatives (AARs) to accumulate such expertise to become eligible to register as ARs.

Now, when a PM sponsors an individual for registration as an AR, the PM can identify the individual as a CRM specialist whose advice to clients will not include stock-picking. If the individual’s application for registration is accepted, it will include terms and conditions prohibiting them from providing stock-picking advice and requiring them to tell clients about the limits of the advice they can give. A PM will be expected to have at least one individual registered as a “full AR”. The CSA has also developed standard terms and conditions for CRM specialists so that regulatory expectations are clear and consistent.

Although this change in regulatory practice addresses the relevant investment management experience (RIME) requirement for registration, applicants in these registration categories will still have to meet the applicable education requirements. For example, to be an AR-CRM, the individual will have to be a Chartered Financial Analyst (CFA) or hold the Canadian Investment Management (CIM) designation).

The approach described above to registering individuals as AR-CRMs reflects a change in regulatory practice. The CSA has not created a new registration category for CRMs at this time.

AUM Law has extensive experience helping firms and individuals navigate the registration process. We can help you assess the pros, cons and probability of succeeding with an application for individual registration in various categories and then prepare your application and engage with regulators on your behalf. Please contact us to discuss your options.

June 30, 2020