The Financial Services Regulatory Authority of Ontario (FSRA) has released additional proposed changes to its draft Financial Professionals Title Protection (FPTP) Application Guidance, which describes its approach to the administration of applications for credentialing bodies (CBs) and the financial planner (FP) and financial advisor (FA) credentials under its title protection framework. The application guidance is intended to help applicants through the CB approval process as well as the process for having an FP or FA credential approved. Changes are also being proposed to FSRA’s draft FPTP Supervision Guidance, which indicates how FSRA will deal with title users who do not hold a recognized credential or entities that improperly claim to be a credentialing body. The FPTP Supervision guidance also includes interpretation on other titles that could reasonably be confused with FP or FA titles, which as anticipated in our May 2021 bulletin, garnered a lot of comments during the previous consultations on the guidance.
Changes to the Application Guidance (from the May 2021 draft) include a new requirement for credential holders to disclose their credentials to consumers in a clear manner. In addition, any disciplinary action taken against credential holders that have been made public should outline the key facts and outcome of the case. In response to comments on the first drafts, CBs would now be expected to include a requirement for credential holders to put their client’s interest first. Also in response to comments, the Application Guidance now references the identification of appropriate asset allocation as a fundamental concept for both FP and FA credentials. Changes to the FPTP Supervision Guidance from the May 2021 draft include additional details on FSRA’s approach for CBs, including its expectations for receipt of annual information returns and the proposed CB examination process. The initial draft of the guidance had included a list of titles that would be out of scope of the proposed framework on the basis that they would not be confused with the FP/FA titles, and that list has now been removed. FSRA notes in response to comments that it intends to monitor the use of other titles for potential future amendments. FSRA’s enforcement powers would also be set out in more details in the revised guidance, including its ability to issue compliance orders to approved (and non-approved) CBs and to individuals who use an FP or FA title without an approved credential. The consultation comment period is open until December 13, 2021.
November 30, 2021