Unbundling is still on the radar in Canada, but less so. The country’s national regulatory body, the Canadian Securities Administrators (CSA), after criticism from industry, pulled back from a 2006 proposal requiring more documentation of how money managers use commissions.
Instead of mandating an account-by-account split of the costs-research and execution-inherent in commission spending, the CSA is now proposing that money managers provide more qualitative and less quantitative disclosure.
However, the CSA still hopes to see some unbundling of the commission spend. It is now proposing that money managers supply clients with an aggregated amount of their commission spend and an estimate of the percentage of money used for non-execution services. The CSA’s retreat from detailed disclosure of soft dollars included in its July 2006 “Proposed National Instrument 23-102” comes after complaints from industry participants. “There were a number of arguments received for why the detailed proposed disclosure would be overly onerous to produce,” the CSA noted in its revised national instrument.
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