FPSC Comments on the proposed
new CSA Rule regulating financial planners
April 2001
Q & A for CFP professionals and other stakeholders
about the CSA proposed Financial Planning Rule
What is the Rule about?
Three years ago, the Canadian Securities Administrators (CSA)
set up a task force to look into regulating a uniform minimum
proficiency standard in all securities and insurance jurisdictions
for registrants holding themselves out as financial planners.
The result of these efforts is Multilateral Instrument 33-107.
It was first made public for comment in December 1999.
A year after interested parties were invited
to file comments on the Instrument, the Ontario Securities
Commission, on behalf of the CSA, published the final notice
of Multilateral Instrument 33-107, substantially unchanged,
on its website in February 2001. At this time, the OSC announced
its intention to, upon approval of the Minister of Finance,
adopt the Instrument as a Rule that will implement a licensing
procedure for individuals registered with securities and insurance
regulators (outside of Quebec) who wish to hold themselves
out as financial planners. If adopted, it would implement
a regime that determines who can use titles that suggest financial
planning expertise. The securities regulators of Saskatchewan
and Newfoundland had agreed to follow Ontario's lead.
After FPSC President Don Johnston met with the
Ontario Deputy Minister of Finance to express the Council's
unmitigated concerns over the Rule as it is currently written,
the Ontario Minister of Finance ordered further review to
be conducted by the OSC in consultation with all major stakeholders
before the Rule moved any closer to being adopted in Ontario.
What is the FPPE?
Central to the last published draft of the Instrument is the
mandatory requirement of individuals who wish to call themselves
financial planners to write and pass the Financial Planning
Proficiency Examination (FPPE) set by the CSA. However, there
are provisions for "grandfathering" during a transition
period that exempt all current CFP professionals from ever having
to write the FPPE to comply with the Rule's competency requirement.
Who will the Rule affect
directly if unchanged?
If you are an individual engaged in professional financial
planning activities and are registered to sell securities,
mutual funds and/or life insurance with any regulator who
adopts the current version of the Instrument as a Rule or
Policy, you will be required to abide by it.
How will the Rule affect
individuals practising financial planning who are not interested
in selling products?
The Rules and Policies adopted by securities and insurance
regulators in accordance with the current version of the Instrument
will not affect you or your use of titles if you are an independent
fee-only financial planner.
However, the Instrument as it is currently written
requires registered firms to deliver financial planning services
through an employee or agent who meets the prescribed proficiency
standard. So if a firm with which you are associated is caught
by the Rule and chooses to continue to deliver financial planning
services through you, you must meet the requirements even
though you are not registered yourself. As a current CFP professional,
you meet one of the "grandfathering" requirements
that exempt you from having to write the proposed Financial
Planning Proficiency Examination (FPPE). The experience requirement
you have met to earn the CFP designation is likely to be considered
equivalent to the two-years registration requirement of the
current version of the Instrument.
When will it be law?
Adoption and implementation of the current version of the
Instrument as a Rule or Policy in provincial jurisdictions
is unlikely. Only after a new period of consultation has been
concluded and the revised version of the draft has met with
Ministry approval, can the new regime be implemented in Ontario.
Other provinces may or may not follow Ontario's lead in this
initiative. All the dates currently recorded in the draft
relevant to grandfathering clauses as well as Rule implementation
will be revised.
Where can I get more information?
We are posting all our comments and communications regarding
the development of this Rule on this site. However, the uneven
adoption and implementation of the Instrument as rules and
policies in various jurisdictions make it difficult for FPSC
to be the most up-to-date source of what the specific requirements
will be of individuals registered in various provinces. If
you are in doubt as to your compliance requirements with rules
and policies governing your financial planning activities
in your province, we suggest you contact the appropriate securities
or insurance regulator.
CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.
are certification marks