Insurance regulators expect the industry to stop selling new segregated funds with a deferred sales charge (DSC) structure after May 31, even in provinces that haven’t yet announced their own regulations.
“While some jurisdictions may not have made announcements regarding DSC and the June 1 ban, members of the (Canadian Council of Insurance Regulators) and (Canadian Insurance Regulatory Organizations) expect the industry to follow national policy direction,” Tony Toy, manager CCIR policy officer, he wrote in an email to Advisor.ca.
On Wednesday, Ontario Finance Minister Peter Bethlenfalvy approved a DSC ban on new contracts with individual seg funds, effective June 1. Quebec’s Autorité des marchés financiers published a proposed ban on public consultations in December, with comments open until January 31.
In 2022, CCIR and CISRO proposed a Canada-wide ban amid concerns that regulatory arbitrage could result from introducing one set of rules for mutual funds and a different set for seg funds.
“All CCIR and CISRO members support the DSC policy direction published on February 10, 2022.” Toy said.
Advisor.ca reached out to several provinces for a status update and by press time only Nova Scotia had responded.
“Nova Scotia supports the ban and will publish a bulletin with guidance for agents doing business in Nova Scotia,” Department of Finance spokesman Steven Stewart wrote in an email.
