This is a regulatory initiative designed to provide full disclosure of investment performance and costs for investors. This currently applies only to the Wealth Management Industry – not Insurance industry, however, some insurers have chosen to apply this initiative to their Segregated Funds as well. There are actually 3 phases of CRM that have been implemented over a course of 3 years.
Phase 1 (completed)
Phase 2 (completed)
- Pre-trade disclosure, verbal discussion on fees and other costs
- Post trade disclosure for debt security transactions, in writing – include the annual yield as well as the total dollar compensation
Phase 3 (due July 15, 2016)
- Enhanced client account statements to show information such as (but not limited to):
- Whether an investment is covered by an investor protection fund
- Enhanced statement changes to include full account and fee transparency;
- Performance can now to be based on a money weighted rate of return (MWROR). This new formula calculates the rate of return net of charges;
- Plain language text explaining what terms on the statement mean – e.g. Book Cost;
- Trade confirmations must disclose the dollar amount of each transaction charge.
As part of our CRM2 readiness initiative, we work very closely with our clients to identify functionality that is relevant to their business process needs. Through thought partnership we distribute overview documentation providing industry, regulatory and project updates as well as conduct monthly meetings with our clients to ensure that their business needs are met through a collaborative solution.
L&T Canada’s compliance team also participates in many IFIC and CLHIA and Industry groups/sub-groups around the CRM2 discussions