“If you’re an IIROC-only firm, where everybody has already got the CPH proficiency, it doesn’t really impact those advisors. Some IIROC-registered firms also have advisors who are working solely with mutual funds anyway, despite that they have taken the CPH,” Kunza says. “So the CPH requirement doesn’t really factor into their plans to move forward with SRO consolidation.
“But for firms that are largely mutual fund-only, or are only in the MFDA space, and looking to proceed and move ahead with as much of the SRO consolidation as possible, the CPH piece of the puzzle takes on bigger influence in their decision,” Kunza says. “They’ll have to think about how their advisors will take on the CPH requirement, and what costs they might have to incur in order to help advisors become compliant.”
Meanwhile, the Financial Advisors Association of Canada (Advocis) is seeking additional clarification from regulators as the CPH requirement could result in inconsistent regulation.
“It’s not clear to us how imposing the CPH requirement is an appropriate fit for mutual fund-only advisors at dual-registered firms,” says James Ryu, vice-president Advocacy and General Counsel (above, right). “With the release of the interim rules, the securities regulators haven’t explained to us what specific skills or knowledge gaps would exist for this new category that would be addressed by the CPH course.”
According to Ryu, the CPH requirement as proposed could create an unlevel playing field across the mutual fund-only advisor landscape. Even after the SRO consolidation, he says the requirement won’t apply to mutual fund-only advisors at mutual fund dealers. That means mutual fund-only advisors at dual-licensed firms would effectively face a larger burden, even though they would perform the same services and cater to the same type of clients.
