Financial professionals title protection rule and guidance second consultation

Thank you for providing your feedback on FSRA’s Proposed Financial Professionals Title Protection Rule, Application Guidance and Supervision Guidance.

We appreciate the comments received to date. Your feedback will help to inform our final rule and approach.

The request for submissions is now closed.

Summary

The Financial Services Regulatory Authority of Ontario (FSRA) is seeking additional feedback on the:

• revised Proposed Rule 2020-001 – Financial Professionals Title Protection (FPTP Rule);
• revised Proposed Approach Guidance – Financial Professionals Title Protection – Administration of Applications (FPTP Application Guidance);
• newly Proposed Approach Guidance – Financial Professionals Title Protection – Supervisory Framework (FPTP Supervision Guidance); and
• newly proposed structure for collecting and remitting fees, as outlined in Appendix B of the Notice of Changes and Request for Further Comment.

The proposed FPTP Rule and FPTP Application Guidance were posted for consultation in August 2020. All stakeholder comments received were carefully considered and are summarized in the consultation summary report. For this second consultation, the FPTP Rule is posted with annotated revisions. A summary of the changes made to the FPTP Application Guidance is also available.

The public consultation is open for 40 days.

Overview

The proposed FPTP Rule sets out the requirements and standards that entities would be required to meet in order to obtain FSRA approval as a credentialing body, and to obtain FSRA approval of a Financial Planner (FP) or Financial Advisor (FA) credential. The proposed FPTP Rule also sets out ongoing requirements to maintain such approvals. The Notice of Changes and Request for Further Comment, which accompanies the proposed FPTP Rule, provides background and rationale to help understand the revisions to the proposed FPTP Rule, the proposed approach to establishing a fee structure, and sets out the process for public consultation.

The proposed FPTP Application Guidance sets out FSRA’s proposed approach to the administration of applications for credentialing bodies and FP/FA credentials under the proposed Title Protection Framework. It is intended to help potential applicants understand what is required to be approved, and maintain approval, as a credentialing body, and what is required to have an FP or FA credential approved under the Financial Professionals Title Protection Act, 2019 (FPTPA).

The proposed FPTP Application Guidance includes an outline of the type of information FSRA would expect in an application for approval of a credentialing body, as well as approval of FP or FA credentials.

The proposed FPTP Supervision Guidance outlines FSRA’s supervision approach for approved credentialing bodies, and FP and FA titles users without an approved credential. The guidance also addresses entities that misrepresent themselves as approved credentialing bodies or as offering approved credentials without FSRA approval.

Background

In the 2019 Ontario Budget, the government announced that it would introduce legislation to limit the use of the titles of “financial planner” and “financial advisor” in Ontario to individuals who have obtained a credential from a credentialing body approved by FSRA. The new title protection framework will take a measured approach to enhance consumer protection without introducing unnecessary regulatory burden.

The framework is intended to respond to concerns among consumer/investor advocates and industry about the currently unregulated use of titles in the financial services market today. A consumer research survey commissioned by FSRA in fall 2020 found that 86% of consumers agreed that there is a need for minimum standards for the use of the “financial planner” and “financial advisor” titles.

The Financial Professionals Title Protection Act, 2019 (FPTPA) received Royal Assent in May 2019. It has not been proclaimed into force. 

FSRA was granted rule-making authority under the FPTPA to design the FP/FA Title Protection Framework, including:

• approval criteria for credentialing bodies and credentials;
• applications by prospective credentialing bodies;
• application fees; and
• transition periods for existing FP/FA title users.

Useful links

• Proposed Rule 2020-001 – Financial Professionals Title Protection (FPTP Rule) (Revised);
• Proposed Approach Guidance – Financial Professionals Title Protection – Administration of Applications (FPTP Application Guidance) (Revised);
• Proposed Approach Guidance – Financial Professionals Title Protection – Supervisory Framework (FPTP Supervision Guidance) (New)
• Summary of Changes to the Application Guidance
• FPTP Consultation Summary Report (August 2020)

Before we begin, please make sure you do not include any personal or private financial information. If your inquiry does require this information be shared with us, please call us at 1-800-668-0128 or email us at [email protected] for instructions.

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