Ontario should move forward the ban of upfront commissions on investment funds

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On December 19, the Canadian Securities Administrators (CSA) announced that they will ban two types of commissions that are embedded in some mutual fund purchases: Upfront sales commissions by investment fund organizations to dealers, which would lead to the end of the Deferred Sales Charge (DSC) option and associated redemption fees, and trailing commissions by investment fund organizations to dealers who only execute orders and do not provide advice, such as discount brokers. (Learn more here.)

The decision to ban all upfront sales commissions by investment fund organizations and dealers will eliminate a key point of conflict and abuse within the Canadian marketplace, create greater transparency, and protect consumers. 

Unfortunate, the province of Ontario has decided to opt-out of the prohibition of upfront sales commissions. We encourage the government of Ontario to reconsider its position, and failing a change in their position, for all investment fund manufacturers to cease the sale of fund series with upfront commissions. Please lend your name to this initiative