COVID-19: Investment fund industry updates (April 16, 2020)
Deferral of IIROC Fees
IIROC has announced that it will provide temporary financial relief on its fees to small and medium-sized Dealer Members. Quarterly fee instalments will be deferred for firms who pay less than $500,000 in annual fees. In addition, the high risk premiums have been set to zero for this fiscal year.
CSA Provides Additional Time to Implement Client Focused Reforms
The Canadian Securities Administrators (CSA) have published relief orders that provide registrants with additional time to implement the requirements related to Conflicts of Interest (COI) and Relationship Disclosure Information (RDI) which were originally intended to come into effect on December 31, 2020. The MFDA and IIROC intend to harmonize their implementation timelines with those published by the CSA.
- The COI provisions have been extended by six months to respond to industry challenges related to COVID-19. These provisions will now come into effect June 30, 2021.
- The RDI provisions have been extended by one year to respond to implementation issues raised by the industry. These provisions will now come into effect on December 31, 2021.
Bank of Canada Announces Corporate Bond Buying Program
On April 15th, the Bank of Canada (BOC) announced a new Corporate Bond Purchase Program to “support the efficient and continuous functioning of financial markets”. Under the program, the BOC will purchase eligible corporate bonds in the secondary market. The program size will be capped at $10 billion and will be restricted to senior secured and unsecured bonds originated by Canadian incorporated companies with a remaining maturity of up to 5 years and a minimum credit rating of BBB or equivalent.
On the same day, the Bank announced a Provincial Bond Buying Program to supplement its provincial money market buying program. Under the program, the BOC intends to purchase up to $50 billion in provincial bonds.