New Regulations on Conflicts of Interests - Nicola Wealth

New Regulations on Conflicts of Interests


The Canadian Securities Administrators have recently adopted new rules designed to enhance the regulatory framework governing firms under its jurisdiction, including Nicola Wealth, commonly referred to as the “Client Focused Reform” amendments (the “CFRs”). Of the various changes included in the CFRs, the rules that impact how firms are expected to avoid or manage conflicts of interest will come into effect on June 30, 2021. Providing clients with enhanced disclosure about conflict of interest situations that may impact them is an aspect of the new rules.

In simple terms, a conflict of interest exists where clients’ interests are inconsistent with or divergent from the interests of Nicola Wealth.

The CFRs reinforce the regulatory requirement of advisory firms to identify material conflicts of interest through disclosure and address them in the clients’ best interest. If we cannot address the material conflict of interest in our client’s best interest, we are expected to avoid it.

It is important for clients to review these disclosures to find out 1) the description of the relevant conflict of interest; 2) the potential impact and risk of the conflict; and 3) how Nicola Wealth proposes to deal with the conflict.

These disclosures, to the extent Nicola Wealth identifies any material conflicts of interest that affect all of its clients generally, will be made available on Nicola Wealth’s updated Managed Account Agreement/Advisory Account Agreement under “Schedule B” which will be uploaded to the Nicola Wealth Client Website under the Documents section by June 30, 2021. If you have any further questions regarding this, please do not hesitate to contact your Nicola Wealth Advisory Team.