Canadian Securities Administrators Consultation Paper 33-403: A Step Towards a Potential Fiduciary Duty for Advisers and Dealers

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GENERAL PRINCIPLES

The CSA conducted a review of the general principles applicable to the legal duties and the standard of conduct imposed upon investment advisers and dealers across Canada. Although said duties differ in certain respects from one province to another, securities legislation generally provides that advisers and dealers must act in good faith, with honesty and fairness towards their clients. There is currently no consensus as to whether advisers and dealers should be obliged to act in the best interests of their clients when providing investment advice. In certain circumstances, Canadian courts may find that an adviser or dealer is bound by a common law fiduciary duty toward his client, notably when the facts indicate a relationship of trust and confidence with the client. In Quebec, according to both the general civil law and the Quebec Securities Act, as well as the Civil Code of Quebec provisions relating to the mandate, advisers and dealers are currently under a duty to act in the best interests of their clients.

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