On January 19, 2015, IIROC announced that the CSA had approved IIROC 2015 and 2016 CRM2 rules. IIROC dealers had already implemented 2014 CRM2 requirements, worked extensively on 2015 and 2016 implementation, and done as much of the analytical work as possible for CRM2 components where significant uncertainty remained, but major development work for 2015 couldn’t be planned further without final CRM2 rules. This delay compressed the two years the CSA had allotted for July 15, 2015 CRM2 rule implementation to less than six months. This is a time compression of 75%.
The final rules are good news. Questions regarding one issue – book-cost reporting – are still outstanding: Will the CRM2 rules result in clients no longer have access to their book cost information that may reflect personal elections because these elections will not meet the CRM2 definition? The IIAC continues to engage with tax authorities, securities regulators and accountants through CPA Canada on this key issue to improve the client experience.
That’s a very good question. The Federation of Mutual Fund Dealers wrote to the CSA last week agreeing it made sense to align the mandated July 15, 2015 and July 15, 2016 CRM2 implementation dates to the start of the next calendar year: “Why July when the industry works on a calendar year [basis]? The only explanation we [FMFD] could derive was that it happened to coincide with the timing of the release of, and deadlines for, the succession of [CRM2] proposals, not because industry cycles were considered. We [FMFD] would ask you [the CSA] to consider them now.”
Aligning reports to the calendar-year makes sense not only because this is now financial institutions operate, but because this is also how investors plan. Calendar-year reporting will ensure investors have consistent, relevant information at a time of year when it’s of most use to them: At RRSP season when they file taxes and are focused on general financial planning, as opposed to mid-summer.