The Investment Industry Association of Canada indicates that it still has concerns with the proposed Client Relationship Model, recently proposed by the Investment Dealers Association of Canada.

In a letter to Jean St-Gelais, head of the Autorité des marchés financiers and chairman of the Canadian Securities Administrators, the IIAC outlines its main concerns with the CRM; which it also plans to present through a comment letter during the formal comment period and via representations to the CSA directly.

The industry’s main concerns, it notes, are: that regulators haven’t identified a market failure that requires regulatory intervention through the CRM; that there hasn’t been a cost-benefit analysis; and, that the disclosure requirements it would impose are excessive.

“From a principles perspective there are some good ideas contained in the CRM proposals, but those have been lost in the details,” the letter notes, adding, “The addition of further prescribed rules applicable to the investor/advisor relationship in the absence of a Canadian capital markets problem goes against the mandate of enhancing the efficiency and competitiveness of the Canadian capital markets.”

The letter says that the mandated disclosure proposed under the amendments “would result in an intricate and excessively detailed disclosure document. It will require an unreasonable amount of time and effort to complete and due to its length, will result in few clients actually reading and understanding the document.”

Instead, the IIAC recommends a much shorter standardized and mandated industry-wide disclosure document be created for all account types.