The Investment Funds Institute of Canada kicked off its 22nd annual national conference in Toronto on Tuesday with remarks from incoming chairman Oliver Murray.
In addition to paying tribute to the accomplishments of outgoing chairman Robert Frances, president and CEO of Peak Financial Group, Oliver, who’s the CEO of Brandes Investment Partners & Co., outlined his two priorities for his term as chairman: to develop and enhance the mutual fund proposition for IFIC members and to enhance dialogue with the regulators to ensure that the value proposition of mutual funds is well understood.
“This will also enhance the overall competitiveness and longer-term health of our industry,” Murray said.
He emphasized the importance of mutual funds within the overall Canadian economy, particularly as the population ages and saving for retirement becomes crucial. The gradual disappearance of defined-benefit pension plans also underscores the role that mutual funds have to play.
Murray pointed to statistics showing that 47% of Canadian adults currently own mutual funds either inside or outside an RRSP, and that the mutual fund industry makes up $700 billion, or 30%, of Canadians’ financial wealth.
He proposes a higher level of dialogue with both regulators and politicians on the regulation of funds, which must surpass the technical issues that have been the focus of these discussions in the past.
“We have failed to look at the big picture,” he said. “And the big picture is to look at what our industry is providing and the best way it can serve investors.”
The new level of dialogue that Murray proposes involves four key areas: a strategic and dynamic context; improving regulatory processes; building in accountability; and strengthening harmonization of rules across the provinces.
This includes asking policy makers-for a periodic review of the entire mutual fund regulatory structure, which would allow for a more strategic approach to regulation.
In addition, Murray said rules need to be improved to ensure that like products are treated similarly to avoid product arbitrage.
“Given the maturity and importance of our industry, it is time to quit treating it as a very narrow piece of the capital markets landscape,” he said. “Regulations and other requirements that are conceived of and apply to only mutual funds are likely to be too narrow.”
On the topic of harmonizing national regulations, Murray gave credit to the efforts the Canadian Securities Administrators have made: “Our regulators have achieved a level of harmonization that serves the interest of member firms who operate across the country well.”
He added that the system is not perfect, but noted that IFIC chooses not to take a side on the debate between a single regulator or a passport model.
“We want a model that delivers a consistent consumer experience from coast to coast to coast,” he said.
Murray also touched on the pending changes to point-of-sale regulation. He outlined IFIC’s concerns with the proposed changes, including decreased investor choice, product arbitrage and an uncompetitive environment as well as a lack of effective consultation.
IFIC: New chairman to focus on two key priorities
Oliver Murray of Brandes aims to develop and enhance mutual fund proposition and to improve dialogue with regulators
- By: Megan Harman
- September 23, 2008 September 23, 2008
- 14:31