Toronto-based Mutual fund dealer Quadrus Investment Services Ltd., expects to pay $8 million in restitution to clients who inadvertently paid higher MERs when they were entitled to lower-cost versions of their funds.<\/p>\n
The Ontario Securities Commission (OSC) on Tuesday approved a no-contest settlement agreement with Quadrus, which self-reported an apparent compliance issue that resulted in certain clients owning higher-MER versions of its funds when they could have been in cheaper funds based on the size of their holdings.<\/p>\n
OSC staff alleged that control and supervision inadequacies resulted in the clients paying excess fees.<\/p>\n
As part of the deal with the OSC, Quadrus agreed to pay approximately $8 milllion in compensation to the affected clients. It also agreed to make a voluntary payment of $250,000 to the regulator, along with $20,000 in costs.<\/p>\n
According to the settlement agreement, the issue came to light in the wake of the OSC’s first ever no-contest settlement, which was reached with several TD investment firms in November 2014. “Quadrus discovered the MER control and supervision inadequacy as part of a review of its internal practices and procedures prompted by the publication of a no-contest settlement agreement [with TD],” the settlement agreement says.<\/p>\n
See: TD to repay $13.5 million to clients it overcharged<\/a><\/strong><\/p>\n