The Ontario Securities Commission (OSC) will hold a hearing on June 7 to consider a proposed no-contest settlement agreement with IPC Securities Corp. (IPCSC) and IPC Investment Corp. (IPCIC) in connection with alleged client overcharging, the regulator announced on Tuesday.<\/p>\n
The details of the settlement will only be revealed if the agreement is approved at the hearing.<\/p>\n
IPCSC is a member of the Investment Industry Regulatory Organization of Canada and is registered as an investment dealer. IPCIC is a member of the Mutual Fund Dealers Association of Canada and is registered as a mutual fund dealer and an expemt market dealer.<\/p>\n
According to the statement of allegations, the dealers self-reported weaknesses in their controls and supervision to their respective self-regulatory organizations in 2015.<\/p>\n
These inadequacies “resulted in certain clients of the IPC dealers paying, directly or indirectly, excess fees that were not detected or corrected by the IPC dealers in a timely manner,” it states.<\/p>\n
\u201cCommission staff do not allege, and have found no evidence of dishonest conduct by any of the IPC dealers,\u201d it adds.<\/p>\n
The alleged overcharging concerns clients in fee-based accounts, which held assets that also included embedded trailer fees and clients that qualified for a lower management expense ratio (MER) series of certain proprietary funds, but paid excess fees by being invested in the higher MER series of the same funds.<\/p>\n
The OSC has resolved a number of similar cases of overcharging with a variety of dealers under its no-contest rules, which allows firms to settle allegations without admitting any wrongdoing, provided they meet certain conditions \u2014 typically including self-reporting, the firm paying client restitution, and other voluntary corrective action.<\/p>\n