TORONTO, Feb. 8, 2024 /CNW/ - Ontario consumers with segregated fund contracts will now have stronger deferred sales charge protection. Today, Ontario's financial services regulator (FSRA) announced that the Minister of Finance has approved a second amendment to the Unfair or Deceptive Acts or Practices (UDAP) Rule. This amendment will take effect on February 14.
For some investors, this means the ability to invest their money knowing they can access it later at no cost and with no surprise fees. For others, it means access to information that will help them decide if a deferred sales charge arrangement is the right option for them.
"This is a great day for investors in the province as Ontario is adopting strong protections for consumers who own segregated fund contracts that impose deferred sales charges," said Huston Loke, Executive Vice President, Market Conduct at FSRA. "The protections will depend on an investor's scenario. Some will be able to invest money and access it more easily because deferred sales charges won't apply. Others will get information to help them decide if it's suitable to continue making investments that may be subject to deferred sales charges."
A deferred sales charge is a sales charge that a customer pays if the customer withdraws money from an individual segregated fund contract before the end of a time specified in the contract.
In February 2022, the Canadian Council of Insurance Regulators ("CCIR") and the Canadian Insurance Services Regulatory Organizations ("CISRO") (the "Insurance Regulators") issued a public release strongly recommending that insurers stop selling individual segregated fund contracts with DSCs by June 1, 2023.
The first amendment to the UDAP Rule, which introduced a ban on deferred sales charges for new individual segregated fund contracts, took effect on June 1, 2023.
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone. Learn more at www.fsrao.ca.
FOR MEDIA INQUIRIES:
Russ Courtney
Sr. Manager, Media Relations
Financial Services Regulatory Authority
C: 437-225-8551
Email: [email protected]
SOURCE Financial Services Regulatory Authority of Ontario
Share this article