Vancouver’s Credential Asset Management to pay $ 300,000 for internal incentive programs, inadequate controls and oversight

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VANCOUVER, BC, December 10, 2021 / CNW / – VancouverMutual fund broker Credential Asset Management Inc. has agreed to pay $ 300,000 to the British Columbia Securities Commission (BCSC) for offering financial incentives to its representatives for the sale of certain funds.

Credential Asset Management is a mutual fund broker for various financial institutions that operate through Canada. In a settlement agreement with the BCSC, the company agreed that it was offering incentive payments contrary to National Instrument 81-105, Mutual Fund Selling Practices. NI 81-105 is designed to minimize conflicts of interest by prohibiting incentive payments to representatives for recommending certain mutual funds over others.

The company paid the incentives through two separate programs to promote the sale of mutual funds to clients of financial institutions. The representatives who received the incentives were employed by both Credential Asset Management and the respective institutions where they were based.

Credential Asset Management shared the proceeds from the sale of these mutual funds with financial institutions, which then paid incentives to the representatives.

The firm also provided performance bonuses to two representatives who worked at its head office related to the sale of mutual funds in one of the programs. It also violated securities laws.

In addition to violating the prohibition on inducement payments, Credential Asset Management also failed to establish a system of control and oversight to ensure that inappropriate inducements did not occur, a requirement of National Instrument 31-103. , Registration requirements, exemptions and continuing obligations of registrants.

Despite the misconduct of Credential Asset Management, none of the incentive programs had an impact on the fees or costs borne by clients of the mutual funds. The company has also taken steps to correct the deficiencies.

As part of the settlement, Credential Asset Management agreed to pay $ 300,000 at the BCSC. It has also ended all remaining incentives offered to its head office representatives and duplicate representatives that are contrary to National Instrument 81-105 and put in place acceptable systems and policies.

The resolution of this case was the result of a joint effort by the BCSC and the Mutual Funds Dealers Association of Canada (MFDA), a self-regulatory body. Credential Asset Management has entered into its own settlement agreement with the ACFM, agreeing to pay additional $ 300,000 to the organization. The BCSC would like to thank the ACFM for its assistance in this matter.

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating the capital markets in British Columbia by the application of the Securities Act. Our mission is to protect and promote the public interest by promoting:

  • A fair securities market worthy of the public

  • A dynamic and competitive securities industry that offers investment opportunities and access to capital

Learn how to protect yourself and become a smarter investor on www.investright.org

SOURCE British Columbia Securities Commission

Cision

View original content: http://www.newswire.ca/en/releases/archive/December2021/10/c4556.html


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