Ontario regulator issues guidelines for RESP dealers

(July 15, 2004) The Ontario Securities Commission (OSC) has issued a report on scholarship plan dealer firms, having found deficiencies in business, sales and disclosure practices at least three such companies.

“Through a combination of specific terms and conditions on the registration of scholarship plan dealers that we will be monitoring very closely and the release of a report giving the industry guidance on how to comply with their regulatory requirements, we are hoping to eliminate the weaknesses we have identified and better protect people who invest in these products,” said Marrianne Bridge, manager of compliance for the OSC.

“We will monitor developments in this industry closely, and complement our actions with renewed investor education initiatives. We are also considering issuing new rules to better regulate the industry, and we do not rule out enforcement action if compliance is not swiftly and thoroughly improved.”

The three companies in question will have to obey the following rules as they address the deficiencies:

• The firms will file written progress reports with the OSC setting out in detail their progress in correcting deficiencies identified in compliance reviews of their practices; and
• The progress reports will be filed by specific deadlines, with progress reports continuing to be filed until all deficiencies are resolved to the OSC’s satisfaction.

Two of the firms are also barred from registering new salespeople, using business names or trade names which the firms have not identified to the OSC, establishing new branches or operating from any business location unless the firms have provided notice of the location to the OSC.

The OSC did not release the names of the firms in question, but released a brochure today entitled “Saving for Your Child’s Education”, which is available from the OSC at www.investored.ca.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com