Regulators set ground rules for selling foreign-listed ETFs in Canada
Order execution-only dealers, which do not assess suitability, drew a softer ask.
Staff encouraged these firms to provide alerts at critical points before a purchase, through pop-up windows, confirmation checkboxes, on-screen text, or oral notice for phone orders, telling investors that the product is a foreign ETF and how it differs from a Canadian one.
“The guidance encourages practices that support investors in making more informed decisions when choosing between Canadian and foreign ETFs,” said Stan Magidson, who chairs the CSA and is chair and chief executive officer of the Alberta Securities Commission.
Andrew Kriegler, president and chief executive officer of CIRO, tied the move to the market’s size, saying the guidance “will help ensure that Canadian investors who choose to purchase foreign ETFs have a clear understanding of the products they are investing in.”
The Canadian ETF Association welcomed the guidance.
