Will regulators follow Quebec's lead?

On February 1, 2004, Quebec unveiled a new Authority that reports to the Minister of Finance and is responsible for investment regulation in Quebec. The CVMQ (Quebec Securities Commission) is integrated into this new authority. The authority has a Claims Section to which investors can submit claims. They also have a Fund, Fonds d’indemnisation des services financiers (FISF), that enables restitution to be paid to small investors with certain limitations.

These two initiatives are of primary importance for small investors and these changes are consistent with what SIPA has been requesting from our regulatory system. Investor protection by the SROs does not work and the initiative by the Quebec government in establishing this new authority should propel the rest of Canada to take similar action.

What is covered by the Fonds d’indemnisation des services financiers (FISF)?

The FISF covers three specific acts in eight specific sectors. It is important to carefully distinguish acts that qualify for indemnification by the FISF from those that are not.

The role of the Fonds d’indemnisation des services financiers is to provide financial compensation to any person who is the victim of fraudulent acts, deceptive practices, or embezzlement. FISF compensation is designed to cover these three categories of acts within the scope of the eight sectors regulated by the Act respecting the distribution of financial products and services:
1. Insurance of persons (life, health, disability, etc.)
2. Group insurance of persons (insurance offered in the workplace)
3. Damage insurance (liability, auto, home insurance, etc.)
4. Claims adjustment
5. Financial planning
6. Group savings plan brokerage (mutual funds)
7. Investment contract brokerage
8. Scholarship plan brokerage.

In order for claims to be eligible, the person to whom sums of money are remitted and who committed the fraud must also hold a valid right of practice at the time of this action.

For additional information, contact the Information and Referral Centre:
Tel: 1 866 338-FOND (3663) e-mail: info@fisf.qc.ca