Quebec’s financial watchdog is cracking down on businesses that illegally run a money-services business.
Autorité des marchés financiers
-
New virtual currency targeted by Quebec financial watchdog
The Quebec Financial Markets Administrative Tribunal issued a series of expansive ex parte orders prohibiting Dominic Lacroix and several of his companies from promoting and soliciting investors for a new virtual currency set to be launched. -
Quebec regulates virtual currency ATMs and trading platforms
In a move that caught the business and legal community by surprise, Quebec became the first jurisdiction in Canada to regulate the digital currency sector by requiring businesses that operate virtual currency automated teller machines or trading platforms to obtain a licence to operate in the province.
But the recently published amendments to the Policy Statement of the Money Services Businesses Act (Act) by Quebec’s financial watchdog has drawn criticism from industry observers who assert that it is brimming with ambiguities and risks hindering the burgeoning digital currency industry.
-
Risk management advisors must be registered with the provincial securities regulator, says court
Independent risk management advisors must be registered with the provincial securities regulator in order to carry on advisory activities related to insurance product offerings, following a precedent-setting ruling by the Court of Quebec that is being hailed as a victory for Quebec consumers by insurance and legal experts.
Up until the ruling Quebec consumers had no recourse against risk management advisors because they operated outside the scope of An Act respecting the distribution of financial products and services (Act) thanks to a loophole in the law.
“This ruling sheds light on what has been considered to be a grey zone,” noted Sylvain Théberge, a spokesman with the Autorité des marchés financiers (AMF), the regulatory and oversight body for Québec’s financial sector. “It’s not because you are an unregistered risk management advisor that the repercussions of the advice being offered will have less of an impact than a consultant who is duly registered. The ruling clearly states that by the very nature of their work these consultants must be duly registered.”
-
Investors delighted but insurers concerned
A ruling that ordered an insurance company to pay $460,000 to a Quebec couple after their financial advisor invested their retirement nest egg in promissory notes in scandal-plagued Montreal financial group Mount Real Corp. has raised questions over the scope of professional liability insurance coverage in the province and ostensibly broadened investor’s protection.
Quebec’s financial and insurance sectors are now worried over the impact of a Quebec Court of Appeal unanimous decision that declared inoperative clauses excluding gross negligence in professional liability insurance policies under the Act respecting the distribution of financial products and services (ADFPS). Law insurance experts are speculating that the finding may have a reach beyond the ADFPS, and affect professional liability insurance policies held by the indemnity funds of Quebec’s 44 professional corporations, including the Barreau du Québec. The Quebec legal society declined to comment.
Categories: Business, Financial services, Quebec, Quebec Court of Appeal, Rulings, White-collar crimes -
Quebec first province to regulate money-services industry
A recently passed bill that made Quebec the first province to regulate the money-services industry has elicited mixed reactions, drawing praise by some who see it as a blessing for legitimate small businesses catering to ethnic communities, unease by others who are concerned about the potential broad reach of the law, and baffled some legal observers who wonder why the provincial government appears to be duplicating an already existing federal law.
Touted as part of an offensive against money laundering and tax evasion schemes, the Money-Services Businesses Act (Act) introduces a licensing regime for money-services businesses that will be administered and enforced by the Autorité des marchés financiers (AMF), Quebec’s securities regulator.
-
New indemnity fund proposed following out-of-court settlement in Norbourg class-action
Days after an agreement in principle was reached in the Norbourg class action suit, opening the door for thousands of investors to recover nearly all the money they lost in one of the biggest investment frauds in the country, questions surrounding the efficacy and scope of investor protection provided by the debt-ridden indemnity fund overseen by Quebec’s financial watchdog have surfaced.
A group of investor advocates, financial professionals, and the body that oversees financial professionals in Quebec are beckoning the provincial government to cast a critical eye on the financial services compensation fund administered by the Autorité des marchés financiers (AMF), a call that Quebec Finance Minister Raymond Bachand seems to have heard. The finance minister recently requested the securities regulator to “see if something different should be put in place, how it should be done, while listening to industry.”
-
Investor complaints rising
Thanks to an economy that is still in doldrums and equity markets showing few signs of solid recovery, a growing number of investors faced with the prospect of shrinking investment portfolios are lodging complaints with provincial and federal bodies that oversee the investment community.
The federal Ombudsman for Banking Services and Investments (OBSI) and the Quebec Chambre de la sécurité financière are reporting dramatic increases in investor complaints since the beginning of the year while Quebec’s financial watchdog, the Autorité des marchés financiers (AMF), has received a surging number of calls requesting information over investment products.
