New Brunswick Securities Commission

Ontario mutual funds dealer failed to properly supervise sales staff (09/05/27)

NB 740

May 27, 2009

SAINT JOHN (CNB) - An Ontario-based mutual fund dealer, Assante Financial Management Ltd., has been reprimanded and ordered to pay $8,500 in penalties and costs for failing to meet the conditions of an exemption granted under New Brunswick securities regulations. On 20 May, a New Brunswick Securities Commission (NBSC) panel approved a settlement agreement reached between Assante and staff of the NBSC, and ordered these sanctions.

Under New Brunswick securities regulations, Assante was required to supervise its New Brunswick sales staff. As it was not able to meet the requirements for local supervision as set out in these rules, Assante applied to the executive director of the NBSC for an exemption for alternate supervision arrangements. The exemption was granted with conditions in May 2007, for a period of one year.

During a compliance review in August 2008, staff determined that Assante failed to meet the conditions of the exemption, and continued to operate without proper supervision after the exemption expired. Assante subsequently applied to renew its exemption, but the executive director denied the request because of Assante's failure to comply with the conditions of the previous exemption.

"The proper supervision of employees working in the capital markets is a critical component of securities regulation," said Rick Hancox, executive director of the NBSC. "It ensures that actions conducted by a registrant, which could affect an investor, are reviewed by another, more senior person. There is significant value in a second set of eyes to ensure the investor's best interest."

Assante co-operated fully with staff's investigation, and has acknowledged its failure to comply with New Brunswick securities regulations. There is no evidence that any investor has been harmed.


MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045.