September 21, 2018 09:30
Siskinds LLP and Bates Barristers P. C. has filed a class action against the Canadian Imperial Bank of Commerce and Trust Corporation CIBC concerning trailing commissions paid to online brokers/discount (discount brokers) on mutual funds CIBC.
“The action alleges that the defendants pay trailing commissions to discount brokers through whom the mutual funds CIBC are sold and that the investors who hold these funds in of the discount brokers do not receive any value for the trailing commissions paid. The action aims to compensate these investors, ” said the firms in a press release.
Several discount brokers
The discount brokers, which include, among others, Pro-Investors, CIBC, BMO investment Line, RBC Direct investing, Scotia iTRADE, direct Investment, TD, National Bank direct Brokerage, online Brokerage Desjardins, HSBC InvestDirect, Laurentian Bank discount Brokerage, Investor, Qtrade and Virtual Brokers, according to Siskinds LLP and Bates Barristers P. C.
The law firms say that they would like to speak with persons who hold, or held by mutual funds Renaissance (which are part of the family of mutual funds CIBC) or mutual funds series A from other families of mutual funds through a discount broker.
Third class action
This is the third proposed class action filed by Siskinds LLP and Bates Barristers P. C. relating to the practice of the managers of mutual funds that pay trailing commissions on mutual funds held through discount brokers. Class actions proposed have also been filed against TD asset Management Inc., the trustee and manager of mutual funds TD, and asset Management 1832 L. P., the trustee and manager of mutual funds, Scotia, and Dynamic.
Project of abolition
The canadian securities administrators (CSA) have also plan to ban trailing commissions paid to brokers and deferred acquisition costs. The government of Ontario strongly opposes.
A consultation is currently underway to assess the consequences on the practices of the brokers of such an abolition. Thefinancial markets Authority also organizes an information session on this topic.