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2018 ANNUAL ACTIVITY REPORT Apr Canadian Securities Administrators INVESTOR EDUCATION COMMITTEE 2018 ANNUAL ACTIVITY REPORT Apr. 2017 - Mar. 2018 Canadian Securities Autorités canadiennes CanadianAdministrators Securities enAutorités valeurs canadiennesmobilières Administrators en valeurs mobilières CSA Investor Education Committee About the CSA Annual Activity Report 2018 INVESTOR EDUCATION COMMITTEE How we serve, educate, and protect Canadian investors TABLE OF CONTENTS About CSA Investor Education...................................................................... 2. IEC Membership.................................................................. ............................... 3. The Canadian Securities families and their future. prevention resources to raise REVIEW of CSA INVESTOR EDUCATION INITIATIVES Administrators (CSA) Investor awareness of current investing April 2017 – March 2018: Education Committee (IEC) is The CSA wants Canadians topics and investor related policy. comprised of representatives to know they can turn to their The 2017 CSA Investor Index................................................................................ 5. from the provincial and securities regulator for unbiased Collaboration and partnerships Twelve Months on the Frontlines........................................................................ 7. territorial securities regulators. information to help them make play an important role in the Foray into Facebook................................................................................................. 10. informed and suitable IEC. By combining efforts with Our vision is that Canadians investment decisions. To meet other organizations working in Building Capacity....................................................................................................... 11. understand their role in, and are this goal, members work financial education, and with NOTABLE JURISDICTIONAL INITIATIVES: aware of, the impact of their together to develop accessible each other, the IEC comes closer financial decisions on their investor education and fraud to accomplishing its goals. The British Columbia Securities Commission................................................. 13. The Alberta Securities Commission................................................................... 16. The Financial and Consumer Affairs Authority of Saskatchewan............ 19. The Manitoba Securities Commission............................................................... 21. The Ontario Securities Commission................................................................... 23. Autorité des marchés financiers, Québec........................................................ 26. Financial and Consumer Services Commission, New Brunwick............... 29. The Nova Scotia Securities Commission........................................................... 32. Service NL, Newfoundland & Labrador.............................................................. 33. The Prince Edward Island Office of the Superintendent of Securities... 33. The Office of the Yukon Superintendent of Securities................................ 34. The Office of the Northwest Territories The CSA IEC facilitates access to objective Superintendent of Securities................................................................................. 34. investment information and helps consumers The Office of the Superintendent of Securities, Nunavut........................... 34. make informed investment decisions. 1. Canadian Securities Administrators Investor Education Committee Annual Activity Report 2018 2. IEC MEMBERSHIP The following jurisdictions had active membership on the IEC from April 2017 to March 2018: Svetlana Fowler........................................................... Canadian Securities Administrators Andy Poon & Malka Aujla........................................ British Columbia Securities Commission Alison Trollope & Nicole Tuncay........................... Alberta Securities Commission Shannon McMillan..................................................... Financial and Consumer Affairs Authority of Saskatchewan Ainsley Cunningham & Jason Booth................... Manitoba Securities Commission Tyler Fleming, Kevan Hannah, REVIEW of CSA Raj Balasubramanian, & Justin Leung-Yinko.... Ontario Securities Commission EDUCATIONAL INITIATIVES Michel Gariépy............................................................ Autorité des marchés financiers, Québec Marissa Sollows (Chair)............................................ Financial and Consumer Services Commission, New Brunswick Kimberly Ryan & Craig Whalen.............................. Service NL, Newfoundland and Labrador David Harrison............................................................. Nova Scotia Securities Commission Curtis Toombs.............................................................. The Prince Edward Island Office of the Superintendent of Securities Rhonda Horte.............................................................. The Office of the Yukon Superintendent of Securities Shmaila Nosheen....................................................... The Office of the Northwest Territories Superintendent of Securities Jeff Mason..................................................................... The Office of the Superintendent of Securities, Nunavut 3. Canadian Securities Administrators Investor Education Committee Below: Innovative Research Group graph indicating levels of Canadian investor enthusiasm. THE 2017 CSA INVESTOR INDEX Highlighting the Ongoing Importance of Investor Education Initiatives in Canada The 2017 CSA Investor Index is the fourth full survey that looked at investment knowledge, investor KEY FINDINGS behaviour and incidences of investment fraud among Canadians. More than half of Canadians (51 per cent) failed 53 per cent of Canadian 72 per cent of investors More Canadians are In addition to examining themes the general investment knowledge test included investors are optimistic who have an adviser using some form of about achieving their report they received social media for similar to those conducted in 2006, in the survey, highlighting the continued 2009 and 2012, the survey also investment targets over an annual statement investing information added new questions regarding: importance of the CSA’s and its members’ the next year, compared covering fees and (43 per cent), up from investor education initiatives. with 39 per cent of performance since 35 per cent in 2012. Robo-advisers: investors in 2012. January 2017 (which Specifically, Facebook With the increasing popularity of was required under (22 per cent in 2017 robo-advisers, the study explored Canadians continue to be approached with CRM2). Most did not and 16 per cent in investors’ familiarity with fraudulent investment opportunities, with 18 per speak to their adviser 2012) and YouTube (20 robo-advisers, their prevalence, after reviewing their per cent in 2017 and cent believing they have been approached with a and the perceptions surrounding report (63 per cent). 14 per cent in 2012) these services. fraudulent investment opportunity. This is down saw the largest slightly from 22 per cent in 2016. increases in use. The impact of the Client Relationship Model, Phase 2 (CRM2) on investors: RISE OF THE ROBO-ADVISERS For the 2017 CSA Investor Index, Innovative Research Group With new disclosure requirements interviewed 7,271 Canadian adults online between August 28 Robo-advisers are gaining popularity among on costs and performance recently and October 2, 2017. coming into effect, the study took Canadians, with 23 per cent reporting that they are a closer look at whether investors likely to use one if they open a new account or The information and analysis from these surveys recall receiving a CRM2 report, move an existing one. Yet, only nine per cent of are intended to help the CSA Investor their perceptions of the report Education Committee develop and deliver Canadian investors currently have an account and whether they have taken any programs to help investors make appropriate action in light of it. with an online investment adviser, and just investment decisions and recognize, avoid, 16 per cent of Canadians are familiar with and report suspected fraud. automated online investing services. 5. Canadian Securities Administrators Investor Education Committee Annual Activity Report 2018 6. TWELVE MONTHS ON THE FRONTLINE A year inside the fight against investment fraud in Canada $ In our 2017 report, the IEC detailed potential impressions for now that more potential In October 2017, the Israeli the extensive work devoted to every Canadian adult. This broad victims were made aware of Knesset passed legislation which combatting Binary Options fraud in awareness had two essential the warning signs. prohibited companies from trading Canada, with the goal of getting the benefits – stopping Canadians Binary Options, with an effective message to Canadians that Binary from trying Binary Options In January, Canada’s top-rated grace period of three months. Options are ‘Not Worth the Risk.’ trading, and encouraging those and longest-running documentary While the ban led to the shuttering who had been defrauded to report program W5 of countless Israel-based boiler In the months since then, the IEC it to their local regulator. aired the story Going for Broke rooms, the grace period gave the has been unrelenting in its efforts on CTV, covering Binary Options most sophisticated fraudsters to fight investment fraud on every Following Phase
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