Principles, Prescriptions and Polemics: Regulating Conflicts of Interest in the Canadian Investment Fund Industry
Dalhousie Law Journal, Vol. 32, No. 1, p. 69, 2009
40 Pages Posted: 17 Feb 2010
Date Written: 2009
Conﬂicts of interest permeate the Canadian investment fund industry. In response, securities regulators have promulgated National Instrument 81-107 Independent Review Committee for Investment Funds. In the view of securities regulators, NI 81-107 reﬂects a “principles-based” approach toward the regulation of conﬂicts of interest. This Article articulates a theoretical conception of principles-based securities regulation, one which transcends the formalism of the traditional “rules” versus “principles” debate to reveal a new regulatory paradigm. Thereafter, the author explores whether and to what extent NI 81-107 truly reﬂects this principles-based paradigm, manifesting the potential to tap into its inherent wisdom while at the same time minimizing its potential drawbacks. Having reaped the fruits of this exploration, the author concludes with a series of normative proposals respecting how securities regulators should approach both the regulation of conﬂicts of interest under NI 81-107 and, more broadly, the institutional design and implementation of future principles-based regulatory mechanisms.
Keywords: Financial Regulation, Conflicts of Interest, Principles-Based Regulation, Investment Fund Regulation
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