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

See all articles by Dan Awrey

Dan Awrey

Cornell Law School; European Corporate Governance Institute

Date Written: 2009

Abstract

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

Suggested Citation

Awrey, Dan, Principles, Prescriptions and Polemics: Regulating Conflicts of Interest in the Canadian Investment Fund Industry (2009). Dalhousie Law Journal, Vol. 32, No. 1, p. 69, 2009, Available at SSRN: https://ssrn.com/abstract=1553864

Dan Awrey (Contact Author)

Cornell Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

European Corporate Governance Institute ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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