Financial Products and Services

Overview

The evolving and increasingly complex legislative and regulatory environment governing financial products and services and their distribution, as well as the high stakes for clients, require specialized expertise from the professionals working in this field.

Our team of lawyers in the Financial Products and Services Group can advise you on all the legal issues relating to the financial products and services industry – particularly the registration of firms and other entities, regulatory compliance of financial products and services, the development of new and innovative products, and the compliance and governance of registrants – while also providing assistance with inspections by the regulatory authorities, compliance reviews, investigations and regulatory procedures.

We regularly plead before the civil courts and regulatory agencies and advise and assist our clients in litigation and search and seizure matters. In addition, we offer training to the various participants and practitioners in the financial sector, particularly on the duties and obligations of representatives.

Our professionals serve a wide range of clients in the financial sector, including insurance companies (damage insurance, life insurance and reinsurance), agents, insurance brokerage firms and investment advisors.

Lavery’s seasoned lawyers can offer you a broad range of integrated services to help you successfully complete your transactions and market novel financial products and services. We also offer preventative advice and can defend you in any dispute, with a deep understanding of various types of files, whether it be a disciplinary matter, a regulatory compliance issue or a professional liability matter. The experience we have acquired in dealing with regulators, our multidisciplinary approach, and our collaborative work with members of the firm in other practice areas – such as securities, mergers and acquisitions, banking services and tax – enable us to quickly mobilize a team of specialized lawyers to help you achieve your objectives and find the optimal solution to your situation.

Services

  • Incorporate, organize, and register all types of financial services providers, including banks, insurance companies, trust and loan companies, agents, brokers, and other financial services groups, whether regulated or not
  • Create new financial products for consortiums of insurers, mutual insurance companies, and captive insurance and reinsurance companies
  • Merger, acquisition, reorganization, and sale of financial institutions or other entities working in the financial products and services distribution field
  • Assistance in matters of regulatory compliance and oversight
  • Drafting, translation, interpretation, and compliance analysis of insurance, agency, and brokerage contracts and reinsurance agreements
  • Setting up of financial services networks
  • Strategic alliances and outsourcing agreements
  • Electronic commerce, Internet, and advanced technology, including joint ventures between technology providers and financial services providers
  • Protection of personal information and issues relating to tied-selling
  • Branches and representative offices of foreign institutions
  • Representation before regulatory agencies, obtaining of authorizations, certifications, and permits, and filing of registrations
  • Acting for financial services firms in the event of legislative changes and important initiatives resulting from government policies
  • Securities law and the laws governing capital market infrastructures
  • Litigation involving regulated entities such as financial institutions, securities dealers, insurance firms, and their representatives
  • Class actions
  • Opinions concerning insurance coverage
  • Services relating to regulations and services to corporations

Our major clients

  • American Income Life Insurance Company
  • Assurant Solutions
  • Bank of Montreal
  • National Bank of Canada and its subsidiaries (National Bank General Insurance, National Bank Life Insurance Company, National Bank Insurance Firm, National Bank Financial, National Bank Trust)
  • CNA Canada
  • Chambre de la sécurité financière
  • First Canadian Title Company Limited
  • Manulife Financial
  • Sun Life Financial
  • Fondaction CSN
  • Fondation Universitas du Canada
  • Professional Liability Insurance Fund of the Barreau du Québec
  • Professional Liability Insurance Fund of the Chambre des notaires du Québec
  • Global Aerospace, Inc.
  • Industrial Alliance Insurance and Financial Services Inc. and its subsidiaries (Industrial Alliance Securities Inc., Excellence Life Insurance Company)
  • Intact Assurance
  • Liberty International Underwriters Canada
  • Royal & Sun Alliance Insurance Company of Canada
  • XL Insurance Company Ltd.

Our major achievements

  • Purchases and divestitures  of national and foreign trust, leasing, and information technology entities and their retail branches, as well as transfers of mortgage and credit card loan portfolios by a Canadian bank
  • Acquisitions by insurance companies of Québec registered insurance firms to expand their distribution network
  • Advising a portfolio manager on how to structure and implement the contractual framework required to carry on sub-management activities of equity portfolios
  • Spin-off of shareholder management services by a trust company
  • Structuring the offering of banking products and services within a financial conglomerate primarily specialized in life and health insurance and mutual funds distribution
  • Acquisition of a trust company by a federation of financial services cooperatives and conversion of this company into a financial services cooperative
  • Establishing a joint venture between a P&C insurance company and a Canadian bank for direct selling of insurance products
  • Structuring the life and health insurance business of a Canadian bank
  • Re-engineering the product suite of a professional liability insurance fund
  • Compliance audits for insurance companies and Québec registered insurance firms
  • Development of additional warranty programs for automobiles and other movable property
  • Providing representation as agent general in Québec to numerous insurance and reinsurance companies
  • Acting for securities firms, mutual fund dealers, portfolio managers, investment fund managers, and their representatives in disciplinary matters
  • Acting for entities charged with contravening UMIR, market manipulation, insider trading, etc.
  • Training programs for securities dealers’ regulated personnel and representatives
  • Partial demutualization and conversion of a mutual life insurance company into a mutual management corporation controlling a capital stock life insurance company
  • Advising regulators, self-regulatory organizations, and various industry participants and stakeholders regarding legal and policy issues associated with the online distribution of insurance products
  1. Amendments to the Charter of the French Language: Impacts on the Insurance Sector

    Bill 96 – An Act respecting French, the official and common language of Québec (the “Act”) - was adopted on May 12, 2022 and assented to on June 1, 2022, its effective date. Certain provisions are already in force; for other provisions, a transitional period ranging from several months to three years will apply. This document provides an overview of the modifications included in the reform of the Charter of the French Language (the “Charter”) that will have an impact on various aspects relevant to insurance sector stakeholders doing business in Québec. Forming the centrepiece of the announced changes, the reform of the Charter includes strengthened oversight mechanisms governing the use of French as the language of commerce and business, as well as linguistic rights in the areas of employment and communications with agents of the State. Overseeing the language of commerce and business The reform of Section 55 of the Charter stipulates that contracts of adhesion and related documents must be drawn up in French. However, effective June 1, 2023, a French-language version of these contracts and documents must be provided to participants First Alinea of this amended section reads as follows: 55. Contracts pre-determined by one party and the related documents, must be drawn up in French. The parties to such a contract may be bound only by its version in a language other than French if, after its French version has been remitted to the adhering party, such is their express wish. The documents related to the contract may then be drawn up exclusively in that other language.1 Therefore, contractual clauses in which the parties simply indicate that they agree to be bound by a contract drawn up in a language other than French are no longer sufficient. The Civil Code of Québec stipulates that “A contract of adhesion is a contract in which the essential stipulations were imposed or drawn up by one of the parties, on his behalf or upon his instructions, and were not negotiable.”2 To qualify a contract, the importance of the negotiated terms and conditions and their connection with the contract must be analyzed. It is generally recognized that if the essential stipulations are not negotiable, the contract is a contract of adhesion, even though some less important terms and conditions may have been negotiated by the parties. This amendment codifies the interpretation adopted by the Office québecois de la langue française (“OQLF”) and the courts,3 particularly given that negotiated contracts were not covered by this provision. To remove any doubt concerning this interpretation, Bill 96 was amended so as not to extend the scope of this requirement to include contracts containing “printed standard clauses”. The insurance contract Since their essential stipulations are typically drawn up by the insurer, insurance contracts and their endorsements are contracts of adhesion, as a general rule. Therefore, the French-language version of all related documents — notices, letters, insurance product summaries — must be provided to clients before they can decide whether they will be bound by a version drawn up in another language. During the parliamentary debates, Minister Jolin-Barette commented that Section 55 of the Charter only referred to consumers and that contracts between two companies could be drawn up in the language of their choice if that was the express wish of both parties. The term “consumer”, however, is not defined in the Charter. Ambiguity remains as to whether the Minister’s comment only referred to contracts containing standard clauses or whether contracts of adhesion were included. We will have to wait for the publication of the interpretation bulletins and the annotated edition of the act to determine whether Section 55 of the Charter applies to commercial insurance policies. In the meantime, we are of the opinion that if Québec lawmakers had wanted to exclude commercial contracts of adhesion, they would have expressly done so by means of an amendment. Insurance contracts in effect before June 1, 2023 will not have to be translated, nor will insurance contracts renewed without modifications since under those circumstances, the contract would not be regarded as a new contract.4 However, if an existing insurance contract is renewed with significant modifications, it will be regarded as a new contract and the French-language version thereof must be provided to clients so they may validly express their wish to be bound by a contract drawn up in a language other than French. Given that in most cases, insurance contracts are sent out to policyholders by regular mail or email, effective June 1, 2023, insurers, agents or brokers, as applicable, will have to send both the French-language and English-language versions of the contract in the same mailing or simply send the French-language version thereof. It is important to note that the Act provides for an exception to the requirement to provide the French-language version if: The insurance policy has no equivalent in French in Québec; and The insurance policy is originates from outside Québec or is not widely available in Québec.5 [unofficial translation] In all likelihood, this exception will only apply to highly specialized insurance products and will be interpreted restrictively given the Act’s primary objective. Unlike insurance contracts and related documents, invoices, receipts, discharge notices and other similar documents may be sent out in English if the French-language version remains available on terms that are at least as favourable.6 Services and marketing in French The Act introduces the Charter’s new Section 50.2, which states that businesses must respect consumers’ fundamental linguistic right to be informed and served in French. The same section reiterates this requirement with respect to “a public other than consumers” to whom are offered goods and services and who must henceforth be informed and served in French by businesses. Unlike consumers, however, clients who are businesses do not enjoy a fundamental linguistic right protected by the Charter. As regards marketing, the addition of the words “regardless of the medium used” to Section 52 of the Charter confirms that marketing documents in “hard copy” format must be in French, as must websites. If a version is available to the public in a language other than French, the French-language version must be available on terms that are at least as favourable. This provision took effect on June 1, 2022. Chat-type platforms or those facilitating direct communications with the insurer should make it possible for members of the public to communicate with the insurer’s representatives in French at all times. Communications with insurance agents and brokers Effective June 1, 2022, insurers are required to communicate in French with insurance agents and brokers who express the desire to do so.7 In addition, all information documents sent to insurance agents and brokers regarding underwriting or claims must be in French if they so wish. As regards contractual agreements between insurers,  insurance agents  and brokers, the need to provide a French-language version depends on the nature of the contract, i.e. whether it can be qualified as a contract of adhesion. French in the workplace Effective June 1, 2022, all companies doing business in Québec must comply with the following requirements in the area of employment rights: Respect employees’ right to work in French8; Use French in all written communications sent to employees; Ensure that all offers of employment, promotion or transfer; individual employment contracts; employment application forms; and documents concerning employment conditions and training sent to employees are drawn up in French;9 Take all reasonable means to avoid requiring employees to have knowledge  or a specific level of knowledge of a language other than French for employees to obtain employment or to maintain their position, including in particular:   Assess the actual needs associated with the duties to be performed; Make sure that the language knowledge already required from other staff members was insufficient for the performance of those duties; Restrict as much as possible the number of positions involving duties whose performance requires knowledge of or a specific level of acknowledge of a language other than French.10 It should be noted that individuals whose employment contracts are currently drawn up in English have until June 1, 2023, to ask their employer to translate their contract. Effective June 1, 2025, businesses with 25 employees or more in Québec must meet additional francization requirements for their Québec employees to obtain a francization certificate, including: Registering with the OQLF; Submitting an analysis of the status of the French language within the business; Putting in place a francization program within three months following an OQLF request to that effect. The above requirements were already in effect for businesses with more than 50 employees in Québec. French as the language of the civil administration The Act includes various modifications with respect to French as the language of the civil administration. The Québec government will be required to make exemplary and exclusive use of French, with certain exceptions. Effective June 1, 2023, all agents of the State and provincial government bodies will be required to communicate in French with all persons, including business representatives. All documents exchanged with the civil authorities, as well as all contracts and permits, must be drawn up in French. Insurance sector stakeholders outside Québec should expect to receive more communications in French from the Autorité des marchés financiers (“AMF”) given that the AMF is a body of the “civil administration”. Penalties It should be noted that new powers will be granted to the OQLF enabling it to conduct investigations and impose administrative and disciplinary penalties. As regards infractions of the Charter’s provisions, the Act provides for fines ranging from $3,000 to $30,000 for businesses and from $700 to $7,000 for individuals. These fines are doubled for a second offence and tripled for further offences. In addition, if an infraction continues for more than one day, each day constitutes a separate infraction. If an infraction is committed by a corporate director or officer, the Act provides for fines ranging from $1,400 to $14,000. Questions of interpretation Various provisions have raised questions of interpretation that are still difficult to resolve at the time of writing. Interpretation bulletins and an annotated edition of the act will be published by the provincial government with a view to guiding businesses in the application of the Act; they will also help to clarify certain provisions that remain ambiguous for the time being. For further information on changes concerning trademarks, please consult a recent publication by our colleagues specializing in intellectual property. Sec. 55, Para. 1 of the Charter. Civil Code of Québec, CQLR ch. CCQ-1991, Sec. 1379, Para. 1. Westboro Mortgage Investment vs. 9080-9013 Québec inc., 2018 Superior Court of Québec 1. Leave to appeal dismissed 2019 Court of Appeal of Québec 1599. Didier LLUELLES, Droit des assurances terrestres, 6th ed., Montréal, Éditions Thémis, 2017, Para. 186. Sec. 21.5 and Sec. 55 of the Charter. Sec. 57 of the Charter. Sec. 50.2 of the Charter. Sec. 5 and Sec. 50.2 of the Charter. Sec. 41 of the Charter. Sec. 46 of the Charter.

    Read more
  2. Bill 150 and the distribution of financial products and services

    On October 31, 2017, Québec’s Finance Minister, Carlos J. Leitão, introduced Bill 150, An Act respecting mainly the implementation of certain provisions of the Budget Speeches of 17 March 2016 and 28 March 2017 (“Bill 150”). In this newsletter we will discuss the changes made to the Civil Code of Québec (“CCQ”), the Act respecting insurance, c. A-32 and the Act respecting the distribution of financial products and services, c. D-9.2 (“Distribution Act”) affecting the offer and distribution of insurance products. According to the Minister’s speech upon introduction of Bill 150, the main amendment that would affect products themselves would be to permit group damage insurance contracts. Other proposed amendments affect the offer and distribution of group insurance products. Civil Code of Québec The proposed changes to the CCQ relating to damage insurance are significant since they formally introduce the concept of group damage insurance. Until now, the CCQ provided that insurance of persons was either individual or group. The lack of a similar provision for damage insurance, along with the lack of a clear provision allowing this type of insurance, led to the conclusion that group damage insurance was not permitted in Québec. Bill 150 codifies this concept, making the following changes: Non-marine insurance may henceforth be either individual insurance or group insurance; The concept of a group damage insurance policy is introduced in article 2395 CCQ; The CCQ no longer indicates that insurance of persons is individual insurance or group insurance, which removes any ambiguity about whether group damage insurance is permitted. Act respecting the distribution of financial products and services With the repeal and amendment of several sections of the Distribution Act and the removal of the concept of adhesion, which is specific to group insurance, distribution without a representative, through a distributor, would now cover individual insurance products. In fact, Bill 150 maintains the possibility of an insurer to offer an insurance product through a distributor, namely a person who, in pursuing activities in a field other than insurance, offers, as an accessory, for an insurer, an insurance product which relates solely to goods sold by the person.1 Products deemed to be insurance products which relate solely to goods but which are not affected by Bill 150 are: travel insurance, vehicle rental insurance where the rental period is less than four months, credit card and debit card insurance, and vehicle replacement insurance as defined in the Distribution Act.2 The section of the Distribution Act3 that provides that debtor life, health and employment insurance and investor life, health and employment insurance are deemed to be an insurance product which relates solely to goods and to which clients adhere is repealed. Such changes suggest that participation in group insurance products offered by insurers, whether in damage insurance or insurance of persons, is no longer covered by the rule respecting distribution other than through a representative.4 The changes made by Bill 150 relating to the definition of representative in insurance of persons5 also indicate that participation in a group insurance contract would no longer be reserved for representatives in insurance of persons, meaning that group insurance contracts could henceforth be offered directly. Act respecting insurance Along with the changes made to the Distribution Act, the Act respecting insurance is amended to provide that an insurer who enters into a group insurance contract must deliver to the client a document intended for participants, in respect of the sound and prudent management practices and commercial practices insurers must adhere to.6 The information set forth in this document is intended to disclose to participants, in a timely manner, information relevant for making an enlightened decision and for the performance of the contract. The information from this document is somehow similar to what must be included in the distribution guide for insurance products distributed without a representative: 1) the scope of the coverage considered and any exclusions; 2) the time limits, in conformity with the Civil Code, within which the insurer must be notified of a loss and the time limits within which the insurer is required to pay the insured sums or the indemnity provided for; 3) the information necessary for filing a complaint with the insurer referred to in section 285.29 of the Act respecting insurance, which provides for the policy in respect of the examination of complaints and resolution of disputes every insurer must establish in order to provide equitable resolution of complaints. Since the documentation prescribed by article 2401 CCQ remains the same, insurers must also give the client the insurance certificates which the client must distribute to participants, and issues the group insurance policy to the client, who must make it available to participants and beneficiaries wishing to examine or make copies of it. Finally, the proposed changes also introduce an increased level of liability for an insurer entering into a group insurance contract with a client that is affiliated with the insurer or that belongs to the insurer’s group, such as a federation and the mutual insurance associations that are members of it.7 Not only must the insurer deliver an explanatory document to participants, it must also ensure that the client delivers it to participants. The insurer is liable for the acts performed by or on behalf of the client toward enrolling participants under the group insurance contract.8 The amendments proposed by Bill 150 are in addition to those set out in Bill 141,9 which reforms, extensively, Québec’s financial sector. Lavery’s experts can help you position yourself competitively and seize new strategic opportunities resulting from these fundamental changes in the financial sector.   Section 408 of the Distribution Act. Section 424(5) of the Distribution Act. Section 426 of the Distribution Act. Title VIII of the Distribution Act. Section 238 of Bill 150 and section 3 of the Distribution Act. Sections 222.1 and 222.2 of the Act respecting insurance, c. A-32. Section 1.5 of the Act respecting insurance, c. A-32. See section 235 of Bill 150. See Lavery’s October 5, 2017 newsletter entitled “Comprehensive reform of the rules governing the regulation and operations in the Québec financial sector”.

    Read more
  3. Bill 150 and damage insurance brokerage

    On October 31, 2017, Québec’s Finance Minister, Carlos J. Leitão, introduced Bill 150, An Act respecting mainly the implementation of certain provisions of the Budget Speeches of 17 March 2016 and 28 March 2017 (“Bill 150”). In this article, we will discuss the changes made to the Act respecting the distribution of financial products and services (the “Act”) relating to damage insurance brokerage. The following is a summary of the main changes to the Act involving damage insurance brokerage based on Minister Leitão’s speech introducing Bill 150. New rules for products’ offering, firm registration and disclosure Damage insurance brokers will be required to offer clients products from at least four insurers that do not belong to the same financial group, namely insurers who are not affiliated with the firm. It will be interesting to hear comments from damage insurance brokers about the implementation of this new rule, which benefits consumers and will increase transparency. Note that a broker who is unable to offer clients insurance products from at least four insurers may nonetheless continue offering insurance products but must make every effort to comply with this rule and keep on file any information proving these efforts were made. The Autorité des marchés financiers (the “AMF”) may verify compliance with this provision during an inspection and require that a firm and its representatives change their registration to that of an agency if the broker’s “efforts” are considered insufficient. This exception to the new obligation to offer products from at least four insurers seems to require that brokers be able to prove to the AMF that they have made the required efforts to offer a client an insurance proposal from at least four insurers. Registration of a damage insurance firm will be made based on its representatives’ registration categories: a firm will be a damage insurance agency if it acts through damage insurance agents; a firm will be a damage insurance brokerage firm if its acts through damage insurance brokers. A damage insurance agent offers damage insurance products to the public on behalf of a firm that is an insurer or is bound by an exclusive contract with a single insurer. A damage insurance broker offers a range of damage insurance products directly to the public from several insurers and, under Bill 150, from at least four insurers, by client proposal. Firms will be subject to new disclosure requirements on their website and in their communications with clients: a damage insurance agency will be required to disclose the name of the insurers with which it is bound by an exclusive contract and which products are included in such contract; and a damage insurance brokerage firm will be required to disclose the name of the insurers for which it offers insurance products. Ownership of damage insurance brokerage firms The 20% rule is maintained but in a different form. Consultations pertaining to the 20% rule were held in the spring of 2017.1 During these consultations, the industry was asked to comment on the need to maintain this rule and on possible alternatives for managing conflicts of interest between damage insurance brokerage firms and insurers. According to the changes proposed in Bill 150, registration as a damage insurance brokerage firm is prohibited if a financial institution, financial group or legal person affiliated with them has a significant interest in the firm’s decisions or equity. “Significant interest” means: with respect to a firm’s decisions, the power to exercise 20% or more of the voting rights attached to the shares issued by the firm; and with respect to a firm’s equity, holding shares issued by the firm that represent 20% or more of its equity capital. Section 148 of the Act, which prohibited a financial institution, financial group or a legal person affiliated with them from holding more than 20% of the voting rights or shares of a damage insurance firm acting through a damage insurance broker, is repealed. The legislator specifies that the 20% rule under Bill 150 does not prohibit any financing agreement or any service contract between a financial institution and a firm. Recall that in 2007, the AMF published a staff notice2 concerning the ownership of damage insurance brokerage firms which said that, to ensure that firms remained independent, a financial institution could not sign a financing agreement with a firm unless the terms of such agreement were those that would be agreed to by a lender at arm’s length. The changes proposed by Bill 150 are in addition to those set out in Bill 1413, which proposes an extensive reform of the laws governing Québec’s financial sector. Our financial products and services team can help you take a strategic position to benefit from new business opportunities that will result from the new rules and answer any questions you may have about these changes.   See Need to know newsletter of April 18, 2017 entitled “Consultation on the 20% Rule”. Avis du personnel relatif à la propriété des cabinets en assurance de dommages [staff notice regarding the ownership of damage insurance firms] (in French only), AMF Bulletin: 2007-02-16, Vol. 4 No. 07. See Lavery’s October 5, 2017 bulletin entitled “Comprehensive reform of the rules governing the regulation and operations in the Québec financial sector”.

    Read more
  4. Comprehensive reform of the rules governing the regulation
    and operations in the Québec financial sector

    On October 5, 2017, Québec's Minister of Finance, Carlos J. Leitão, has tabled Bill 141 in Québec's National Assembly. The Bill, which is 470 pages long and includes some 750 sections, is entitled An Act mainly to improve the regulation of the financial sector, the protection of deposits of money and the operation of financial institutions. It proposes a major overhaul of the rules governing the operation of deposit-taking institutions and insurance companies, as well as the distribution of financial products and services (“FPS”) in the province. The Bill proposes amendments to the following laws: Act respecting insurance (repealed) Professional Code Act respecting trust companies and savings companies (replaced) Act respecting financial services cooperatives Act respecting the Mouvement Desjardins (repealed) Deposit Insurance Act (renamed Deposit Institutions and Deposit Protection Act) Derivatives Act Money-Services Businesses Act Automobile Insurance Act Act respecting the Autorité des marchés financiers (renamed Act respecting the regulation of the financial sector) Act respecting the distribution of financial products and services Real Estate Brokerage Act Insurers Act (enacted) Securities Act Based on the Minister's speech unveiling the Bill, the following is a summary of the 13 main categories of measures provided for in that draft legislation: Insurance — The Insurers Act is proposed as a replacement for the Act respecting insurance. It contains provisions governing the supervision and control of insurance business and of the activities of authorized (former permit holding) Québec insurers, as well asprovisions governing the constitution, operation and dissolution of Québec-incorporated insurers. The new Insurers Act also updates the rules applicable to the insurance activities of self-regulatory organizations (“SROs”), including professional orders. Financial services cooperatives — The Bill amends the Act respecting financial services cooperatives (essentially, credit unions which are members of the Groupe Coopératif Desjardins) to specify, among other things, rules relating to the organization and functioning of such cooperatives. The Bill adds a chapter concerning the Groupe coopératif Desjardins in replacement of the Act respecting the Mouvement Desjardins, which will be repealed. Deposit insurance — The Bill amends the Deposit Insurance Act and puts in place a new framework to supervise and control the deposit-taking business and authorized deposit-taking institutions in Québec. It includes provisions allowing for the resolution of problems arising from the failure of such an institution when affiliated to a cooperative group. The title of that Act is also changed to reflect the amendments made to it. Trust companies — The Act respecting trust companies and savings companies is replaced by a new legislation bearing the same title, but which redefines the regulatory framework governing those kinds of companies and their business. This framework is consistent with the new legislation to be applied to insurance companies and deposit-taking institutions. Real estate brokerage — The Act respecting real estate brokerage is to be amended to, among other things, define the concept of real estate brokerage contract, and to transfer to the Autorité des marches financiers (“AMF”) the supervision and control of mortgage brokers in the province. Financial products and services — The Bill amends The Act respecting the distribution of financial products and services to transfer to the AMF and the Financial Markets Administrative Tribunal ("FMAT") the SRO responsibilities currently entrusted to the Chambre de la sécurité financière and the Chambre de l’assurance de dommages. It also proposes a set of amendments aimed at facilitating the online offering and distribution of FPS. Act respecting the AMF — The Bill amends the Act respecting the Autorité des marchés financiers by introducing provisions to protect whistleblowers who denounce regulatory breaches of third parties to the AMF, to establish a committee tasked with taking submissions from consumers of FPS, and to structure the FMAT in a way similar to other provincial administrative tribunals, such as the Administrative Tribunal of Québec. The Act respecting the AMF is to be renamed an Act respecting the regulation of the financial sector. Funeral expenses insurance — The Bill amends the Civil Code of Québec to permit funeral expense insurance contracts to be entered into. It also modifies the Act respecting prearranged funeral services and sepultures, to provide for a more proper regulation of such contracts. Automobile insurance — The Bill amends the Automobile Insurance Act to specify how information relating to the acquisition or renewal of automobile insurance is to be filed. Money services — The Bill amends the Money-Services Businesses Act to provide for periodic checks (every three years) to be conducted on money-services businesses by the competent local police. Derivatives — The Bill adds derivatives trading platforms to the entities regulated under the Derivatives Act. Securities — The Bill amends the Securities Act to, among other things, replace the definition of "non-redeemable investment fund", prescribe restrictions on sharing commissions for certain dealers, and provide for the suspension of prescription when an application for authorization of an action for damages is filed under that Act. Legislation administered by the AMF — Finally, the Bill amends the laws administered by the AMF (listed in Schedule I to the Act respecting the Autorité des marchés financiers) to prescribe the duration of freeze orders obtainable under those laws and to prescribe the terms of administration and distribution of amounts remitted to the AMF pursuant to a disgorgement order issued thereunder. Bill 141 thus proposes wide-ranging reforms. It embodies measures which: amount to a major overhaul of certain financial laws (Desjardins’ financial services cooperatives, trust companies, deposit insurance); aim at providing a legal basis for operations that are either currently unregulated or unauthorized by law (e.g., the offering or distribution of FPS online); incorporate certain supranational standards into Québec's regulatory framework (e.g., resolution / orderly winding up of unstable systemically important financial institutions); redeploy the exercise of regulatory, supervisory and enforcement / disciplinary functions in the financial sector; and enact numerous new specific rules, particularly in the field of insurance (reciprocal insurance unions; exemption from authorization (permits) respecting suppliers of insurance-like extended warranty products; commercial practices; etc.). The scope is far-reaching for our clients operating in the Québec financial sector, and those who wish to efficiently seize the opportunities offered by the new rules that will govern the Québec's financial marketplace. They would now want: to learn more about the measures of the Bill and the way they may affect them, to position themselves competitively or adjust their ongoing projects in preparation for what is to come; to consult to knowledgeably define new strategies and be able to effectively implement them, in compliance with the new rules; to participate, separately or jointly with others stakeholders, to the consultations that the Minister of Finance has announced would be held on the Bill by a parliamentary committee, to present their views and propose enhancements to its provisions.

    Read more
  1. Brigitte Gauthier and Luc Thibaudeau provide training for counsel at the NBC

    Brigitte Gauthier and Luc Thibaudeau, associates in the Business Law and Litigation groups, respectively, are providing a series of three training sessions for counsel at the National Bank of Canada on the impact of the Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs (the “Bill”). At the sessions, Ms. Gauthier and Mr. Thibaudeau work with National Bank of Canada lawyers on analyzing the various issues that arise under the new provisions of the Consumer Protection Act in relation to consumer credit, and other amendments to the Act proposed in the Bill. The first two sessions were held this past December and January, and the next will take place on March 1. Other meetings are planned to take place after the Government publishes the new regulations that will be put in place once the Bill comes into force.

    Read more
  2. Lavery welcomes Eric Stevenson, ex-superintendent, client services and distribution oversight at the AMF to its Business Law group

    Lavery is pleased to announce the arrival of a new partner, Eric Stevenson, who is joining the Business Law group at our Québec office. Eric’s leading expertise will increase the quality and depth of Lavery’s consulting and representation service offering, in particular with its financial sector clients and stakeholders. For Eric Stevenson, this represents a return to his roots, given that he worked for the firm prior to joining the Autorité des marchés financiers (AMF). A professional who has an outstanding reputation and whose leading expertise and keen knowledge are renowned in Québec, Canada and abroad Until just recently, Eric Stevenson was the superintendent, client services and distribution oversight at the AMF.He lead a team of 150 employees with the mandate of overseeing the activities relating to the distribution of financial services and products in Québec all in the while establishing the regulatory framework governing this sector of activities. His role also included issuing exercise rights to insurance and securities operators. Eric was also in charge of the AMF team tasked with evaluating the integrity of companies and their directors who were seeking to conclude agreements with the Québec government and granting the requested authorization, when applicable. Eric Stevenson has represented the AMF before several key organisations in particular by serving as a member of the market intermediaries’ commission of the International Organization of Securities Commissions. He also presided or took part in numerous committees of the Canadian Council of Insurance Regulators as well as served on several committees of the Canadian securities regulatory authorities. “Coming back to Lavery was an evident choice considering that the firm benefits from an outstanding reputation and the financial sector’s stakeholders regularly recognize the excellence of its integrated legal services offering”, says Eric Stevenson. “I am delighted to rejoin a consulting team that is devoted to offering a memorable client-based approach that is well-rooted in a deep understanding of the client’s actual business reality. I am also eager to help Lavery’s current and future clients benefit from my knowledge andvast network of contacts that I had the privilege to develop over the past years.” A leadership connected to the client’s business reality coinciding with Lavery’s vision “As a seasoned attorney, experienced manager and a proven strategist, Eric’s profile, rooted in the realities of the financial industry, is well suited to meet our client’s expectations. With a unique career path, Eric will leverage his leadership and know-how to play an active part in Lavery’s role as a leader of transformation in Québec’s legal market. We are especially proud of the fact that he has chosen Lavery and our Québec City office as a re-entry point into the professional services sector. Eric’s return to Lavery is a testament to the firm’s power to attract exceptional talents”, concludes Anik Trudel, Lavery’s Chief Executive Office.

    Read more
  3. Associate Laurence Bich-Carrière and partner Luc Thibaudeau, of the Litigation and Conflict Resolution group, wrapped up the Cycle de conférences 2016-2017 organized by the Fondation Claude-Masse with a presentation on “Le mythe de Sisyphe et le consommateur heureux: la nécessité d'une législation efficace en matière de crédit à la consummation”. Held at the Université de Montréal Faculty of Law on April 12, the conference cycle discussed the myths and mysteries surrounding consumer law. Ms. Bich-Carrière and Mr. Thibaudeau reviewed the bases and functioning of modern consumer credit mechanisms measured against the statistical reality of Canadian consumer debt level, and sought to identify avenues to allow access to responsible consumer credit while ensuring that the consumer goods and services sector remains financially healthy and functions effectively.

    Read more