BCSC compliance exam revealed repeat deficiencies at Vancouver portfolio manager
Vancouver – A Vancouver portfolio manager has agreed to pay the B.C. Securities Commission (BCSC) $30,000 and to provide reports of its compliance system and operations from a compliance consultant, after a BCSC examination revealed significant repeat deficiencies.
The BCSC’s 2020 compliance examination of Lee, Turner & Associates (LTA), which followed examinations in 2004, 2010 and 2015, found that the firm:
- Didn’t maintain current know-your-client (KYC) information
- Didn’t have evidence of:
- Current KYC information to support suitability assessments
- Implementing suitability policies and procedures, and
- Monitoring and rebalancing of client portfolios
- Produced inadequate client statements and reporting
- Failed to have an updated and current policies and procedures manual
- Failed to establish a proper process to ensure that buyers and sellers agree on the details of transactions
- Had an inadequate process to ensure that trades among clients were done in a fair and timely manner, and
- Failed to obtain a complete auditor’s report on audited financial statements.
The BCSC also found that LTA’s Chief Compliance Officer and Ultimate Designated Person failed to adequately perform his functions.
The deficiencies violated the requirement for registrants to have controls and supervision to comply with securities laws and manage the risks associated with their business. The deficiencies also violated the requirement that registrants maintain current and accurate KYC information for clients to meet their suitability obligations.
Previously, the BCSC imposed nine terms and conditions on LTA, including the hiring of an independent compliance monitor, at its own cost. The terms and conditions were subsequently removed in November 2022. LTA has not been the subject of any client complaints, and there is no evidence of client harm or that LTA made unsuitable investments.
LTA must pay the BCSC $30,000 under the terms of the settlement. LTA also previously paid the BCSC $23,000 for the cost of the compliance review.
About the B.C. Securities Commission (www.bcsc.bc.ca)
The B.C. Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital.
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