Because it did not respect the rules in place, Desjardins Financial Services Firm (DCSF) will have to pay an administrative penalty of $ 1 million because of a compensation structure that favored the sale of Desjardins funds.
The Financial Markets Administrative Tribunal ratified an agreement concluded between DCSF and the Autorité des marchés financiers (AMF), the regulatory and oversight body for Quebec’s financial sector.
“The structure set up by DCSF favored the sale of Desjardins funds, as opposed to the sale of external funds. The incentive compensation plan was in effect from 2009 to 2016 and was only mandatory during 2016, as representatives were not required to join it in previous years ”, specified the AMF by communicated.
The mission of this division of the Desjardins Group is to protect the members of the caisses who acquire investment funds or obtain financial planning from one of its representatives.
“DCSF failed, during the period covered by the optional application of the incentive compensation plan (from 2009 to 2015), to keep the legally required compensation records in relation to the bonuses paid under the plan”, added the AMF by communicated.
In addition, Desjardins Financial Services Firm “failed in its obligation to monitor compliance and manage risks with regard to the risk of conflict of interest resulting from incentive compensation”.
Note that “DCSF admitted all the facts and breaches complained of”, within the framework of this agreement.