The Ontario Securities Commission is talking to four prominent Canadian fund companies about settling possible market-timing violations, The Globe & Mail reports.

The companies, Investors Group Inc., CI Fund Management Inc., AGF Management Ltd. and AIC Ltd., are reportedly expected to settle by the end of November on charges that they allowed certain clients to conduct rapid in-and-out trades of mutual fund shares at the expense of longer-term shareholders. Those shareholders, as part of the settlement, would gain restitution.

The newspaper reports that any settlement would then set a precedent for the OSC with any future similar negotiations.

"All I can say is we’re in fruitful discussions and these discussions are obviously continuing," OSC spokeswoman Wendy Dey said.

Meanwhile, six of Canada’s largest mutual fund companies were hit this week with a class-action lawsuit accusing them of breaching their fiduciary duties by allowing market timing. The six firms include the four that the Ontario Securities Commission is examining, as well as CIBC Securities Inc. and Franklin Templeton Investments Corp. The suit is believed to be the first of its kind in Canada.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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