MFDA publishes leveraging supervision guide
The Mutual Fund Dealers Association of Canada (MFDA) recently published a Leverage Supervision Guide to assist its members in meeting their suitability requirements pursuant to MFDA Rule 2.2.1(c).
Pursuant to MFDA Rule 2.2.1(c), MFDA members and approved persons must use due diligence to "ensure that each order accepted or recommendation made for any account of a client is suitable for the client and in keeping with the client's investment objectives". Suitability guidelines were released in April 2008 by the MFDA and the recently-published Guide is intended to provide further guidance and recommended best practices on developing leverage policies and procedures, analyzing practices, maintaining appropriate documentation and supervision of leverage recommendations.
On April 6, meanwhile, the MFDA published revised leverage risk disclosure, which its members must start providing to clients as of July 1.
