MFDA proposes amendments to regulations re client property, transaction fees and records

Posted on June 25, 2010

The Mutual Fund Dealers Association of Canada (MFDA) proposed amendments today that would remove the existing obligations in MFDA Rule 3.3.2 to hold client cash for investment in mutual funds separately from client cash for other investments. According to the MFDA, however, the protection of client assets would not be impacted as existing requirements to segregate client cash held in trust from Member property would be maintained. The amendments are being proposed in anticipation of similar changes to National Instrument 81-102 Mutual Funds.

Meanwhile, amendments were also proposed to MFDA Rule 2.4.4 regarding transaction fees or charges and Rule 5.1 respecting the requirement for records, in order to require MFDA members to inform investors of transaction fees or charges prior to the acceptance of their order.

Comments are being accepted on the proposed amendments to Rule 3.3.2 until September 24 and until September 23 with respect to the proposed amendments to Rules 2.4.4 and 5.1.

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