SRO seeks comment on proposals to adopt client-focused reforms
Fund dealers are facing their own rule changes to implement the so-called client-focused reforms (CFRs), as the Mutual Fund Dealers Association of Canada (MFDA) lays out its proposals to adopt measures developed by the Canadian Securities Administrators (CSA).
The MFDA joined the IIROC in publishing a set of proposed changes to self-regulatory rules designed to conform to the provisions of the CSA’s landmark new effort to enhance investor protection.
In its proposals, the MFDA has taken a similar approach to IIROC by publishing two sets of amendments — so called “housekeeping” changes that are relatively minor and more significant proposals that must go out for public comment before they can be approved. The public comment proposals include changes to the MFDA’s rules on suitability, KYC/KYP and account supervision. They also cover the guidance set out in various MFDA staff notices.
While the proposals are going out for a 60-day comment period, fund dealers won’t be able to re-litigate the policy decisions made by the CSA.
Instead, the MFDA indicated that it’s seeking comments on the drafting of its own amendments to ensure that they are clear and properly applied to the business models of fund dealers.
As with the CSA’s reforms, the proposed changes will, among other things, require that fund dealers resolve all conflicts of interest in the best interests of clients and provide conflicts disclosure to clients. The MFDA’s proposals are out for comment until Jan. 18, 2021.It’s expected that the final reforms will be adopted by the end of next year.