The Canadian Securities Administrators’ (CSA) latest oversight review of the Mutual Fund Dealers Association of Canada (MFDA) finds that the MFDA is fulfilling its duties as a self-regulatory organization (SRO), but flags a handful of areas for improvement in enforcement and financial compliance.
Overall, the CSA’s review of the MFDA, which was published on Friday, concludes that, apart from a couple issues, “Staff found that MFDA processes were effective, efficient and applied consistently and fairly.”
The CSA’s MFDA review — which was carried out by seven members of the CSA, including provincial securities commissions in Alberta, British Columbia, Ontario, Saskatchewan, Manitoba, New Brunswick and Nova Scotia — did not uncover any serious concerns with the MFDA meeting the terms of its recognition order.
The review, which covers the period from July 2012 to July 2015, focused on high-priority areas, including enforcement, financial compliance, policy and sales compliance; it did not cover other aspects of the SRO, such as governance, fees and business continuity.
The report suggests that the SRO needs to take a harder line against dealers in certain cases and that it should be tougher on the issue of financial advisors falsifying client signatures. It also sees some room for improvement in aspects of its financial compliance work.
Apart from the areas in which the CSA would like to see improvement, it reports that there are no concerns with the MFDA meeting its responsibilities in the areas reviewed.
The CSA says it will “continue to monitor the MFDA’s progress in resolving these findings as part of their ongoing oversight activities.”
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