The Mutual Fund Dealers Association of Canada (MFDA) has proposed rule amendments that aim to clarify the limited circumstances in which reps can act under powers of attorney (POAs), or as trustees and executors for clients.
Under the current rules, reps are generally prohibited from fulfilling these roles, except when it involves a family member, such as their spouse, child, or parent. To rely on this exception, various conditions must be met, including that the client account must be assigned to another rep.
Among other things, the revisions would do away with the requirement to transfer the account to another rep. The MFDA has received feedback that this is an unduly onerous condition, the self-regulatory organization says in the proposed amendments.
The amendments aim to clarify the regulatory intent of the requirements. "The effect of the proposed amendments will be to achieve greater clarity … while preserving investor protection and effective risk controls," the MFDA says.
The proposed amendments were approved by the MFDA board of directors approved at their March 2 meeting. The comment period runs until June 8.