BCSC to continue with hearing into MFDA governance issues

Last fall the BCSC decided to hold a hearing into issues raise Partners in Planning Financial Services Ltd. concerning:

– the adoption of a new MFDA bylaw;
– the participation of certain directors in the drafting of that bylaw; and
– the proxy solicitation process used to approve the new bylaw.

However, in April, after the MFDA agreed to review certain policies, the firm formally withdrew its application. In a joint submission, Partners in Planning, the MFDA, and the executive director of the BCSC agreed that it was no longer in the public interest for the proceeding to continue.

“The resolution of this matter… provides transparent solutions to the issues identified by the commission,” they said in their submission. “Furthermore, it appears that the issues identified by the panel have become moot. In light of the agreement by the MFDA to the steps outlined above, and the current composition of the board, there is no longer a tangible dispute between the parties.”

However, the BCSC panel has decided to proceed with the hearing anyway.

“It is essential that [regulators] operate, and are seen to operate, in a manner that leaves no room to question the integrity of their governance procedures and practices. It is essential that any allegations that could raise those questions be dealt with thoroughly and openly,” the panel says.

The panel says that leaving unanswered questions about the credibility of the MFDA could impugn both its credibility and that of the regulatory system overall.

The BCSC will continue with the hearing. Although Partners in Planning will no longer have to participate, the MFDA and executive director of the BCSC are being asked for submissions on the issues raised by the firm.

A date for the hearing has yet to be set.

Larry Waite, president and CEO of the MFDA, said in an email to his staff, “I’m surprised and disappointed by the panel’s decision.”

IE