The Mutual Fund Dealers Association today issued a couple of notices regarding powers of attorney, and filing requirements.
Generally, MFDA firms and reps are prohibited from accepting or acting upon a general power of attorney (POA). However, a limited exception from this general prohibition permits reps to accept a general POA from immediate family members (spouse, parent or child).
The limited exception is subject to certain compliance controls designed to minimize the potential for conflicts of interest that may arise where a rep exercises discretionary authority over a family member’s account, and the MFDA reiterates the importance of those extra controls in Member Regulation Notice MR-0031.
The controls include:
- the account be serviced by a rep other than the rep holding the POA; each trade made under a general POA or similar authorization must be reviewed by the branch manager;
- firms must have some method for identifying on their books and records accounts for which an rep holds a general POA; and
- firms must develop and maintain policies and procedures to ensure that conflicts of interest are addressed in the best interests of the client.
Bulletin #0109-M released today addresses the filing issues. The MFDA says it has been advised by registration staff at the Ontario Securities Commission that they will no longer be issuing renewal notices to registered firms reminding firms of the requirement to renew their registration and the registration of the individuals they sponsor.
As well, the MFDA will no longer accept paper format filings with reporting dates ending January 1, 2005 or later. Firms will be required to file their financial reports using the MFDA’s web-based application.