The Mutual Fund Dealers Association of Canada (MFDA) is seeking to extend the ability of fund dealers to use personal corporations for another two years, until the end of 2010, but regulators in several provinces want to see the issue dealt with sooner.

A joint notice published Friday indicates that the MFDA has submitted an application to the regulators in British Columbia, Ontario, Saskatchewan, and Nova Scotia to extend the suspension of its rule outlawing the use of personal corporations, which currently expires on Dec. 31, 2008, to Dec. 31, 2010.

The notice says that the MFDA is requesting the extension to give it time to develop proposed amendments that would allow reps to direct remuneration to non-registered corporations, subject to certain conditions.

However, the notice indicates that staff of the Ontario and Nova Scotia securities commissions and the Saskatchewan Financial Services Commission are only willing to consider an extension until March 31, 2010, with a requirement for the MFDA to submit its proposed amendments to the rule by May 31, 2009.

“These staff are of the view that a March 31, 2010 expiry date would provide sufficient time to consider the regulatory impact of proposed amendments,” the joint notice says, adding that they do not support any further extensions.

“An expiry date of March 31, 2010 would provide sufficient time for MFDA members and [reps] to restructure any commission direction arrangements… should the MFDA not submit a proposal by May 31, 2009,” it adds.

B.C. Securities Commission staff believe that an extension is necessary to allow the MFDA time to develop amendments, but they are not taking a position on the appropriate length of the extension or whether future extensions should be allowed.

Comments are due by September 29.