The Mutual Fund Dealers Association has issued a bulletin concerning its’ new complaint handling policy, and other rule amendments. The MFDA board, its’ members, and regulators have all approved the changes, meaning they are now in effect.
The MFDA client complaint policy has been amended to require firms and reps ensure that all complaints and pending legal actions are made known to the compliance officer at head office within two business days. As well, each firm must report to the MFDA whenever they, or their employees, has entered into a private settlement bigger than $25,000 for firms and $15,000 for an individual.
The amended policy also prohibits reps from entering into a settlement with a client without the prior written consent of the firm and prohibits firms and reps from imposing confidentiality restrictions on clients as part of a resolution of a dispute.
Other rule amendments now in effect include:
- an amendment which permits reps to engage in securities-related business as an employee of the bank to be carried on for the account of the bank through the facilities of the bank, rather than through the fund dealer arm;
- an amendment which clarifies that firms and reps may enter into service arrangements with other firms and reps;
- an amendment allowing reps to act upon a general power of attorney or similar trading authorization from a spouse, child or parent of the rep; and
- an amendment requiring that where a client account has been open for less than 12 months, the rate of return shown must be the total rate of return since account opening.