The Mutual Fund Dealers Association has issued a bulletin to clarify the obligations of its members when reporting changes to membership information.

Under MFDA rules, members have an obligation to ensure that the MFDA is informed, on an ongoing basis, of any material changes to information filed with the MFDA. The sort of events that must be reported include: bankruptcy and insolvencies; and insufficient risk adjusted capital. As well, name changes, rep terminations, and organizational changes must be disclosed.

Some material changes require prior approval by the MFDA, including: any reorganization, merger or amalgamation; any transfer or acquisition of a “significant equity interest” in a member; changes in dealer levels; and, entering into introducing/carrying dealer arrangements.

A member must notify the MFDA whenever it, or any partner, director, officer or shareholder owning a significant equity interest, is refused registration or licensing, or has its registration or license suspended. They must also report if they are charged or indicted with criminal offenses or under securities legislation.

Complaints involving allegations of theft or misappropriation of funds or securities or of forgery; civil proceedings regarding misrepresentation or fraud; and, judgements must be reported, too.