Regulators across Canada have accepted proposed amendments by the Mutual Fund Dealers Association of Canada (MFDA) that enhance its requirements, bringing the SRO’s rules in line with material elements of the Canadian Securities Administrators’ client-focused reforms (CFRs).
The MFDA’s amendments, slated to come into effect Dec. 31, were published in November 2020 and out for comment until January 2021. Only three comment letters were received, the Ontario Securities Commission said in a release said.
The MFDA’s rule adjustments include tweaks to rules around know-your-product, proficiency requirements and relationship disclosure information, among other areas. The amendments in November noted that comment was needed to ensure the rules were “clear, applicable, having regard to the business and business models of MFDA Members, and coherent […].”
Where the SRO’s rules will continue to differ slightly from the CFRs is where, for example, securities are mentioned broadly; since mutual fund advisors are more restricted, “investment products” is used instead. As well, the CFRs propose general know-your-client review rules, while the MFDA prefers to keep “more specific” prescriptive guidance on the timing and process around such reviews.
The MFDA has also made housekeeping rule amendments, which weren’t published for comment as they didn’t impact investors, issuers, members, registrants or the capital markets. Those also come into effect at the end of the year.
The acceptance of the MFDA’s amendments follows the approval of the Investment Industry Regulatory Organization of Canada’s similar measures, also taking effect on Dec. 31.