The Mutual Fund Dealers Association of Canada has published a report on the design and operation of its contingency fund.

The MFDA Investor Protection Corp. was established in 2002 and received the required approvals from the Alberta, British Columbia, Manitoba, Nova Scotia, Ontario and Saskatchewan securities commissions in May 2005.

The terms and conditions of the approval orders of the MFDA IPC required that a working group, consisting of representatives of the MFDA IPC, the MFDA and MFDA members, be established, with members of the Canadian Securities Administrators participating as observers.

The group was established in October 2005 and undertook to review a number of aspects of the MFDA IPC, including identification of risks of mutual fund dealer failures leading to investor losses, appropriate fund size, types of products that should be covered, the appropriate coverage amount per customer account, assessment methodology, long-term funding and risk management tools required by the MFDA IPC.

In a bulletin, the MFDA says the IPC has now received permission from the CSA to publish the working group’s report and the response to the report by the MFDA IPC board of directors.