The Mutual Fund Dealers Association says some member firms are violating regulations by offering advice and trading without registration.

The MFDA says that it has become aware that some of its member firms and their reps may be “engaging in activities outside the limits of their registration by providing advice and/or facilitating trades with respect to equity and certain fixed-income securities.”

Firms and reps who engage in activities beyond the scope of their registration, may be subject to disciplinary action, the association said.

It says that its staff have identified instances in which: MFDA firms and reps transmit equity and fixed-income orders on behalf of clients to investment dealers, financial intermediaries and financial institutions; firms promote the ability to offer equity and fixed-income trading services to clients; and, reps actively participate in discussions with the client and representatives of the investment dealer and provide advice on specific equity and fixed-income securities.

The MFDA says this activity has occurred with both affiliated and non-affiliated organizations. In some cases, firms maintain a supply of pre-printed trade tickets to facilitate this activity.

The regulator reminds its members that MFDA firms and reps are prohibited from advising clients about the buying or selling of equity and certain fixed-income securities without proper registration. They are also prohibited from performing any acts in furtherance of trades in securities for which they are not properly registered. This includes any act, advertisement, solicitation, conduct or negotiation directly or indirectly in the furtherance of an order to trade equity or certain fixed income securities.

Clients who wish to trade in equity and certain fixed-income securities must deal directly with an appropriately registered investment dealer.