The Mutual Fund Dealers Association has finally reached a cooperative agreement with the Bureau des services financiers and the Chambre de la sécurité financière that will enable it to regulate its members in Quebec.

The BSF, the Chambre and the MFDA have reached an agreement which sets out the general principles on which the three organizations will cooperate in the regulation of MFDA members with operations in Québec. The cooperative agreement has been approved by the respective boards of directors of the BSF, the Chambre and the MFDA.

Thirty-eight mutual fund firms registered by the BSF are affected by this situation, including 13 that have their head offices in Québec. Approximately 18,000 certified representatives work for the firms concerned. The purpose of the agreement is to cooperate in the regulation of the 38 firms, thus avoiding regulatory duplication and ensuring public protection.

As a result of this agreement, it will not therefore be necessary for mutual fund firms that operate both in Québec (under the jurisdiction of the BSF) and elsewhere in Canada (under the jurisdiction of the MFDA) to split their operations into two separate corporations.

The agreement provides for:

  • sharing of information between the organizations;
  • joint BSF-MFDA inspections and the application of the MFDA prudential rules;
  • the application of BSF rules in matters of business conduct and sales practices in Quebec;
  • general procedures for complaint handling and enforcement, with the MFDA referring complaints to the Chamber or BSF for investigation and enforcement; and
  • the goal of substantially similar rules and regulations.

In order for this agreement to be effective, the MFDA must have it approved by the various recognizing securities commissions across Canada; and the BSF, after receiving the opinion of the Quebec Securities Commission, must have it approved by government authorities.

The 38 firms located in Quebec to which the agreement applies will be informed by the BSF and the MFDA in the next few months of the coming into force of the new agreement and its details.