The Mutual Fund Dealers Association has issued a bulletin explaining that it will be setting deadlines for reps to comply with rules concerning out-of-province clients.
The transition period for rectifying out of province registration situations expired on April 29. As a result, the regulator has issued a notice to advise member firms of the process that MFDA staff will follow to address cases where a firm or a rep is not registered in the jurisdiction where a client is resident.
Where MFDA staff discovers firms and reps with clients located in jurisdictions in which they are not registered, the firm will be required to enter into an undertaking requiring that, by a fixed date, they must:
- either apply for the necessary dealer or individual registration in the relevant jurisdiction; or
- transfer the client account to an appropriately licensed rep.
The undertaking will also contain terms whereby the firm agrees to cooperate in a full and timely way with all requirements from staff of the relevant jurisdiction in the course of the application process, and to immediately transfer any account relating to an unsuccessful application. If there is a breach of the undertaking, the MFDA will take appropriate action, which may include the commencement of disciplinary proceedings.