The Mutual Fund Dealers Association has issued a notice intended to clarify the obligations of its members and their reps with respect to joint representative codes.

The activities of each of the reps operating under a joint code are subject to all of the MFDA’s by-laws, rules and policies that apply to the conduct of dealer business generally. Where MFDA staff identify a concern with respect to a client account under a joint code, and there is no clear evidence as to which rep is responsible, all representatives to the joint code may be held accountable, it warns.

Dealers and reps are reminded that whenever a rep is called upon to service a joint code account, the rep must be aware of “the essential facts relative to the client in order to ensure that any recommendations made for the client’s account are suitable and in keeping with the client’s investment objectives.” It says that where a rep on a joint account has not been involved in the collection of know-your-client information, the rep should confirm the accuracy of the information on file with the client before making any recommendations.

Also, it notes that the dealer is responsible for, and must supervise, the conduct of reps operating under a joint code in the same manner as business conducted individually.