Mutual fund dealers will be able to continue to operate through their personal corporations until at least the end of 2008.

According to the latest OSC Bulletin, on November 3, the Ontario Securities Commission issued an order extending the suspension of Rule 2.4.1of the Mutual Fund Dealers Association of Canada that would outlaw personal incorporation. The rule was first suspended in 2001, and extended to the end of 2006.

Under the order, the MFDA rule against personal incorporation is suspended and will continue to be suspended until December 31, 2008, in BC, Saskatchewan, Ontario and Nova Scotia, subject to several conditions.

The conditions require the MFDA to co-operate with the commission and its staff in their efforts to develop amendments to securities legislation that would, among other things, allow reps to carry on securities related business through a corporation, while preserving liability.

Dealers and reps relying on the suspension must agree that any corporation will provide the MFDA and the commission access to its books and records for the purpose of determining compliance with the rules; the MFDA must ensure compliance with its remaining rules; that its members are made aware of the requirements; and, that the MFDA will not accept a member whose relationship with its reps does not comply with its rules.