(September 20 – 13:00 ET) – The Ontario Securities Commission has finally released its decision in the controversial rule allowing investment dealers to employ sales representatives licensed only to sell mutual funds.
The OSC is now proposing to permit restricted registrations for up to nine months. It seeks to restrict the number of restricted reps each dealer can employ to 100 reps or 5% of the total number of reps at the dealer, whichever is lower.
The rule would have gutted the possible membership for the Mutual Fund Dealers Association, if it had gone forward as originally proposed. It would have allowed brokerages to employ mutual fund reps, possibly dealing only with the Investment Dealers Association, bypassing the MFDA.
The OSC recalled the rule from the Ontario Finance Minister’s office, where it had gone for final approval.
The Canadian Securities Administrators say that this decision is designed to protect the MFDA’s membership, but gives credence to the brokerages’ argument that there are justifiable business reasons to register restricted reps on their way to becoming full registered reps.
Comments on the latest revisions must be received by October 18.
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