A proposed rule requiring firms to notify the Mutual Fund Dealers Association of Canada about the termination of reps will impose an additional burden and cost on MFDA members.

That was one of the few comments received by the MFDA about it proposed rule change. The rule was published for comment on July 11, 2003. Three submissions were received from Royal Mutual Funds Inc., TWC Financial Corp. and Performa Financial Group Ltd.

In addition to the concern about cost, there was also a suggestion that reporting to both the securities commission and the MFDA may lead to duplicate investigations.

The MFDA argues that the public interest objective of the new requirement is highly important as it involves the resolution of actual or potential risk to the investing public in a timely manner. So, while it concedes that some duplication will be required, it says that this is outweighed by the public interest.

“The MFDA will work to make it as easy as possible for members to comply with the new requirement,” the association says. It adds that the reporting will only be necessary until changes can be implemented to the NRD to generate specialized reporting, which would provide notification to the MFDA.

As for the possibility of duplicate investigations. The MFDA says that this risk already exists, in situations where CSA members provide notification, or where MFDA members report situations directly to the MFDA. “The MFDA is working with the applicable CSA members to make arrangements to avoid duplication of investigative efforts, and arrangements have been finalized in some jurisdictions,” it reports.