(June 29 – 11:35 ET) – Draft regulations proposed by the Mutual Fund Dealers Association of Canada could severely limit Canadian consumers’ freedom of choice in buying the funds they wish.
David Atwood, executive vice-president of the Independent Financial Brokers of Canada said in a press release, “Canadian consumers should be made aware that their freedom to access independent financial services advice is threatened.”
The new proposals would force all mutual funds to be sold only by employees or agents of mutual fund dealers. Independent financial advisors — who are not tied to any particular firms or products — would be regulated out of the mutual fund business.
Atwood stressed that the draft regulations “threaten the ability of many of our members to provide independent and objective advice to our clients.” Moreover, he said that Canadian consumers and their independent advisors “have not been part of the committee process which has created these new draft regulations. In our view these changes will have a serious, negative impact on the freedom of the consumer.”
Atwood said the Independent Financial Brokers of Canada has made it a priority to advise their clients, their own members, and interested third parties that the MFDA draft regulations subvert the unique and valuable relationship which exists between Canadian consumers and independent financial advisors.
He emphasized that an alternative regulatory proposal prepared and put forward by the Financial Services Commission of Ontario — which meets the concerns of both consumers and independent financial advisors — has been ignored.
“The Ontario Securities Commission is also aware of this alternative proposal. To date, there has been no formal recognition of this, or other practical alternatives to the MFDA model,” he said.
-IE Staff