(October 13 – 15:45 ET) – As part of the final publication of the Mutual Fund Dealers Association rule, the Ontario Securities Commission has published some responses to concerns aired in comments on the MFDA.
The OSC continues to refuse to pick up the startup costs of the MFDA, saying it considers its guarantee of the MFDA $12 million line of credit to be considerable financial support, and does not propose to fund any costs of the MFDA directly.
On the MFDA Investor Protection Fund, the OSC says that the details of the fund are being worked out by the board of the fund, not by the board of the MFDA. The commission will determine whether a public comment period is necessary for the fund once the details become available.
Some commentators argued that OSC fees should be cut once the MFDA takes oversight responsibility for dealers from the OSC. The commission points to its 2000/2001 Statement of Priorities, saying that it will develop and implement a more streamlined fee structure to align revenues more closely with its costs. A concept proposal describing the new fee structure will be published for comment.
The OSC has also rejected calls for a three-year sunset clause on the MFDA, calling it an overly cumbersome method of ensuring oversight.
The OSC rejects the complaint that stakeholders haven’t been given enough time to comment. It rejects any argument against the necessity of the MFDA.
In response to IFIC’s comment that fund companies that are also registered as dealers shouldn’t have to join the MFDA it says, the OSC will consider further what guidance can be given to advisors also registered as mutual fund dealers. The OSC suggests that they may not need to be registered after all, or it could possibly grant exemptions to these registrants.
The OSC has agreed to extend the application deadline from 30 days after recognition to 75 days so that the deadline falls after RRSP season.
-IE Staff