(February 1 – 09:15 ET) – The Federation of Independent Mutual Fund Dealers is making a last ditch appeal to Ontario’s Finance minister, Ernie Eves, to get the securities commissions to pick up the startup cost of the Mutual Fund Dealers Association.

In a letter from FIMFD executive director, David Butler, the dealers ask for Eves’ support in getting the securities commissions, “to pay the full cost to set up self-regulation of mutual fund dealers in Canada”.

Butler argues that fund dealers have been paying fees to the securities commissions for years, out of which the commissions were responsible for direct regulation of the dealers. Now the cost of regulation is being downloaded to the MFDA, which will be funded on an ongoing basis by additional fees to dealers.

“We feel it is extremely important that the MFDA does not start off with a huge debt before it becomes operational and we ask for your support to ensure the start-up costs are paid by recognizing jurisdictions,” writes Butler.

The MFDA has generally supported the position that the securities commissions should pick up the $12 million startup tab for the MFDA, but the commissions have refused. Regulators in Ontario, British Columbia and Alberta initially funded the MFDA through a line of credit that will have to be paid out of the MFDA’s annual budget over the next couple of years, unless something changes.
-IE Staff