The Investment Funds Institute of Canada is seeking comments regarding revisions to its standard Limited Authorization Form and accompanying guidelines.
The initial version was released them more than a year ago. Through the past year, IFIC has received comments from members of the industry, as well as their suggestions for improvements. Accordingly, with the assistance of an industry operational working group, IFIC has made some changes to the form and guidelines. The intention is to make them more useful and more administratively effective.
IFIC has received confirmation that the Mutual Fund Dealers Association is satisfied with the changes and will adopt the revised Limited Authorization Form and Guidelines after the industry comment period, which is to end September 14. The Form and Guidelines will be published as final by September 21.
The notable changes are:
- the types of transactions that can be processed under the form have changed, it now authorizes the dealer to complete purchases, switches within the same fund family, and redemptions on behalf of the investor;
- an additional investor signature line has been added to the back of the form;
- the acknowledgement and certification provision has changed to confirm that delivery of a certified copy of the form to the fund company is a warranty by the dealer that the form is current and enforceable;
- a “version code” provision has been added;
- the bankruptcy language in the general provisions have been enhanced;
- a preamble has been added to the guidelines to give some background about the reason for the development of the form.
The guidelines also contain an expanded discussion of the terms of use of the form.
Additionally, IFIC and the MFDA are interested in obtaining industry input on what “grandfathering” provisions, if any, should be adopted for those firms that have already existing Limited Authorization agreements in place for their clients.