The Mutual Fund Dealers Association has published amendments to its limited trading authorization form and guidelines.

The rule allows that a member or rep may accept a limited trading authorization from a client for the express purpose of facilitating trade execution. It requires that a form of limited trading authorization as prescribed by the MFDA be completed and approved by the compliance officer or branch manager and retained in the client’s file.

In consultation with members of the industry and the MFDA, IFIC recently made amendments to its Limited Authorization Form and Guidelines. The MFDA prescribes the revised form and guidelines, effective November 9.

A grandfathering provision has been added to the guidelines providing a 12-month transition period for dealer representatives to implement the new form. The guidelines must be implemented by November 9, 2002. It is expected that this 12-month transition period will provide enough time for dealer representatives to update the existing form to the new version with their clients.