The Mutual Fund Dealers Association of Canada is proposing a series of rule amendments that are designed to respond to issues raised by efforts to reform the client-dealer relationship.

The MFDA is proposing changes to its rule that addresses the basic business conduct and client record requirements that its members must follow, including requirements to collect KYC information, ensure suitability, and other requirements. “One of the main objectives of the proposed amendments is to clarify for clients the nature of the client/advisor relationship and, in some respects, expand the disclosure to be provided to clients on account opening,” it reports.

“Proposed amendments to the existing suitability requirements are designed to help ensure that client accounts are reviewed at relevant times and remain consistent with the client’s needs and objectives,” it explains. “The proposed amendments are also intended to clarify procedures that members and [reps] must follow in order to satisfy their obligations regarding the collection and maintenance of KYC information and their obligations with respect to investment suitability and account supervision.”

It is also proposing amendments to rules dealing with client reporting. “The objective of the proposed amendments is to ensure that all clients are provided with a minimum level of information with respect to the performance of the investments in their accounts. The proposed amendments have been drafted to establish minimum standards, but also to allow for a degree of flexibility in meeting this basic objective,” it says. “The proposed amendments… are intended to clarify the supervisory obligations of members in relation to performance reporting provided directly to clients by [reps].”

The proposed amendments, which were approved by the MFDA board on May 22, are out for a 90 day comment period.