The provincial regulators have approved the Mutual Fund Dealers Association of Canada’s revisions to its rules expanding the circumstances in which it can act against fund dealers and their reps.

The latest issue of the OSC Bulletin reports that the Ontario Securities Commission has approved the MFDA’s proposal to amend its by-laws, as have the securities commissions of Alberta, Manitoba, New Brunswick, Nova Scotia and Saskatchewan; the British Columbia Securities Commission did not object to it.

The MFDA’s proposal was published for comment in October 2006 and members confirmed the amendments at the annual general and special meeting of MFDA members on Dec. 1, 2006.

“The amendments were developed to enhance the current procedures that provide MFDA staff with the ability to bring summary applications before a hearing panel for interim and permanent relief against both members and approved persons and to increase the range of situations in which such applications may be brought and the types of penalties that the hearing panel may impose,” the MFDA explains.

Submissions were received during the public comment period from the Investment Funds Institute of Canada, the Independent Financial Brokers of Canada, and Portfolio Strategies Corp.

All three commented that there is a lack of consistency between the provisions of the proposed amendments and the requirements of the Investment Industry Regulatory Organization of Canada’s rules on similar matters. The MFDA stated that although the provisions are not identical, “We believe the proposed amendments will provide hearing panels with the measures necessary to address the full range of regulatory concerns they may be called upon to determine in a flexible, timely and responsive manner.”

Among other things, the IFB also expressed the view that the proposed amendments increased the MFDA’s powers over reps exceeding any reasonable, demonstrable need. The MFDA responded that, currently, it cannot proceed summarily against a rep except in the case of the non-payment of a fine. “The proposed amendments will enhance the ability of the MFDA to protect investors in circumstances where it is not reasonable or practical to proceed by way of a regular disciplinary hearing,” it said.