Decisions & Orders
Mutual Fund Dealers Association of Canada [Variation Order]
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2006 BCSECCOM 653
Variation of MFDA recognition order to extend suspension of MFDA Rule 2.4.1 to December 31, 2008.
Mutual Fund Dealers Association of Canada
Section 171 of the
, RSBC 1996, c. 418
¶ 1 The Commission recognized the Mutual Fund Dealers Association of Canada (MFDA) as a self regulatory body for mutual fund dealers under section 24 of the Act on February 15, 2001, subject to certain terms and conditions. The Commission continued its recognition of the MFDA on June 3, 2004, subject to certain terms and conditions set out in Schedule A of the order. One of the terms and conditions is that MFDA Rule 2.4.1 is suspended until December 31, 2006.
¶ 2 Considering that it is not prejudicial to the public interest, the Commission orders under section 171 of the Act that the recognition order is varied by deleting section 14 of Schedule A and replacing it with the following:
14. SUSPENSION OF MFDA RULE 2.4.1
MFDA Rule 2.4.1 is suspended and will continue to be suspended until December 31, 2008, in the Provinces of British Columbia, Saskatchewan, Ontario and Nova Scotia, and during such period the MFDA shall comply with the following conditions:
(A) the MFDA shall co-operate with the Commission and its staff, including participating on any joint industry and regulatory committee struck by the Commission and its staff, in their efforts to develop amendments to applicable securities legislation that would, among other things, allow an Approved Person to carry on securities related business (within the meaning of the MFDA rules) through a corporation, while preserving that Approved Person’s and the member’s liability to clients for the Approved Person’s actions;
(B) the MFDA shall, as a condition of a member or Approved Person being entitled to rely on the suspension of Rule 2.4.1, require that the member and its Approved Persons agree, and cause any recipient of commissions on behalf of Approved Persons that is itself not registered as a dealer or a salesperson to agree, to provide to the MFDA, the Commission and the applicable member access to its books and records for the purpose of determining compliance with the rules of the MFDA and applicable securities legislation;
(C) the MFDA shall ensure in connection with the suspension of Rule 2.4.1 that members and Approved Persons comply with the remaining Rules, with specific reference to Rule 1 Business Structures and Qualifications, Rule 1.2.1(d) Dual Occupations and the requirement noted above in paragraph (B);
(D) the MFDA shall ensure that members applying for membership are made aware of the requirements of Rule 1 by delivering to each applicant a copy of its Notice MR-0002; and
(E) the MFDA shall not accept a member whose relationship with its Approved Persons does not comply with the rules of the MFDA and in particular, Rule 1, unless the MFDA has granted exemptive relief to that applicant under the authority granted to the Board of Directors under section 38 By-law No. 1.
¶ 3 November 14, 2006
Brent W. Aitken
British Columbia Securities Commission