CE requirement for mutual fund reps closer to reality

“The securities and financial services industry is constantly evolving with new products, services, rules and requirements,” the MFDA says in its paper. “The MFDA views training and education as important components of a robust regulatory regime.”

The lack of CE requirements for mutual fund advisors has been an ongoing concern for many industry associations, including the Federation of Mutual Fund Dealers (FMFD) and the Investment Funds Institute of Canada (IFIC), both of which are based in Toronto. In Canada, many regulators, SROs and other organizations with oversight of professionals and voluntary professional organizations have CE standards and place.

Both the FMFD and IFIC, along with several dealer firms, submitted comments and proposals to the MFDA as part of a 2014 consultation process suggesting that the SRO look into implementing a CE requirement for mutual fund reps.

In developing a CE requirement for these advisors, the following principles will be taken into account, the MFDA’s paper says:

• The content of a CE requirement should address ethical practices, compliant standards and professional development.
• The CE requirement should be feasible administratively.
• The CE requirement should not create unnecessary duplication with CE requirements of other relevant organizations to which reps may belong.
• The CE requirement should not be cost prohibitive.

The MFDA would like feedback concerning to whom a CE requirement should apply, particularly when approved persons carry out different roles at a firm. (An approved person could be a partner, director officer, branch manager, or employee of the member firm who is registered by the applicable provincial securities commission.)

The MFDA also pointed out in its paper that there are currently numerous delivery methods by which participants may obtain CE credits, including: attending conferences; completing online or classroom courses; attending in-house training; writing articles, newsletters, books or course material; and teaching/presenting or acting as an instructor. The SRO is asking for feedback and what activities and delivery methods should and should not qualify for credits.

Feedback is also being sought on whether the MFDA should provide a system for tracking individual CE credits and reporting compliance. If the MFDA doesn’t provide a tracking system, but instead provides only a mechanism to report on CE compliance, members would be responsible for developing their own systems.

Currently, advisors who hold either an insurance or securities licence are required to complete a certain number of CE credits on a regular basis. In contrast, under MFDA Rule 1.2.1, individuals who complete the Canadian Investment Funds Course are required only to complete a training program within 90 days of registration with a provincial securities commission.

Dealer firms have the flexibility to offer the 90-day training themselves or they can use external providers as long as the training is appropriate and applicable to the dealer firm’s operations.

However, once an advisor completes the 90-day training requirement, there are no further educational requirements needed to maintain his or her licence.

Comments on the discussion paper should be submitted to the MFDA on or before Sept. 21.