The Mutual Fund Dealers Association of Canada (MFDA) says member firms should be reviewing the information they give clients about the complaint handling process, after a compliance sweep found a variety of shortcomings in the disclosure firms provide to clients.
The MFDA issued a bulletin Monday spelling out the common issues it found when reviewing fund dealers’ complaint handling documentation that must be provided to clients. It also provides guidance to firms in an effort to improve their compliance.
The regulator says that fund dealers should review their complaint handling documentation in conjunction with staff findings and … make revisions to their documents to incorporate guidance provided by staff.”
MFDA rules require dealers to provide clients with a summary of their complaint handling procedures, and a copy of an approved client complaint information form (CCIF). In the bulletin, the MFDA reports that it reviewed firms’ compliance with these requirements and found a variety of deficiencies.
For example, it says that some firms provided different versions of their summary to clients from the one available on their website. And, in some cases, the information included in these summaries differed significantly, it says; typically with the online version being less thorough. Some firms didn’t have the summaries available on their websites, or made them hard to find, it notes.
Also, it says that, in certain cases the information in the summary contained unacceptably vague contact information; doesn’t reference the MFDA or the Ombudsman for Banking Services and Investments (OBSI); doesn’t spell out possible outcomes for complaints, or adequately explain various aspects of the process.
It also found some issues with the CCIFs firms are using including: forms that use fonts that are too small and hard to read; and, information on legal limitation periods, securities commission compensation options being omitted (in provinces where that’s available, including Manitoba, New Brunswick, Saskatchewan or Quebec).