The Mutual Fund Dealers Association panel that approved the regulator’s market timing settlement with Investors Group Financial Services Inc. has issued its reasons for accepting the deal.

The settlement was approved at a public hearing on December 16. The proceedings were held “in camera”, thanks to joint motion by MFDA staff and IG. After hearing the evidence and arguments in favour the settlement, the panel unanimously concluded that it was appropriate to accept the deal.

The MFDA says that in determining whether the settlement agreement should be accepted, it considered a number of factors, including: the public interest and whether the penalty imposed will protect investors; whether the agreement is reasonable and proportionate; specific and general deterrence; fostering confidence in the integrity of the Canadian capital markets, the MFDA and the regulatory process itself.

The mitigating factors include: the fact that IG co-operated in both the investigation and in the enforcement proceedings; the company made specific admissions as to its conduct; IG has adopted additional practices and procedures to prevent and detect market timing; the fact that the settlement was reached after extensive negotiation; and that IG was subject to public scrutiny as a result of the proceedings.

The panel that reached the decision was chaired by Thomas Lockwood, and included Sandy Grant and Guenther Kleberg.