The Mutual Fund Dealers Association of Canada (MFDA) reveals in a new bulletin issued on Thursday that it will be carrying out a review in 2016 along with other securities regulators that will look at sales incentives and situations in which incentives could spark conflicts of interest for dealers and their representatives.
In addition to the focus on incentives, the self-regulatory organization (SRO) indicates that it is also concerned about the prevalence of reps falsifying client signatures. More than half (38) of the 69 disciplinary proceedings that the MFDA launched in 2015 involved signature falsification, the bulletin notes. The MFDA indicates that it will be enhancing its guidance to dealers on this issue. In the year ahead
The MFDA will also be bolstering its guidance for dealers to consider when approving reps’ outside activities and for detecting undisclosed outside activity.
On the policy front, the MFDA has already signalled that it intends to develop rule proposals to govern the use of the “financial planner” title by mutual fund dealer reps.
See: MFDA to regulate reps’ use of financial planner title
In addition, the SRO says it will propose a new continuing education requirement for reps and that it will develop a proficiency standard for reps who want to trade in exchange-traded funds (ETFs). The SRO carried out consultations on each of these issues in 2015.
The MFDA also aims to propose amendments in 2016 that will clarify the prohibition on acting as a power of attorney (POA) for clients in situations in which a rep is also acting as an executor or trustee for a client.
Furthermore, the MFDA plans to publish guidance for investors to explain the changes being introduced to compensation disclosure and performance reporting under the second phase of the client relationship model reforms. The SRO will also produce a brochure explaining the move to point-of-sale delivery for mutual fund disclosure.
Finally, the MFDA says that it will be launching a redesigned website in 2016, which aims to make the website easier to use for mutual fund dealers and investors — particularly seniors.