The Mutual Fund Dealers Association of Canada is proposing a couple of amendments to its governance by-laws.
The British Columbia Securities Commission has published proposed amendments to the MFDA’s by-laws for public comment, which are intended to broaden the range of people that can be considered as public directors on the MFDA board, and to increase industry director participation on the regulator’s audit committee.
MFDA battles: Search for a satisfactory governance model drags on — August 2011
The regulator has concluded that the current definition of “public director” in the MFDA by-laws imposes restrictions that are too broad, and that they are inconsistent with current governance benchmarks, required regulatory policy and the standards of other self-regulatory organizations. This has made it tough to find qualified public directors.
The proposed amendments aim to ensure that there is an adequate pool of individuals who qualify as public directors, without raising conflicts of interest or other concerns about independence.
Additionally, the current composition of the MFDA’s audit committee includes only one industry director. The committee believes increased participation by industry directors would help it in assessing the needs of the MFDA and the circumstances of its firms. So it is seeking to change the by-laws to add one more industry director, and another public director in order to maintain the desired majority of public directors.
“The objective of the proposed amendments is to align the MFDA governance standards with current SRO practices and increase the number of qualified individuals who meet the requirements to act as public directors. The increase of industry directors on the audit committee will permit the committee to be more aware of mutual fund dealer industry issues and regulatory requirements,” it says.
The proposed amendments are out for a 90-day comment period, ending Feb. 2, 2012.