The Mutual Fund Dealers Association is reminding dealer firms of the requirement to review web sites of their reps to ensure compliance with MFDA rules.
In the notice issued yesterday, the MFDA saus that its compliance examinations has made it aware of reps’ web sites that are not in compliance with its rules. In many cases, these web sites reference or promote dealer business. However, the dealer is either unaware of the existence of the web sites or has not reviewed and approved the web sites.
Other common deficiencies identified during compliance examinations include:
- no disclosure of the dealer’s name on the web site although its business is promoted;
- the web sites promote products or services that the rep is not licensed or qualified to sell;
- no disclosure of the products and services that are sold through the dealer and which products and services are being offered as an outside business activity of the rep; and
- misleading advertisements.
The notice states MFDA members must ensure that such web sites comply with the general restrictions set out in the rules regarding false or misleading advertisements and sales communications. As well, the firms should have policies and procedures and internal controls in place to ensure the handling of its business in accordance with MFDA rules.