Provincial regulators have approved changes to Mutual Fund Dealers Association of Canada (MFDA) rules that will allow dealers greater flexibility in supervising their branch offices.
According to today’s OSC Bulletin, the regulators have approved amendments to MFDA rules that will provide fund dealers with a more flexible, principles-based approach to determining how to best supervise their branches.
The proposed amendments were published for comment in January, and the MFDA received 10 comment letters, it notes. Seven of these comments were supportive of the proposals, it says. But there were also concerns from investor advocates who worried, among other things, that allowing greater flexibility to designate off-site branch managers could have a negative impact on investor protection and make it harder to properly supervise reps.
In its response, the MFDA indicates that the rules include a list of factors to be considered when determining whether an on-site branch manager is necessary at a particular branch, or not. And, that the purpose of this list is to help determine whether, from a risk perspective, remote supervision is appropriate, or on-site supervision is required.
The proposed amendments are also intended to create a level playing field for MFDA dealers by harmonizing with requirements under provincial rules and the rules for investment dealers, which, it notes, “are not as prescriptive in respect of requirements for branch supervisory structures.”
“The flexibility permitted by the proposed amendments is not intended to reduce the level of supervision to which branches are currently subject,” it says.