The Investment Industry Association of Canada (IIAC) says it approves of some aspects of the Mutual Fund Dealers Association’s (MFDA) approach to the Client Relationship Model (CRM) project, but calls for greater harmonization with the model being proposed by the Investment Industry Regulatory Organization of Canada (IIROC).

In a comment letter released today, the IIAC notes that it is pleased that the MFDA CRM has removed certain previously prescribed disclosure requirements, recognizing that they are duplicative of existing requirements; and it lauds the MFDA’s more flexible approach to the CRM.

However, it also points out that there are some fundamental differences to the approach used by the MFDA and IIROC. These include: the format of the relationship disclosure document, the content of relationship disclosure, the review of relationship disclosure materials, client acknowledgment of receipt of the relationship disclosure, and performance reporting.

“It is important that the CRM requirements are consistent and harmonized for all registrants before implementation,” the IIAC maintains. “Canadian investors should receive the same disclosure across the regulatory spectrum. Consistency of regulation across all channels is essential.”

“When dealing with registrants in the marketplace, it is imperative that these investors receive a comparable standard of protection in terms of mandated services and disclosure, regardless of whether they are dealing with a registrant under the jurisdiction of the MFDA, IIROC or the securities regulators,” it insists. “The regulators have an obligation to ensure the equity of regulatory treatment among investment dealer, securities dealer and mutual fund dealer registrants, given the substantial burden of regulatory compliance.”