The mutual fund dealer business continues to be beleaguered by the practice of representatives falsifying client signatures in one way or another, according to an updated notice from Mutual Fund Dealers Association of Canada (MFDA) staff.<\/p>\n
The revised notice \u2014 which was released in conjunction with announcements relating to four settlements with reps that all involved signature falsification \u2014 reviews the issue and outlines the measures that firms and reps should be taking doing to deal with it.<\/p>\n
The MFDA says in its notice that it continues to find situations in which reps have, or use, pre-signed documents such as know-your-client (KYC) forms, trade forms, and cheques as well as cases in which client signatures have been falsified in other ways, such as forged signatures, cutting and pasting, or photocopying.<\/p>\n
The MFDA’s notice stresses that these activities can violate MFDA rules regardless of whether it’s done for client convenience, or whether the client consents to the falsification.<\/p>\n
The MFDA’s notice states that there doesn’t have to be a complaint or financial harm to the client to trigger a violation. Even without financial losses or client complaints, falsifying client signatures adversely affects the integrity of firms’ records and audit trails, can mislead regulators, and harm the credibility of reps.<\/p>\n
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