The MFDA Investor Protection Corp. (MFDA IPC) paid out almost $7 million in connection with the insolvency of W.H. Stuart Mutuals Ltd. (WHS) in fiscal 2015, according to a report released on Monday.<\/p>\n
The MFDA IPC has issued its latest annual report, which reveals that in the fiscal year ended June 30, the contingency fund for the Canadian mutual fund dealer industry paid out more than $6.3 million to investors and $546,075 in administrative costs in connection with the bankruptcy of WHS, which was suspended by the Mutual Fund Dealers Association (MFDA) and deemed insolvent by the MFDA IPC in 2013.<\/p>\n
According to the MFDA IPC’s annual report, another $853,911 has been set aside for amounts expected to be paid to claimants and administrative costs in that ongoing case. That provision includes approximately $500,000 for claims that have been approved, but not yet paid.<\/p>\n
“The MFDA IPC continues to receive WHS claims,” the annual report says. “No amounts are accrued for these new claims until the MFDA IPC makes a determination that the claims are eligible under its coverage policy.”<\/p>\n
In addition, the annual report reveals that the MFDA IPC is facing a lawsuit from a former WHS advisor and his spouse, who are seeking compensation for losses allegedly stemming from the insolvency of WHS.<\/p>\n
“The lawsuit is being defended but the outcome of the lawsuit and any possible obligation of the corporation cannot be reasonably estimated at this time,” the MFDA IPC’s annual report says.<\/p>\n
The contingency fund had an operating balance of $32.9 million as of June 30, the annual report indicates, and the MFDA IPC is aiming to boost its reserves to $50 million over the next several years. That target was adopted before the WHS insolvency resulted in claims against the fund.<\/p>\n
To reach the target, a regular annual assessment of $2.9 million is being allocated among mutual fund dealers over a seven-year period that started on July 1, 2011, the annual report says, and an additional $1.3 million assessment is being levied to reflect the payouts required by the WHS insolvency over six years, starting Jan. 1, 2015.<\/p>\n
In addition to the annual assessments, the MFDA IPC maintains a $30 million credit facility with a Canadian bank, which is guaranteed by the MFDA, the annual report says. As well, the contingency fund has placed $20 million of insurance with international insurers in case it ever faces losses in excess of $30 million.<\/p>\n","protected":false},"excerpt":{"rendered":"
The contingency fund for the Canadian mutual fund dealer industry is aiming to boost its reserves to $50 million over the next several years<\/p>\n","protected":false},"author":38954,"featured_media":286364,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2324],"tags":[2355],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/290922"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/38954"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=290922"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/290922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/286364"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=290922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=290922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=290922"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=290922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}