The insolvency of Markham, Ont.-based mutual fund dealer W.H. Stuart Mutuals Ltd. (WHS) in 2013 is going to cost the dealer industry about $8 million, according to a new report.<\/p>\n
The industry contingency fund, the MFDA Investor Protection Corp. (IPC) published its annual report Wednesday indicating that dealers are facing an $8 million assessment to cover the payouts to clients in the WHS insolvency, and associated administrative costs.<\/p>\n
Starting on Jan. 1, 2015, IPC members will be assessed $1.33 million over each of the next six years to recover those funds, the report indicates. This is in addition to the regular $2.9 million annual assessment required to build the fund’s resources to $50 million by mid 2018 (a plan that was put in motion back in 2010).<\/p>\n
The report notes that, as of June 30, the fund had operating fund assets of $30.3 million, which is down by $5.0 million from the previous year. There were no new insolvencies during the past year, it says; however, the bankruptcy of WHS in 2013, has resulted in approved claims of $6.8 million (as of June 30). Provisioning for those claims, along with related expenses of $800,000, caused the $5 million shortfall in 2014.<\/p>\n
Apart from the impact of the WHS insolvency, the fund’s operating expenses for the year were more or less unchanged at $1.1 million. And, it’s forecasting similar costs for 2015 (excluding any additional claims or expenses associated with the insolvency).<\/p>\n","protected":false},"excerpt":{"rendered":"
Dealers to fund MFDA IPC payouts to clients of insolvent W.H. Stuart<\/p>\n","protected":false},"author":38954,"featured_media":287065,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2312,2324],"tags":[2496,2355],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/308202"}],"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=308202"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/308202\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/287065"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=308202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=308202"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=308202"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=308202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}