The Mutual Fund Dealers Association of Canada (MFDA) recently released its 2016 Year in Review and 2017 Initiatives Bulletin (the Bulletin). While the entire Bulletin is well worth the read, the Initiatives portion is particularly instructive in identifying the top areas of focus for the MFDA in the year to come.
Cybersecurity is unsurprisingly a central area of focus for the MFDA. The Bulletin references an upcoming mandatory cybersecurity risk assessment questionnaire for dealers, to be administered by an external cybersecurity consultant. As the CSA recently conducted a similar cybersecurity risk assessment, IIROC has issued report cards, and regulators of all stripes have issued cybersecurity guidance galore, firms should familiarize themselves with these initial regulatory expectations and ensure they are in compliance.
The MFDA Bulletin also confirms that suitability and know your client questions, as well as specific testing focused on the new CRM2 cost and performance reporting requirements will continue to be central areas of focus for the MFDA in their compliance exams, as will an assessment of internal controls for fee-based accounts.
Finally, in contrast to the CSA, the MFDA confirmed that 2016 was a record year for MFDA disciplinary proceedings. In particular (and as noted in a recent MFDA Notice), the practice of falsifying client signatures, whether done with the client’s consent or not, will continue to be a key focus.