On September 15, 2017, certain members of the Canadian Securities Administrators released their oversight review report of the Mutual Fund Dealers Association (MDFA) for the period August 1, 2015 to January 31, 2017 (the 2017 Report). The 2017 Report followed a joint oversight review of the regulatory functions of the MFDA by Staff at six provincial securities regulators (the Review).
The Review evaluated (i) whether selected regulatory processes were effective, efficient and applied consistently and fairly, and (ii) whether the MFDA complied with the terms and conditions of recognition orders granted by securities regulators. The 2017 Report also reported on the MFDA’s progress in resolving findings from the last oversight review report published on November 18, 2016 which covered the period July 1, 2012 to July 31, 2015 (the 2015 Report).
While the CSA identified a few areas for improvement, as discussed below, the MFDA appears to have successfully resolved the “high priority” issues that had been identified in the previous report.
Summary of Findings of 2017 Report
The 2017 Report found that MFDA adequately addressed the issues raised in the 2015 Report and made significant progress in completing action plans for the findings that resulted from that report. The findings cited in the 2015 Report included two high priority findings in enforcement and one high priority finding in financial compliance.
Within the areas reviewed by Staff during the period of the Review, Staff identified:
- one low priority finding in enforcement regarding the adequacy of documentation in case files for which the MFDA’s response and plan of action was acknowledged by Staff without further comment,
- one medium priority finding in financial compliance regarding the lack of policies and procedures for the handling of repeat deficiencies. The MFDA responded with a plan of action to address the finding and a timeframe for resolution by September 2017 and follow up with Staff by February 28, 2018, and
- no findings with regard to concerns with the MFDA meeting the relevant terms and conditions of the recognition orders granted by securities regulators.
Further to these findings, the 2017 Report indicates that Staff will monitor and follow up with the MFDA’s progress in taking corrective action on the findings.