The Mutual Fund Dealers Association of Canada (MFDA) has published a research paper on suitability, in particular providing guidance on how regulators have addressed issues of suitability through previous enforcement proceedings. This paper will be updated every two years.

Though the paper does not establish new regulatory obligations or standards, it is a useful resource for mutual fund industry participants as it canvasses, amongst other things, know-your-client (KYC) and know-your-product (KYP) obligations, as well as recommendations and disclosure.

Importantly, the MFDA emphasizes in this paper that the disclosure of material negative factors to a client is not enough to satisfy the suitability requirement, and that advisors must ensure that the client understands the risks involved, particularly where the client has relatively little investment experience.