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BULLETIN #0206-P
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Mutual Fund Dealers Association of Canada
Association canadienne des courtiers de fonds mutuels
121 King Street West, Suite 1000, Toronto, Ontario, M5H 3T9
TEL: 416-361-6332 FAX: 416-943-1218 WEBSITE: www.mfda.ca

Contact: Paige
L.
Ward
BULLETIN #0206-P
Director of Policy and Regulatory Affairs
July 10, 2006
E-mail: pward@mfda.ca


MFDA Bulletin

Policy

For Distribution to Relevant Parties within your Firm

Exemptive Relief from MFDA Rule 3.3.2(e) (Commingling Prohibition)

MFDA staff has received several applications for exemptive relief from Rule 3.3.2(e). MFDA
Rule 3.3.2(e) prohibits Members from commingling money for mutual fund transactions with
money held in trust for the purchase and sale of other securities or financial instruments such as
guaranteed investment certificates and segregated funds (“the Commingling Prohibition”). The
Member must maintain separate trust accounts for cash received for the purchase and sale of
other securities or financial instruments. MFDA Rule 3.3.2(e) mirrors the requirements set out
in Part 11 of National Instrument 81-102 (Mutual Funds)(“NI 81-102”).

The MFDA Regulatory Issues Committee of the MFDA Board of Directors has determined that
to grant exemptive relief from MFDA Rule 3.3.2(e) would not be prejudicial to the interest of
Members, their clients or the public. Accordingly, the MFDA will be issuing a Decision
Document, which will provide exemptive relief from MFDA Rule 3.3.2(e) to all MFDA
Members that are Level 3 and 4 Dealers. MFDA Members that are eligible for the relief will be
named in a schedule to the Decision Document. As a condition of relying on the MFDA relief,
MFDA Members will be required to obtain relief from the relevant Canadian securities
regulatory authorities from the applicable provisions of Part 11 of NI 81-102. In accordance
with the Decision Document, such MFDA relief may also be relied on only as long as the MFDA
Regulatory Issues Committee has not determined that a change has occurred in the coverage of
the MFDA Investor Protection Corporation that would reduce protection to clients of Members
with respect to commingled trust moneys.

MFDA Members must notify the MFDA Membership Services Department when they apply for
relief to the relevant Canadian securities regulatory authorities from the applicable provisions of
Part 11 of NI 81-102. Members must also notify the MFDA Membership Services Department
when they receive exemptive relief from the relevant securities regulatory authorities and
provide a copy of the decision document or other evidence of such relief.

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