BULLETIN #0122-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 #0122-P
Director of Policy and Regulatory Affairs
January 17, 2005
Phone: 416-943-5838
E-mail: pward@mfda.ca

MFDA Bulletin

Policy

For Distribution to Relevant Parties within your Firm

Amendments to MFDA By-law No.1 (For the Protection of Directors,
Officers and Others)

The MFDA Board of Directors enacted By-law No. 11 which sets out housekeeping amendments
to MFDA By-law No.1, on November 10, 2004. These amendments have received the requisite
approval of MFDA Members and the recognizing securities commissions and are now in effect.

By-law No. 11 sets out amendments to Section 8 of By-law No. 1 which clarify that the
indemnification and protection provisions applicable for directors and officers of the Corporation
apply to Regional Council members.

A copy of By-law No. 11, setting out blacklined amendments to By-law No. 1, is set out in
Schedule "A" below.

(doc #49386)

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SCHEDULE "A"

BY-LAW NO. 11

being a by-law amending the General By-law No. 1 of

MUTUAL FUND DEALERS ASSOCIATION OF CANADA/
ASSOCIATION CANADIENNE DES COURTIERS DE FONDS MUTUELS
(hereinafter referred to as the "Corporation")

By-law No. 1 of the Corporation is hereby amended as follows:

1.
SECTION 8:
FOR THE PROTECTION OF DIRECTORS, OFFICERS AND OTHERS

8.
For the Protection of Directors and, Officers and Others

8.1
Limitation of Liability

No director past or present member of the Board of Directors, a Regional Council (including a
Hearing Panel) or any committee or sub-committee thereof or of the Corporation, officer, employee
or agent shall be liable for the acts, receipts, neglects or defaults of any other director, officer,
employee or agentof such persons, or for joining in any receipt or other act for conformity, or for any
loss, damage or expense happening to the Corporation through the insufficiency or deficiency of title to
any property acquired for or on behalf of the Corporation, or for the insufficiency or deficiency of any
security in or upon which any of the moneys of the Corporation shall be invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any of the
moneys, securities or effects of the Corporation shall be deposited, or for any loss occasioned by any
error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatever
which shall happen in the execution of the duties of his or her office or in relation thereto; provided that
nothing herein shall relieve any director or officersuch person from the duty to act in accordance with
the Act and the regulations thereunder or from liability for any breach thereof.
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8.2
Indemnity

Every director or officerEach past and present member of the Board of Directors, a Regional
Council (including a Hearing Panel) or any committee or sub-committee thereof or of the
Corporation, officer, employee or agent of the Corporation, or and any other person who has
undertaken or is about to undertake any liability on behalf of the Corporation or any company controlled
by it, and their heirs, executors and administrators, and estate and effects, respectively, shall from time
to time and at all times, be indemnified and saved harmless out of the funds of the Corporation, from
and against:

8.2.1
all costs, charges, fines and penalties and expenses which such directorBoard,
Council, Panel, committee or sub-committee member, officer, employee, agent or other
person sustains or incurs in or about or to settle any action, suit or proceeding which is
threatened, brought, commenced or prosecuted against him or her, or in respect of any act,
deed, matter or thing whatsoever, made, done or permitted by him or her, in or about the
execution of the duties of his or her office or in respect of any such liability; and

8.2.2
all other costs, charges and expenses which he or she sustains or incurs in or about
or in relation to the affairs thereof, including an amount representing the value of time any such
directorBoard, Council, Panel, committee or sub-committee member, officer employee,
agent or other person spent in relation thereto and any income or other taxes or assessments
incurred in respect of the indemnification provided for in this By-law, except such costs,
charges or expenses as are occasioned by his or her own wilful neglect or default.

The Corporation shall also indemnify such persons in such other circumstances as the Act permits or
requires. Nothing in this By-law shall limit the right of any person entitled to indemnity apart from the
provisions of this By-law.

8.3
Action, Suit or Proceeding Threatened, Brought, etc. by the Corporation

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Where the action, suit or proceeding referred to in Section 8.2.1 above is threatened, brought,
commenced or prosecuted by the Corporation against a directorBoard, Council, Panel committee or
sub-committee member, officer, employee, agent or other person who has undertaken or is about to
undertake any liability on behalf of the Corporation or any company controlled by it, the Corporation
shall make application at its expense for approval of the court to indemnify such persons, and their
heirs, executors and administrators, and estates and effects respectively, on the same terms as
outlined in Section 8.2.

8.4
Insurance

The Corporation may purchase and maintain insurance for the benefit of any person referred to in
Section 8.2 against such liabilities and in such amounts as the Board may from time to time determine
and are permitted by the Act.

END

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