Policy
MFDA Investor Protection Fund Update
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: Gregory J. Ljubic
BULLETIN # 0131-P
Corporate
Secretary
February 28, 2005
Phone:
(416)
943-5836
E-mail:
[email protected]
MFDA Bulletin
Policy
For Distribution to Relevant Parties within your Firm
MFDA Investor Protection Fund Update
Attached to this Bulletin is an investor protection fund update for your information.
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NEWS
RELEASE
For immediate release
For further information, please contact:
Larry M. Waite
President and Chief Executive Officer
(416) 943-5887 or [email protected]
MFDA Investor Protection Corporation Application for
Recognition
February 28, 2005 (Toronto, Ontario) – The Mutual Fund Dealers Association of Canada
(MFDA) today announced that the Revised Investor Protection Corporation (IPC) Application
filed by the MFDA and MFDA IPC with relevant securities commissions requesting approval or
designation of IPC as a protection plan for customers of mutual fund dealers that are Members of
the MFDA has been published for Public Comment by the Ontario Securities Commission
(OSC). The Comment period expires on March 28, 2005.
A copy of the OSC Request for Comment is available on both the OSC web site:
www.osc.gov.on.ca and on the MFDA web site: www.mfda.ca
The Revised IPC Application contains two significant investor protection enhancements from the
original Application:
1.
Additional coverage, increased from $100,000 per customer account to $1,000,000
per customer account, and
2.
Wider range of products covered. The original IPC application filed with securities
commissions contemplated coverage for mutual fund products and cash related to
mutual fund sales and redemptions. The Revised IPC Application extends coverage to
all products held by the Member.
The MFDA and MFDA IPC encourage all interested stakeholders to provide their comments,
observations or concerns respecting the Revised IPC Application to the OSC.
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Size of IPC Fund and Assessments
The initial size of the IPC Fund will be $30 million. The MFDA will transfer to the IPC Fund
$2.5 million from the MFDA’s discretionary fund, which is the account established by the
MFDA to receive fine and penalty monies arising from MFDA disciplinary proceedings. In
addition, there will be a line of credit for the IPC Fund in the aggregate amount of $30 million
with a Canadian bank so that upon formal approval or designation of the IPC by the
Commissions full funding will be in place for the benefit of clients of Members.
Member assessments for the IPC Fund will commence after formal approval or designation of
the IPC by the Commissions. Member assessments will be based on a calculation relating to
Assets under Administration (“AUA”), averaged over the prior two years. At the outset, the
aggregate Member assessments to be paid each quarter will be $1.25 million, a figure which
represents approximately $22 – 24 per million of AUA.
The Mutual Fund Dealers Association of Canada is the self-regulatory organization for Canadian
mutual fund dealers. The MFDA regulates the operations, standards of practice and business
conduct of its 183 members and their approximately 70,000 representatives with a mandate to
protect investors and the public interest.
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(Doc# 52679)
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