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Bulletin #0291-P

Policy
Housekeeping Amendments to Form 1 - Financial Questionnaire and Report

Contact: Laura
Milliken
BULLETIN #0291-P
Director of Financial Compliance
December 20, 2007
Phone: (416) 943-5843
E-mail: lmilliken@mfda.ca

MFDA Bulletin
Policy
For Distribution to Relevant Parties within your Firm

Housekeeping Amendments to Form 1 – Financial Questionnaire and
Report

The MFDA Board of Directors and the recognizing securities commissions have approved
amendments to MFDA Form 1 – Financial Questionnaire and Report (“FQR”).

Referral Fees

A line has been added to Statement D of the FQR that will require Members to separately
disclose revenue earned from “referral fees”. The most recent version of the MFDA’s Electronic
Filing System (“EFS”) includes this new line on Statement D. However, the requirement to
disclose referral fee revenue will become effective for all filings with reporting periods ending
January 1, 2008 or later
. As a result of adding this line to Statement D, other amendments to
the FQR are required. These amendments, which are composed of additional note disclosure and
cross-referencing, are summarized below.

REFERENCE
CHANGE REQUIRED
RATIONALE
1.
STATEMENT C
LINE 2 – CHANGE REFERENCE TO
UPDATE CROSS-REFERENCE
(NOTES AND
STATEMENT D, LINE 20.
INSTRUCTIONS)
2. STATEMENT D
LINE 12 – ADD “REFERRAL FEES”
ENHANCED DISCLOSURE OF
RENUMBER LINES AND LINE REFERENCES
REFERRAL FEE REVENUE.
ACCORDINGLY.
3. STATEMENT D
ADD THE FOLLOWING NOTE:
ENHANCED DISCLOSURE OF
(NOTES AND
“12 INCLUDES ALL FEES EARNED AS A RESULT
REFERRAL FEE REVENUE.
INSTRUCTIONS)
OF REFERRING CLIENTS TO ANOTHER ENTITY
FOR PRODUCTS OR SERVICES.”

AMEND LINE NUMBERING AND REFERENCES
ACCORDINGLY.

4. STATEMENT E
LINE C(2)(A) – CHANGE REFERENCE TO D-24
UPDATE CROSS-REFERENCE
LINE C(2)(B) – CHANGE REFERENCE TO D-25
LINE C(2)(C) – CHANGE REFERENCE TO D-26

5. SCHEDULE 3
LINE A(5) – CHANGE REFERENCE TO D-22(A) UPDATE CROSS-REFERENCE
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Part II Auditors’ report

The Part II Auditors’ Report has been amended to incorporate the required changes to comply
with recent changes to Section 5600 of the CICA Handbook. The amendments are effective
immediately and have been reflected on EFS. In summary, the amendments to the Part II
Auditors’ Report are as follows:

ƒ Adding a sentence to state that the Auditors have audited Part I of the MFDA Financial
Questionnaire and Report (“Part I – FQR”). By adding this sentence, the Part II report
establishes the basis of accounting which is referenced in the Part I report.

ƒ Adding a sentence to clearly state that no additional procedures have been completed by
the auditor other than those necessary to form an opinion on the Statements referenced in
the Part I report.

ƒ Deleting the reference to questions 2 through 7 on the Certificate of Partners or Directors
(“PDO certificate”). The amendments to the Part II Auditors’ Report removes the
reference to the PDO certificate since it has been concluded that the reference no longer
applies or alternatively, the auditor has performed sufficient work to provide appropriate
audit evidence to the MFDA.

ƒ A statement has been added indicating that the additional information set out in Part II
was not intended to be prepared in accordance with Canadian generally accepted
accounting principles, and that it is not intended to be, and should not be, used by anyone
other than the specified users or for any other purpose.

DM#127576
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