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Bulletin #0438-P

Policy
Proposed Amendments to MFDA Rule 3.3.2 (Segregation of Client Property – Cash)

Contact: Paige
Ward
BULLETIN #0438 – P
Director, Policy & Regulatory Affairs
June 28, 2010
Phone: 416-943-5838
E-mail: pward@mfda.ca

MFDA Bulletin

Policy

For Distribution to Relevant Parties within your Firm


Proposed Amendments to MFDA Rule 3.3.2 (Segregation of Client
Property – Cash)

On June 25, 2010, the British Columbia Securities Commission (“BCSC”) published for public
comment proposed amendments to MFDA Rule 3.3.2 (Segregation of Client Property – Cash).

The proposed amendments are intended to remove the existing restrictions in Rule 3.3.2 to hold
client cash for investment in mutual funds separately from client cash for other investments,
while maintaining existing requirements to segregate client cash held in trust from Member
property. In addition, the proposed amendments would permit Members discretion as to whether
they will pay interest on client cash held in trust, subject to conditions, including a disclosure
requirement on account opening, as to whether or not such interest will be paid and if so, at what
rate.

Comments should be made in writing. One copy of each comment letter should be delivered by
September 24, 2010 (within 91 days of the BCSC’s publication of the proposed amendments),
addressed to the attention of the Corporate Secretary, Mutual Fund Dealers Association of
Canada, 121 King St. West, Suite 1000, Toronto, Ontario, M5H 3T9 and one copy addressed to
the attention of Julianna Paik, Senior Legal Counsel, British Columbia Securities Commission,
701 West Georgia Street, P.O. Box 10142, Pacific Centre, Vancouver, British Columbia, V7Y
1L2.

Those submitting comment letters should be aware that a copy of their comment letter will be
made publicly available on the MFDA website at www.mfda.ca.

To view the proposed amendments, please go to:
https://mfda.ca/regulation/propAmend/Prop3-3-2.pdf

The proposed amendments may also be viewed on the BCSC’s website at:
http://www.bcsc.bc.ca/sros.asp?id=10264.

DM# 217064