Contact: Stacey Shein
Legal & Policy Counsel
March 30, 2011
For Distribution to Relevant Parties within your Firm and Audit Firm
Electronic Delivery of Account Statements
National Instrument 31-103 Registration Requirements and Exemptions (“NI 31-103”) requires
mutual fund dealers to deliver account statements to clients at least once every three months for
both client name and nominee name accounts. MFDA Members will have to comply with the
quarterly delivery requirement by September 28, 2011. In addition, pursuant to NI 31-103,
Members that are also registered as exempt market dealers are required to deliver an account
statement to a client at the end of the month where a client has requested this or where a Member
has sold a security during the month under the exempt market dealer license.
The increase in frequency of the account statement delivery requirements under NI 31-103 has
prompted Members to request guidance from MFDA staff with respect to sending account
statements to clients by electronic means.
The responsibility to send account statements to clients is a fundamental regulatory obligation. In
addition to securities legislation and MFDA Rules that Members must adhere to, delivery of
documents by electronic means also gives rise to privacy legislation issues. Accordingly, it is
recommended that Members, and/or their back-office service providers, meet with MFDA staff
before sending documents electronically. Members and/or back-office service providers that
would like to meet with MFDA staff should contact Ken Woodard (Director, Communications
and Membership Services), (416) 943-4602 or firstname.lastname@example.org.
In assessing Member compliance with regulatory requirements, MFDA staff will consider:
• Member procedures to ensure the confidentiality, security and integrity of client
information that is sent electronically;
• Member procedures to obtain client consent to receive documents by electronic means
and the form of such consent;
• Member procedures with respect to record retention and audit trails; and
• The form and content of the electronic document (which would require samples of screen
shots) and the length of time for which the document will be made available to clients.