On June 18, 2015, the British Columbia Securities Commission (“BCSC”) published for public comment proposed amendments to MFDA Rule 1.2 (Individual Qualifications).
The proposed amendments are intended to conform MFDA Rules to similar requirements under securities legislation by adopting changes made to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”), Form 33-109F4 Registration of Individuals and Review of Permitted Individuals (“Form 33-109F4”) and the Companion Policy to NI 31-103 (“31-103CP”), in respect of requirements pertaining to proficiency and outside activities.
Under proposed new MFDA Rule 1.2.3 (Education, Training and Experience), Approved Persons must not perform an activity that requires securities registration unless the Approved Person has the education, training and experience that a reasonable person would consider necessary to perform the activity competently.
The adoption of a general proficiency principle within MFDA Rules is intended to address situations where additional education, training and proficiency may be appropriate (e.g. where Members and Approved Persons trade in investment products that have unique features, such as exchange-traded funds).
B. Outside Activity
The proposed amendments to Rule 1.2 would conform to similar changes made under securities legislation by adopting a definition of “outside activity” that includes activities involving any officer, director and other equivalent positions and positions of influence. The proposed definition is consistent with similar changes adopted under Form 33-109F4 and 31-103CP.
In addition, other amendments to Rule 1.2 have been proposed to clarify the application and scope of existing obligations under MFDA Rules in respect of outside activities.
Members and other interested parties are requested to provide comment on the proposed Rule amendments as noted above. Comments should be made in writing. One copy of each comment letter should be delivered by September 16, 2015 (within 90 days of the BCSC’s publication of the proposed amendments), addressed to the attention of: Paige Ward, General Counsel, Corporate Secretary and Vice-President, Policy, Mutual Fund Dealers Association of Canada, 121 King St. West, Suite 1000, Toronto, Ontario, M5H 3T9, and one copy addressed to the attention of: Vida Mehin, Senior Legal Counsel, Capital Markets Regulation Division, 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.html.
The proposed amendments may also be viewed on the BCSC’s website at: http://www.bcsc.bc.ca/uploadedFiles/Marketplaces/SRO/MFDA/Proposed%20Amendments%20to%20MFDA%20Rule%201%202,%20June%2018,%202015.pdf?