Mutual Fund Dealers Association propose amendments to power of attorney rules

March 14, 2016

The Mutual Fund Dealers Association of Canada (MFDA) has proposed amendments to its rules dealing with general powers of attorney from a family member of a Member or an Approved Person.

MFDA Rule 2.3.1 provides that no Member or Approved Person may accept or act upon a general power of attorney or other similar authorization from a client.  There is an exception to this rule for spouses, parents and children of Approved Persons.  In order to rely on the exemption certain conditions have to be met including that the account be transferred to another Approved Person.  According to the MFDA, it is often suggested that these power of attorney requirements are onerous and difficult to justify in light of the attendant risks.  Accordingly, among other less significant changes, the requirement to transfer accounts is proposed to be eliminated.

For further information, please consult the MFDA notice setting out the proposed amendment.  Comments on the proposal are due by June 10, 2016.

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