This year has seen a major push towards getting ETFs on the shelves of MFDA-only advisors. The Canadian ETF Association (CETFA), for instance, has taken steps towards getting mutual fund dealers exchange access.
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But this won’t be enough, as the MFDA has published a proposal that would bring the SRO’s requirements into line with those of the CSA under National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations.
“Existing courses and examinations used by Approved Persons to satisfy proficiency requirements under NI 31-103 to sell conventional mutual funds do not adequately address the sale of ETFs,” notes the MFDA proposal document.
As a result, mutual fund-only reps selling ETFs would appear to run afoul of NI 31-103, which says: “An individual must not perform an activity that requires registration unless the individual has the education, training and experience that a reasonable person would consider necessary to perform the activity competently.”
The new MFDA rule would require reps to get training on characteristics and features of ETFs, as well as on how ETFs will be offered through the rep’s dealer firm.
The comment period closes September 16, 2015.