By Staff | October 11, 2007 | Last updated on October 11, 2007
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(October 11, 2007) The Manitoba Securities Commission has ruled that mutual fund advisors in Manitoba can incorporate and receive their compensation through that corporation.

“The Manitoba Securities Commission has issued orders under each of The Securities Act and The Commodity Futures Act to provide a registration exemption to permit a closely held corporation established and controlled by a registered salesperson to receive payments of commissions or fees from the salesperson’s registered dealer,” the commission said in a statement.

The right to incorporate is something advisor groups such as Advocis have been demanding for some time. Most provinces have resisted because the Mutual Fund Dealers Association Rule 2.4.1 does not allow advisors to receive commissions in a corporate account. Currently, Ontario, British Columbia, Saskatchewan and Nova Scotia temporarily allow for advisor incorporation through the suspension of the MFDA’s rule.

The MSC outlined that there will be restrictions on the structure of the type of corporation an advisor can form. In addition, advisors who incorporate will require a written contract between the corporation and the dealer, setting out the dealer’s responsibility for any activities conducted by the corporation.

The commission says the contract is necessary to ensure that advisors cannot use a corporation to shield them from taking responsibilities for their trading or advising activities.

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IDA fines ex-advisor in Edmonton

(October 11, 2007) The IDA has imposed a fine of $40,000 on Moin Mirza for failure to cooperate with an interview by the association. Mirza had been an approved person at the Edmonton branch of Union Securities but was terminated August 8, 2005.

On the Uniform Termination Notice, Union indicated that he had been dismissed for cause and that Mirza was the subject of two unresolved client complaints alleging unauthorized trading. Subsequent filings by Union indicated possible regulatory violations by Mirza.

When the IDA pursued the matter, Mirza failed to cooperate with an interview request, contrary to bylaw 19.5, claiming that since he was no longer in the industry, he did not need to comply.

Needless to say, this did not sit well with the IDA. The IDA had initially sought a fine of $50,000, with a charge for $25,000 in costs, but considered Mirza’s clean disciplinary record to be a mitigating factor. On top of the $40,000 fine, Mirza must also pay $7,651.10 in costs.

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Dealers given access to dark pools

(October 11, 2007) Investment Technology Group has announced that its ITG Dark Algorithm is now available for Canadian equities, providing dealers with access to dark liquidity pools without information leakage.

Users wishing to trade large blocks of stock without significantly moving the market can use the system to aggregate multiple alternative liquidity destinations, in both Canada and the U.S.

“The ITG Dark Algorithm allows users to dynamically adjust their level of participation, depending on their degree of urgency,” the company explains in a release, and clients can route to ITG’s POSIT suite in the U.S.

(10/11/07) staff


The staff of have been covering news for financial advisors since 1998.