MFDA censure offers critics hope

Opinion continues to stream in on what’s come to be known as Proxygate, as more industry experts air their thoughts on the matter.

Public censure may be harsh, but it presents an opportunity for the MFDA, says Sandra Kegie, executive director at the Federation of Mutual Fund Dealers. She believes cooperation could bring good results.

“Criticism, especially public, can be difficult for anyone, however we hope that the MFDA embraces the opportunity for change and draws from the deep well of experience of its members and industry trade associations like the Federation who are engaged and ready to contribute.”

Supporting the BCSC panel’s decision Kegie said that “If parties demonstrate that the hearing process works, it’s good for everyone, and gives market participant’s confidence in the system.

“We appreciate the insight and wisdom of the panel in recognizing the differences between corporate and regulatory governance and in providing guidance and direction.”

However, not everyone is counting on the MFDA’s ability to work as a team.

“They (the MFDA) are too arrogant; it’s their arrogance that got them into this in the first place,” said an industry source who’s been following the issue closely.

The source, who requested anonymity for practical reasons, stressed that the MFDA “refuse to be told what to do” and that “they could have avoided all of this if they’d done the right thing in the first place.”

The BCSC panel advised the MFDA to use a third party proxy solicitation firm, rather than MFDA staff, to solicit proxies and to keep member votes confidential from MFDA officials. The panel also directed the MFDA not to implement the amendments passed at the October 2009 meeting until the members vote on those amendments.

Kegie is pleased to see that a decision has been reached and believes that “dragging on wouldn’t have been in anyone’s best interests”, however there still remain discontented voices in some quarters that refuse to stand mute or move on.