MFDA rethinking investor protection fund

By Doug Watt | January 13, 2004 | Last updated on January 13, 2004
2 min read

(January 13, 2004) The MFDA is setting up a special committee to consider joining the already established Canadian Investor Protection Fund (CIPF), rather than setting up a new fund.

The creation of an investor protection fund that would protect client assets in the event of a bankruptcy was mandated by regulators as a condition of the MFDA’s start-up.

However, the MFDA says it has received many public comments suggesting it explore the possibility of joining the CIPF, set up for members of the IDA, TSX and Montreal Exchange.

The MFDA’s change of heart could also be in response to a number of negative comments about its proposed $5 million investor protection fund, which were published on the Ontario Securities Commission’s Web site last year.

“The proposal is seriously flawed and needs to be reconsidered,” said Stikeman Elliott lawyer Simon Romano in his submission.

“The introduction of another fee for mutual fund dealers at this time, in addition to the MFDA fees currently imposed, is unreasonable given the lack of benefits afforded our clients,” said BMO Mutual Funds president Edgar Legzdins.

Advisors also expressed concerns about the proposed fund, worrying that the costs would simply be passed on by dealers.

Related News Story

  • Industry criticism adds to MFDA investor protection fund delay
  • As well as forming a board committee to study the issue, the MFDA is sending a survey to members, summarizing the options under consideration.

    The MFDA has also announced a review of its own rules in an effort to uncover areas of duplication and inconsistencies with other regulatory requirements.

    Filed by Doug Watt,,


    Doug Watt