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Proposed amendments to the Mutual Fund Dealers Association’s rules for limited trading authorization (LTA) have been published for comment.

The B.C. Securities Commission proposed deleting MFDA rules 2.3.2 and 2.3.3, related to the LTA form and documentation of associated trades, respectively.

An LTA form is signed by a client to authorize trades when the client’s assets are held at a fund company in the client’s name.

“The purpose of the LTA form is to protect fund companies by making dealers responsible and liable for obtaining valid client instructions,” the proposal said.

However, because the industry has standardized its LTA practices, “the regulatory concerns that gave rise to the development of the LTA form, and the adoption of rule 2.3.2, are no longer present,” it said.

The proposal also noted that¬†circumstances arising from the pandemic highlighted the concern that requiring an LTA may, in some cases, “cause unnecessary barriers by delaying execution of valid trade orders and receipt of client redemption proceeds.”

The 90-day comment period began on Dec. 24, 2020.