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What is the Mutual Fund Dealers Association?

The Mutual Fund Dealers Association (MFDA), a not-for-profit federal corporation incorporated in June 1998, is responsible for regulating the distribution side of the mutual funds industry, that is, the people who sell mutual funds. MFDA does not regulate the funds or the fund manufactures -- this remains the responsibility of the securities commissions.

Mutual fund distributors who were already members of other self-regulating organizations at the inception of the MFDA are still regulated by that SRO. (IDA members continue to be regulated by the IDA).

While the MFDA is responsible for regulating all sales of mutual funds by its members in Canada, is does not regulate the funds or fund manufacturers. The securities commissions as regulatory bodies are responsible for the regulation of mutual funds.

The MDFA has the ability to admit members, to audit, to enforce rules and apply penalties and to set up an investor protection fund. The MFDA has five regulatory committees, which are composed of industry volunteers, with strong input from independent dealers.

Fund companies must apply to become members of the MFDA and must meet the association’s standards for the industry.

The MFDA was created to protect investors by ensuring that their investment dealer was a member of a self-regulatory organization and was adhering to rules to protect investors’ interests. Another goal in establishing the MFDA was to create more standardization in the mutual fund industry across the board.

The Investment Funds Institute of Canada (IFIC), and the Investment Dealers Association (IDA), with years of industry experience, were key players in contributing to the establishment of this organization and its knowledge base.

As a new organization, the MFDA continues to work towards improving and enhancing standards in the mutual fund industry for the protection of investors.

For more online information regarding the MFDA and a list of members, browse through their web site at www.mfda.ca.

Last revised Q2 2002