The Mutual Fund Dealers Association of Canada (MFDA), in its submission to the Financial Services Regulatory Authority of Ontario (FSRA) regarding proposed rule 2020-001, the Financial Professionals Title Protection rule, calls on the regulator to recognize the regulatory framework that already exists, and the role that self-regulatory organizations (SROs) play in overseeing the conduct of members and approved persons.
“A clear distinction should be made between the broader responsibility and role of the SROs as comprehensive business conduct regulators and the role of credentialing bodies in overseeing the use of the credential,” the MFDA writes. “For example, where an MFDA approved person holds a credential from another credentialing body and there are alleged violations of MFDA rules in respect of an individual title holder, SRO regulatory requirements must prevail.”
More robust complaint handling
They also say ”in light of the more robust complaint handling regimes of SROs compared to those of credentialing bodies and the availability of an ombudservice and protection plan coverage, consumers must clearly understand and be directed to the regulatory body responsible for handling their complaint.”
In its submission, the MFDA comments on FSRA’s proposed three and five year transition periods for those who wish to use the financial advisor (FA) and financial planner (FP) titles, saying the proposed transition periods would appear to be quite lengthy. “We are concerned that allowing individuals to use the titles while not meeting the credentialing criteria would undermine the objectives of the proposed rule,” they write. “We are uncertain as to why lengthy transition periods are necessary or appropriate.”
The submission also acknowledges other stakeholder submissions which have advocated for an exemption for approved persons employed by SRO members to avoid duplicative regulatory oversight and requirements. “If FSRA does not agree with such an approach, in order for approved persons to use the financial planner (FP) or financial advisor (FA) titles, the MFDA would be required to apply for recognition as a credentialing body,” they write.
“To avoid duplicative oversight, unnecessary regulatory burden for registrants and consumer confusion, it is important that the title framework be implemented in a manner that recognizes the comprehensive SRO regulatory framework already in place and the role that SROs currently play in overseeing the conduct of SRO members and their approved persons.”
