CRM2 – Conforming Amendments to MFDA Rules

• May 2013 – MFDA Bulletin issued requesting Member feedback on specific areas of NI 31-103 that require clarification

• Contacting CSA staff to ensure consistent interpretation of requirements

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CRM2 – MFDA Conforming Amendments

Conforming Amendments to MFDA Rules – 2 Phases

Phase 1 amendments: conforming changes made to Rules: 2.2.5 (Relationship Disclosure)2.4.4 (Transaction Fees or Charges)

Published for comment October 10, 2013 – awaiting CSA Approval

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CRM2 – MFDA Conforming Amendments

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• Phase 2 amendments: to be brought forward in June 2014

• Phase 2 amendments will address: Client statement requirements Performance reporting Charges and Compensation Report

Drafting Considerations

• MFDA Members – Multiple Registration

• Over 80% of Member AUA – Client Name

• Over 90% of Member AUA – Mutual Funds

• Current reporting – client statements reflect all transactions through the Member

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CRM2 –Phase 2 Amendments

•Discussion Paper to solicit preliminary comment from Members re: Scope of Client Reporting:

•2 Main Considerations:

1)All Securities (all client name)

2)Investment Products sold through the Member

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Next Steps

• April - Preliminary Consultation on scope of client reporting options

• May – Proposed Amendments – review by Policy Advisory Committee

• June – Proposed Amendments – review by Board of Directors

• Filed with CSA - Published for comment – 60 – 90 days

• Focus on Education/Guidance for Members on new requirements

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CRM Implementation Considerations

• Data Collection/Integrity/Storage

• Reliance on 3rd parties for information

• Disclosure of Securities subject to a DSC on Account Statement

• Referral Arrangements

• Performance Reporting – Money Weighted Method

• Consistency of Reporting – Members and Approved Person reports

• Electronic Delivery

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