Mutual Fund Dealers Association of Canada

Mutual Fund Dealers Association of CanadaAssociation canadienne des courtiers de fonds mutuels

Annual Report Raising the standard of regulation in Canada

2010

Table of ContentsJoint Message from the Chair and President

MFDA Membership Information

Corporate Governance

Regional Councils and Hearing Panels

MFDA Regulatory Operations

Compliance

Enforcement

Policy

Membership Services

Management Discussion and Analysis

Management’s Responsibility for Financial Reporting

Financial Statements

MuTual fund dealers assoCiaTion of Canada 1

The MFDA Board of Directors experienced significant change in fiscal 2009-2010,

with the introduction of six new Public Directors and one new Industry Director

between November 2009 and March 2010. The new Directors bring a variety and

wealth of experience to the Board.

The new Board and senior staff recognize the contributions of Directors who stepped

down last year and we thank George Aguiar, Martin Friedland, William Grace,

Helen Meyer, Janet Pau and Robert Wright for their dedication and leadership.

Their contributions are reflected in the Canadian Securities Administrators’ Oversight

Review Report of the MFDA, released in July 2010, which concludes that the “MFDA’s

Compliance and Policy Departments continue to guide its maturing membership

towards a culture of compliance” and notes that “Generally, the MFDA’s processes

are efficient, effective, consistent, and fair; and it has adequate staffing, resources and

training processes to perform its regulatory functions effectively and efficiently.”

While the report’s overall findings are positive and tell us that we are doing many things

right, we know that there is room for improvement and we will continue to strive for the

highest standards and best practices at every level of the organization.

As President and CEO, I welcome Rod McLeod as a new Public Director and Chair of

the Board. His legal and regulatory experience, both as a “regulator” and, laterally, as a

lawyer in private practice representing private sector business organizations impacted

by regulators, will be very helpful.

Together, we both welcome the other new Board members: Sonny Goldstein, Sandy

Grant, Lea Hansen, Dawn Russell, Doug Thomson and Janet Woodruff. The MFDA is

committed to on-going dialogue with its stakeholders and will continue to meet with

regulators, Members, investor representatives and industry associations on a regular

basis. Experience tells us that obtaining real-time information about industry practices,

concerns and problems facing Members and investors is crucial to the MFDA’s ability

to meet its regulatory goals.

We conclude by thanking the MFDA’s management and staff. Their skill, integrity

and dedication ensure that the MFDA continues to raise the standard of regulation

in Canada for the protection of investors through commitment to collaboration,

staff excellence and regulatory best practices.

Rod M. McLeod, Q.C. Larry M. Waite Chair, MFDA Board of Directors President & Chief Executive Officer

Joint Message from the Chair and President

Table of ContentsJoint Message from the Chair and President

MFDA Membership Information

Corporate Governance

Regional Councils and Hearing Panels

MFDA Regulatory Operations

Compliance

Enforcement

Policy

Membership Services

Management Discussion and Analysis

Management’s Responsibility for Financial Reporting

Financial Statements

MuTual fund dealers assoCiaTion of Canada2

The MFDA is Canada’s national self-regulatory organization responsible for regulating

the activities and operations of 139 mutual fund dealer firms (“Members”) and their

approximately 73,000 salesperson (“Approved Persons”). These Members accounted

for approximately $271 Billion of the approximately $592 Billion of client assets under

administration in the Canadian mutual fund industry as at June 30, 2010.

There are four principal categories of MFDA Membership.

• Level 1 Member - an introducing dealer that is not a Level 2, 3 or 4 Member.

• Level 2 Member - a dealer that does not hold client cash, securities or other property

(i.e. the Member does not operate a trust account and conducts business in client

name only).

• Level 3 Member - a dealer that does not hold client securities or other property except

client cash in a trust account.

• Level 4 Member - includes all other Members (including a Member that acts as a

carrying dealer).

The MFDA presently operates in Québec pursuant to a Cooperative Agreement with the

Autorité des marchés financiers and the Chambre de la sécurité financière. Accordingly,

the information set out in the tables below does not reflect Member activities based in

the province of Québec.

Mfda Membership information

number of Mfda Members by Category level (as at June 30)

2006 2007 2008 2009 2010

Level 1 Nil Nil Nil Nil Nil

Level 2 61 54 53 46 46

Level 3 69 63 64 59 55

Level 4 45 45 42 40 38


Mfda Membership Profile (as at June 30)

2006 2007 2008 2009 2010

Number of Members 175 162 159 145 139

Number of Approved Persons 69,691 71,086 73,455 74,768 73,291

Assets Under Administration of all Members $276B $310B $304B $252B $271B

Total Industry Assets Under Administration $589B $707B $700B $547B $592B

location of Member Head offices (as at June 30)

2006 2007 2008 2009 2010

Ontario 119 111 106 96 93

British Columbia 15 15 15 14 12

Québec 14 9 10 10 12

Alberta 8 8 9 8 7

Manitoba 7 7 7 7 6

Saskatchewan 6 6 6 4 4

Nova Scotia 3 3 3 3 3

New Brunswick 3 3 3 3 2

Total 175 162 159 145 139

Member assets under administration per Head office (as at June 30)

2006 2007 2008 2009 2010

Ontario $201.1B $220.3B $218.7B $175.8B $190.2B

Manitoba 46.7B 55.7B 52.4B 45.7B 48.9B

British Columbia 13.5B 16.4B 16.5B 13.6B 14.8B

Québec* 6.4B 7.8B 7.2B 9.9B 10.5B

Saskatchewan 4.4B 5.0B 4.6B 3.4B 3.5B

Alberta 3.1B 3.9B 3.8B 3.1B 2.5B

New Brunswick 0.5B 0.6B 0.5B 0.4B 0.2B

Nova Scotia 0.2B 0.2B 0.2B 0.1B 0.1B

Total (rounded) $276B $310B $304B $252B $271B * The figures reflect assets outside the province of Québec for dealers with a Head Office in Québec.


number of Members by assets under administration

2006 2007 2008 2009 2010

$100 Million and Under 79 65 69 70 65

$101 Million to $500 Million 52 51 45 36 35

$501 Million to $1 Billion 11 11 11 12 11

Over $1 Billion 33 35 34 27 28

Total 175 162 159 145 139

number of Members by firm size

2006 2007 2008 2009 2010

10 Approved Persons or Fewer 74 67 64 59 57

11 to 100 Approved Persons 57 52 50 46 42

101 to 500 Approved Persons 24 21 23 18 17

501 to 1,000 Approved Persons 6 7 7 7 7

Over 1,000 Approved Persons 14 15 15 15 16

Total 175 162 159 145 139

staff of the Mfda’s Toronto office.

Mfda VisionRaising the standard of regulation in Canada for

the protection of investors through commitment

to collaboration, staff excellence and regulatory

best practices.


Corporate GovernanceThis section contains information about the composition of the MFDA Board of Directors,

terms of office, compensation and the composition of each Committee, as well as

information regarding Directors’ attendance at Board and Committee meetings. Further

biographical information on the current Directors can be found at www.mfda.ca.

Board of direCTorsBelow is the composition of the Board of Directors as at July 1, 2010.

Public directorsRoderick M. McLeod, Q.C. (Chair) Lawyer, Part-time Counsel Miller Thomson LLP (Markham, Ontario) Joined Board: March 2010 Term expires: AGM 2012

Sandy (D.W.) Grant, CA Corporate Director (Orillia, Ontario) Joined Board: March 2010 Term expires: AGM 2011

Lea B. Hansen, CFA Corporate Director (Toronto, Ontario) Joined Board: January 2010 Term expires: AGM 2012

Dawn A. Russell, Q.C. Associate Professor Schulich School of Law Dalhousie University (Halifax, Nova Scotia) Joined Board: November 2009 Term expires: AGM 2012

Doug Thomson, FCA Corporate Director (Edmonton, Alberta) Joined Board: January 2010 Term expires: AGM 2011

Janet P. Woodruff, CA Vice-President & Special Advisor BC Hydro (Vancouver, British Columbia) Joined Board: January 2010 Term expires: AGM 2011


industry directorsEd Legzdins, CA (Vice-Chair) Senior Vice-President, Retail Investments & Managing Director, International BMO Financial Group (Toronto, Ontario) Joined Board: December 2005 Term expires: AGM 2011

Stephen Geist, CA, CFP President CIBC Asset Management Inc./CIBC Securities Inc. (Toronto, Ontario) Joined Board: December 2008 Term expires: AGM 2010

Peter W. Glaab, CMA Senior Vice-President CI Investments Inc. (Toronto, Ontario) Joined Board: December 2004 Term expires: AGM 2010

Sonny Goldstein, CFP President Goldstein Financial Investments Inc. (Toronto, Ontario) Joined Board: March 2010 Term expires: AGM 2010

Kevin E. Regan, CA, CFP President & Chairman of the Board Investors Group Financial Services Inc. (Winnipeg, Manitoba) Joined Board: December 2005 Term expires: AGM 2011

Robert M. Sellars, CA, CFA Executive Vice-President & Chief Financial Officer Dundee Private Investors Inc. (Toronto, Ontario) Joined Board: December 2006 Term expires: AGM 2010

Left to Right: Bob Sellars, Ed Legzdins, Larry Waite, Peter Glaab, Sandy Grant, Steve Geist, Rod McLeod, Janet Woodruff, Kevin Regan, Doug Thomson, Dawn Russell, Sonny Goldstein, Lea Hansen


Board CoMMiTTees

The MFDA Board has four standing committees – Audit & Finance, Executive,

Governance and Regulatory Issues. The President and CEO of the MFDA is an

ex officio member of all four committees. The composition and mandate of each

Committee is outlined below.

audit & finance Committee

The Audit & Finance Committee oversees internal and external audits of the MFDA

and advises the Board on financial issues including the Management Discussion

and Analysis and the financial statements. The Committee oversees MFDA risk

management internal control functions and reviews the MFDA budget.

The Committee must be chaired by a Public Director.

Committee Members Doug Thomson (Chair) Public Director Peter Glaab Industry Director Sandy Grant Public Director

The Audit & Finance Committee met four times during fiscal 2009/2010.

executive Committee

The Executive Committee meets, when required, to review any matter that the Chair

or the President and CEO does not consider to be within the mandate of any other

Committee and to carry out such other functions as are assigned or delegated to it by

the Board. The Committee is currently chaired by an Industry Director.

Committee Members

Ed Legzdins (Chair) Industry Director Rod McLeod Public Director Robert Sellars Industry Director Janet Woodruff Public Director

The Executive Committee met once during fiscal 2009/2010.


Governance Committee

The Governance Committee’s responsibilities include the coordination and oversight of

the Director nomination process, recommendations for Committee membership and

Board self-assessments. The Committee must be chaired by a Public Director.

Committee Members Rod McLeod (Chair) Public Director Ed Legzdins Industry Director Dawn Russell Public Director Robert Sellars Industry Director The Governance Committee met 14 times during fiscal 2009/2010.

regulatory issues Committee

The Regulatory Issues Committee’s responsibilities include the review of proposed

Policy, Rule or By-law amendments to be presented to the Board and review of

applications from Members for exemptive relief from MFDA regulatory requirements.

The Committee must be chaired by a Public Director.

Committee Members Dawn Russell (Chair) Public Director Stephen Geist Industry Director Sonny Goldstein Industry Director Lea Hansen Public Director Kevin Regan Industry Director Robert Sellars Industry Director

The Regulatory Issues Committee met four times during fiscal 2009/2010.

ad Hoc Committees

In March 2010, the Board established the IPC Issues Committee to consider a number

of proposals made by the MFDA Investor Protection Corporation (“IPC”), including

(a) increasing the target size of the IPC fund from $30 million to $50 million over five

years; (b) aligning the asset base on which IPC assessments are calculated with assets

currently covered by the fund; and (c) aligning the risk of Member insolvency with

assessments.

In June 2010, the IPC Issues Committee made a number of recommendations (see

Bulletin #0437-M) on which Members were invited to comment by September 1, 2010.

The Committee held an information session for Members on July 15, 2010 and met with

members of the Investment Funds Institute of Canada and the Federation of Mutual

Fund Dealers on July 28, 2010. The Committee’s final recommendations are subject to

Board approval.


amendments to Mfda By-law no. 1

A Special Meeting of Members was held on October 2, 2009 at which Members

approved the amendments to MFDA By-law No. 1 set out in By-law No. 15 by the

requisite two-thirds of votes cast at the meeting. Following the meeting, a Member

filed a Notice of Request for Review of Decision with the British Columbia Securities

Commission (“BCSC”) concerning the amendments.

In January 2010, the BCSC advised the MFDA that the Canadian Securities

Administrators’ (“CSA”) approval of By-law No. 15 could not be expected until at least

the completion of the proceedings noted above and so the MFDA held its Annual

General Meeting of Members in March 2010 under the existing version of By-law

No. 1. In April 2010, the MFDA and the Member that initiated the BCSC proceeding

made a joint application to the BCSC Hearing Panel to discontinue the proceeding.

However, in June 2010 the Hearing Panel rejected the parties’ application and

determined that it was in the public interest to hold a hearing. At the time of printing

this Annual Report, the proceeding was still underway.

director Compensation

As part of its mandate, the Governance Committee reviewed the MFDA’s Director

Compensation Policy to ensure that it is adequate and in line with similar organizations.

Public Director remuneration remains unchanged from 2009. Each Public Director on

the MFDA Board receives an annual retainer of $15,000. The Committee Chair retainer

for all committees, with the exception of the Audit & Finance Committee, is $2,500 per

annum. The Audit & Finance Committee Chair retainer is $4,000 per annum. Public

Directors receive a meeting attendance fee of up to $1,500 per Board or Committee

meeting. Out-of-town Public Directors who attend Board or Committee meetings in

person receive an additional $1,000 supplementary fee.

In circumstances where a Public Director serves as the Chair of the Board, the Board of

Directors has the discretion to set the amount of the Chair retainer, which is reviewed

annually during the tenure of the individual. The annual retainer for the Chair of the

Board is $50,000 compared to $70,000 in 2009.

Industry Directors are not compensated for their participation on the MFDA Board,

however, all Directors are reimbursed for related travel and out-of-pocket expenses.

Board orientation

New Directors participated in a comprehensive orientation session following their

appointment to the MFDA Board. The orientation provided an overview of the MFDA’s

regulatory mandate, its operations, financial affairs, legal framework and governance

practices. The session also provided new Board members with an opportunity to meet

senior management and be briefed on their specific roles within the Corporation.


Code of Conduct

In 2009, the MFDA formalized a Code of Conduct for Directors as a practical guide for

Board members. The Code includes provisions designed to minimize the possibility

of bias and conflicts of interest which may arise from the use of information obtained

during the course of Directors’ duties.

Board and Committee Meeting attendance

A total of 38 meetings were held during the fiscal year ended June 30, 2010, including

13 Board meetings, one Special Meeting of Members and one Annual General Meeting

of Members. Below is a breakdown of attendance.

director Board of directors

audit & finance executive Governance regulatory issues

George Aguiar (departed March 4/10) 8 of 9 n/a 1 of 1 9 of 10 2 of 3

Martin Friedland (departed March 4/10) 9 of 9 n/a n/a 10 of 10 n/a

Stephen Geist 9 of 13 n/a n/a n/a 3 of 4

Peter Glaab 11 of 13 4 of 4 n/a n/a n/a

Sonny Goldstein ( joined March 4/10) 4 of 4 n/a n/a n/a 1 of 1

William Grace (departed Dec. 21/09) 5 of 6 2 of 2 1 of 1 n/a 2 of 2

Sandy Grant ( joined March 4/10) 4 of 4 1 of 1 n/a n/a n/a

Lea Hansen ( joined Jan.12/10) 6 of 6 n/a n/a n/a 2 of 2

Ed Legzdins 10 of 13 n/a 1 of 1 13 of 14 n/a

Rod McLeod (appointed March 4/10) 3 of 3 n/a n/a 4 of 4 n/a

Helen Meyer (departed Dec. 22/09) 6 of 6 n/a n/a n/a 2 of 2

Janet Pau (departed Dec. 21/09) 5 of 6 2 of 2 n/a n/a n/a

Kevin Regan 11 of 13 n/a n/a n/a 3 of 4

Dawn Russell ( joined Nov. 4/09) 7 of 8 n/a n/a 4 of 4 2 of 2

Robert Sellars 13 of 13 n/a n/a 4 of 4 4 of 4

Doug Thomson ( joined Jan.12/10) 6 of 6 2 of 2 n/a n/a n/a

Larry Waite 13 of 13 4 of 4 1 of 1 14 of 14 4 of 4

Janet Woodruff ( joined Jan.12/10) 6 of 6 1 of 1 n/a n/a n/a

Robert Wright (departed Feb. 1/10) 8 of 8 n/a 1 of 1 9 of 9 n/a


regional Councils and Hearing Panels

The MFDA has four Regional Councils corresponding to the following

geographic Regions:

• Atlantic Region: Nova Scotia, New Brunswick, Prince Edward Island and

Newfoundland and Labrador

• Central Region: Ontario and Québec

• Pacific Region: British Columbia and Yukon Territory

• Prairie Region: Alberta, Saskatchewan, Manitoba, Northwest Territories

and Nunavut

The principal activity of the Regional Councils is the conduct of hearings by three-

person Hearing Panels created from among members of each Regional Council.

The membership of each Regional Council includes elected industry representatives,

(partners, officers, directors, employees or agents of Members resident in the Region),

appointed public representatives and appointed industry representatives. The primary

role of representatives is to serve on MFDA disciplinary Hearing Panels, each of which

is chaired by a public representative who is generally a retired judge but may also be a

lawyer with extensive litigation and administrative law experience.

The two-year terms of office of elected industry representatives on the Regional Councils

expired in June 2010 and the MFDA conducted a formal nomination and election

process to re-constitute the Councils in Spring 2010. The Board of Directors approved

the new Chairs and Vice-Chairs of the Regional Councils at its June 2010 meeting.

Further details regarding the composition of the 2010-2012 Regional Councils are

outlined on the MFDA website.

Newly elected industry representatives are provided with a day-long orientation program

prior to serving on a Hearing Panel. The program is presented by an external expert in

administrative law and tribunal conduct and is focused on educating potential panelists

on how to conduct disciplinary proceedings as well as providing background on the

MFDA’s legal framework, compliance and enforcement functions.


MFDA regulatory operations are organized among the following Departments:

Compliance, Enforcement, Policy and Membership Services.

CoMPlianCe

The Compliance Department is responsible for monitoring Members’ adherence

to MFDA requirements and is comprised of two groups: Sales Compliance and

Financial Compliance. The Compliance Department is also responsible for reviewing

and approving Member resignation and reorganization requests, reviewing new

membership applications and assisting in policy and enforcement initiatives

as required.

sales Compliance

Third Compliance examination Cycle

MFDA Members are subject to a compliance examination within a three-year cycle.

The MFDA’s third cycle of compliance examinations commenced in January 2009 and

staff performed 60 head office examinations and 156 branch examinations through to

June 30, 2010.

All Reports issued to date have been issued within the established benchmarks.

The following is a breakdown of compliance examinations by province as at

June 30, 2010.

Mfda regulatory operations

Head Office Branch Total

Ontario 38 81 119

British Columbia 7 25 32

Alberta 2 18 20

Nova Scotia 1 10 11

Manitoba 4 6 10

New Brunswick 1 7 8

Saskatchewan 2 5 7

Québec 5 - 5

Newfoundland and Labrador - 3 3

Prince Edward Island - 1 1

Total 60 156 216


referrals to the enforcement department

Compliance made a total of 23 referrals to the Enforcement Department as at

June 30, 2010 originating from information received in the third cycle of

compliance examinations.

financial Compliance

level 4 Member examinations

During calendar 2009, the Financial Compliance group satisfied its benchmark to

perform an annual on-site financial examination of all 37 active Level 4 Members.

Furthermore, all examination reports were issued within the established benchmarks.

Of the 37 examinations conducted during the period, 24 were in Ontario, 6 in Québec

3 in British Columbia and 2 each in Alberta and Manitoba.

As at June 30, 2010, sixth-round financial compliance examinations were being

performed for Level 4 dealers. A total of 24 sixth-round examinations had commenced,

of which eight reports had been issued as of June 30, 2010.

financial Compliance desk reviews

The Financial Compliance group is responsible for reviewing the monthly financial

reports of all Members within 5 business days of the filing due date and the annual

audited financial reports within 3 months of the report date. During calendar 2009,

approximately 1,700 unaudited monthly and 140 audited annual financial reports

were reviewed by Financial Compliance staff within the established benchmarks. In a

number of instances, capital and/or reporting issues were identified through this review

process and Financial Compliance staff took steps to communicate with Member staff

on a timely basis so that corrective action could be taken.

Financial Compliance referred six matters to the Enforcement Department for the

12 months ended June 30, 2010, primarily relating to breaches of early warning

requirements and failure to notify the MFDA immediately of capital deficiencies.

Key Compliance initiatives

additional Member Guidance on Key Compliance issues

In addition to the MFDA’s ongoing efforts to provide further guidance to Members

through its examinations process, Member Regulation Forums and industry and dealer

conferences, during calendar 2009 MFDA Compliance staff undertook various specific

initiatives to provide more guidance to Members on key compliance issues.


In particular, Compliance staff issued Bulletin #0355-C – Common Sales Compliance

Deficiencies and Appropriate Corrective Action, which provides both general guidance

on how to address compliance deficiencies and develop an appropriate action

plan and specific guidance on how to address several of the most common

compliance deficiencies.

Compliance staff also commenced work on several written guides on specific compliance

topics to be made available on the MFDA’s public website and Members-only web site.

The first such guide issued in 2009 was the Policies and Procedures Manual Reference

Guide, which provides Members with a consolidated reference document that details all

of the necessary written Member policies and procedures annotated to the applicable

Rules, Policies and Notices.

In addition, Compliance staff worked extensively on developing additional guidance

and tools for Members on the topics of leverage supervision and suitability – one of the

largest areas of focus in the third cycle of examinations. While MR-0069 – Suitability

Guidelines provided significantly more guidance to Members and industry participants

on leverage supervision and suitability than had ever been provided previously in the

Canadian securities industry, compliance examination findings through 2009 indicated

that further guidance was still required. In response, Compliance staff created a Leverage

Supervision Guide and several supervisory tools including a Leverage Review Worksheet

and an Approved Person Leverage Analysis template to assist Members in meeting their

supervision and suitability obligations. The guide and associated supervisory tools were

issued in early 2010.

Member and auditor education

MFDA Financial Compliance staff has been performing, on an annual basis, on-site

examinations of Level 4 dealers’ financial operations for over five years. Members have

demonstrated an improvement in their understanding of the financial requirements

during this time. However, staff has identified a number of areas where Members have

incurred capital deficiencies as a result of not understanding or not fully complying

with the financial requirements. To address this weakness, the MFDA issued Bulletin

#0427-C in early 2010 highlighting these significant deficiencies with the expectation

that Members will review the issues against their current practices and rectify them

if applicable.

In addition to on-site examinations of Member operations, MFDA staff has been

reviewing the auditor working papers prepared in support of the auditors’ work relating

to their annual audit engagement of Members. Under MFDA Rules, auditors are required

to perform their audit of the Form 1 in accordance with Canadian auditing standards and

also perform specific audit procedures outlined in MFDA Rules. As a result of reviewing

auditor working papers, it was determined that not all auditors have been incorporating


the specified MFDA audit requirements into their engagements. Consequently, the

MFDA issued Bulletin #0428-C in early 2010 highlighting these deficiencies in the

auditor year-end engagements of MFDA Members with the expectation that auditors

will review the issues identified and modify their engagements to incorporate

MFDA-specific requirements.

looking forward

international financial reporting standards

In addition to amending Form 1, MFDA staff is also planning to develop an internal

training plan to ensure that all applicable staff is familiar with the new International

Financial Reporting Standards (“IFRS”) and, more specifically, proficient with the

requirements under the revised Form 1. Educational sessions for Member staff

regarding the changes to Form 1 are planned for the second half of 2010.

electronic filing system

The MFDA is in the process of developing a new electronic financial filing application

that will replace the existing system upon Members transitioning to the IFRS Form 1

basis of reporting.

staff of the Mfda’s Calgary office.


enforcement

The Enforcement Department is responsible for addressing non-compliance with

regulatory requirements by Members and Approved Persons. The Department is

comprised of four groups: Case Assessment, Investigations, Litigation and Policy.

2009 annual Trends

The number of complaints and other intake matters received by Case Assessment in

2009 increased by 35% from 2008. The increase was attributable to the period between

January to June 2009. In the latter part of 2009, the intake numbers decreased to the

same monthly levels as early 2008, and they have continued to remain at those lower

levels in 2010. Staff believes that the temporary increase in intake numbers relates to

the significant decline in the markets during that period.

enforcement Priorities

The Enforcement Department reviews supervision by the Member and its supervisory

personnel in all cases it opens. This is an important part of our enforcement and

compliance strategy that focuses on addressing Members’ efforts in proactively avoiding

non-compliant situations by implementing effective supervisory regimes.

The Enforcement Department also reviews the Member’s complaint handling in all

cases involving a client complaint. Although the MFDA, as a regulator, does not provide

compensation, it robustly enforces the Member’s obligation to respond to complaints in

a fair and timely manner.

The following case types will continue to be a priority for the Enforcement Department,

given the high level of potential client harm:

• Suitability of investment and leveraging recommendations;

• Member supervision, including Approved Person compliance with Member

supervisory requirements;

• Complaint handling;

• Securities and other business outside the Member; and

• Abusive sales practices, including theft, fraud, personal financial dealings,

misrepresentations and unauthorized and discretionary trading.


disciplinary action

Staff commenced 26 disciplinary cases during the past fiscal year, a decrease of 5

cases from the previous fiscal year. This was because several earlier cases had been

adjourned pending the results of a court decision involving an Investment Industry

Regulatory Organization of Canada (“IIROC”) matter that related to the jurisdiction

of a Self-Regulatory Organization (“SRO”) to proceed against former Approved Persons.

The court case was decided in favour of the SROs in the Fall of 2009 and much

of staff’s work during the fiscal year involved bringing the adjourned cases back on

track for a hearing.

In addition, staff identified 276 cases involving violations of a minor nature that did

not warrant formal disciplinary proceedings. Of the 276 minor violation cases, 106

were closed by Warning Letter, 169 by Cautionary Letter and one was closed with an

Agreement and Undertaking.

looking forward

Enforcement’s main priority will continue to be the suitability of investment and

leveraging recommendations regarding mutual funds, exempt securities and any

other product sold by Members.

Enforcement generally identifies suitability cases as ones involving Approved Persons

who make specific investment or leveraging recommendations, as well as cases

involving a failure to develop, implement and maintain supervisory procedures by

Members and supervisors.

Members have a supervisory duty to set clear procedures that meet regulatory

requirements, and to actively supervise investment and leveraging recommendations

made to clients by their Approved Persons. The majority of the supervision cases to

date have been against Members and have come from referrals from MFDA Sales

Compliance. There have also been some cases against individual Approved Persons

regarding suitability, primarily with regard to exempt products.

In the coming year, a number of current files are likely to result in additional

proceedings against Members regarding supervision, and there is the potential

for proceedings against individual Approved Persons for unsuitable investment

and leveraging recommendations regarding mutual funds.


Policy

The principal role of the Policy Department is to monitor the effectiveness of MFDA

By-laws, Rules and Policies; recommend changes, where appropriate; draft new or

amended By-laws, Rules and Policies; and draft Notices and Bulletins for Members to

assist them with the interpretation and application of MFDA requirements. In addition,

the department provides consulting, legal, research and drafting support to the other

departments of the MFDA.

Consultations with industry

In the Fall of 2009 and Spring of 2010, MFDA staff held eight Member Regulation

Forum meetings in Vancouver, Calgary, Winnipeg, Toronto and Montreal. MFDA

staff updated Members on various policy initiatives, including proposed Rule and

Policy amendments, guidance on how to address compliance deficiencies and recent

enforcement cases.

By-law amendments

MFDA By-law No. 1 – Section 35 (No Actions Against the Corporation)

On February 19, 2010, the Recognizing Regulators approved proposed amendments to

section 35 of MFDA By-law No. 1 regarding the MFDA Investor Protection Corporation

(“IPC”). The proposed amendments are intended to: (i) ensure that IPC and its

directors, officers and personnel are adequately protected in the discharge of their

investor protection mandate from legal actions by Members, Approved Persons or other

persons under the jurisdiction of the MFDA; and (ii) provide for, within the MFDA

By-laws, the terms of the relationship between the MFDA and IPC and existing MFDA

and Member obligations to the IPC. The proposed amendments will be brought forward

for Member approval at the December 2010 Annual General and Special Meeting of

Members (“2010 AGM”).

rule amendments

MFDA Rules 2.2 (Client Accounts), 2.8 (Client Communications) and 5.3

(Client Reporting) and Policy No. 2 Minimum Standards for Account Supervision

On June 29, 2010, the Recognizing Regulators approved proposed amendments to Rules

2.2, 2.8, 5.3 and Policy No. 2, which were drafted to address the issues of clarity of the

Member/client relationship and performance reporting under the Client Relationship

Model (“CRM”) project, as well as various other regulatory issues identified by MFDA

Compliance and Enforcement staff. The MFDA CRM proposals will be brought forward

for Member approval at the 2010 AGM.


Consequential Amendments Resulting from National Instrument 31-103

Registration Requirements and Exemptions

Consequential amendments to MFDA Rules resulting from National Instrument

31-103 (“NI 31-103”) were published for a 90-day comment period which expired on

March 23, 2010. The proposed amendments include changes to Rule 1.2 (Individual

Qualifications), Rule 2.4.2 (Referral Arrangements), Rule 2.5 (Minimum Standards

of Supervision), Rule 5.3 (Client Reporting) and Rule 5.6 (Record Retention).

On June 25, 2010, the CSA published proposed amendments to NI 31-103 for a

90-day public comment period, which include revisions to requirements with respect

to account statements and referral arrangements. As a result, the consequential

amendments to Rules 5.3 and 2.4.2 have been put on hold until the revisions to the

requirements under NI 31-103 are finalized. The other consequential amendments to

MFDA Rules were approved by the Recognizing Regulators in October 2010.

MFDA Rule 2.4.1 (Payment of Commission to Non-registered Entities)

Amendments to Rule 2.4.1 codify existing practice with respect to the payment of

commissions to unregistered corporations and are intended to allow Members and

their Approved Persons an appropriate degree of flexibility in how they structure

their business affairs, provided that certain conditions are satisfied. The revised Rule

came into effect on March 29, 2010 and is subject to ratification by Members at the

2010 AGM.

Proposed New MFDA Rule 2.4.4 (Transaction Fees or Charges) and Proposed

Amendments to MFDA Rule 5.1 (Requirement for Records)

Proposed new Rule 2.4.4 and proposed amendments to Rule 5.1 were published for a

90-day public comment period which expired on September 23, 2010. Proposed new

Rule 2.4.4 will require that, prior to the acceptance of an order, the Member inform the

client of any sales charge, service charge or any other fees or charges to be deducted in

respect of the transaction so that the client is able to make an informed decision with

respect to the order. Conforming changes are also proposed to Rule 5.1(b) by adding a

new subsection (iv), which will require Members to maintain records evidencing that

the client was informed of all fees and charges in accordance with Rule 2.4.4.


Proposed Amendments to MFDA Rule 3.1.1 (Capital – Minimum Requirements)

Proposed amendments to Rule 3.1.1, which prescribes the minimum capital to

be maintained by Level 1, 2, 3 and 4 Members, are intended to harmonize MFDA

minimum capital requirements for Members that are licensed in multiple registration

categories with the minimum capital requirements under NI 31-103. The proposed

amendments were published for comment on August 13, 2010.

Proposed Amendments to MFDA Rule 3.3.2 (Segregation of Client Property – Cash)

Rule 3.3.2 requires Members to hold client cash in trust and segregate client cash

for investment in mutual funds separately from client cash for other investments

and prohibits Members from earning interest on client funds held in trust. The

requirements in Rule 3.3.2 respecting commingling and the allocation and payment

of interest on client cash held in trust are based on the provisions of Part 11

(Commingling of Cash) of National Instrument 81-102 Mutual Funds (“NI 81-102”).

Proposed amendments to Rule 3.3.2 and NI 81-102 were concurrently published

for a 90-day public comment period which expired on September 24, 2010.

The proposed amendments to Rule 3.3.2 are intended to remove commingling and

related restrictions from the Rule, while maintaining the requirement to keep client

cash segregated from Member property. The amendments will also permit Members

discretion as to whether they will pay interest on client cash held in trust, subject to

conditions, including a disclosure requirement on account opening, as to whether or

not such interest will be paid and, if so, at what rate.

staff of the Mfda’s Vancouver office.


form amendments

Proposed Amendments to MFDA Form 1 – Financial Questionnaire and Report

Proposed amendments to MFDA Form 1 were published for comment on

August 13, 2010. The proposed amendments are intended to align MFDA

financial reporting requirements with IFRS.

Policy amendments

MFDA Policy No. 3 Complaint Handling, Supervisory Investigations

and Internal Discipline

Amendments to Policy No. 3 were developed to address procedural issues identified by

clients who have filed complaints against Members and their Approved Persons and

provide further guidance with respect to the fair and prompt handling of complaints

by Members and supervisory investigations to be conducted by Members following

the receipt of a complaint. The amendments to Policy No. 3 became effective on

February 1, 2010.

MFDA Policy No. 6 Information Reporting Requirements

Consequential amendments to section 14 (Changes in Organizational Structure) of

Policy No. 6 have been proposed to conform to NI 31-103 and NI 33-109 Registration

Information by including references to the Ultimate Designated Person and Chief

Compliance Officer in the reporting requirements under this section. The proposed

amendments to Policy No. 6 were approved by the Recognizing Regulators in

October 2010.

Member regulation notices

Leverage Risk Disclosure – MR#0074 (Issue Date: May 19, 2010)

This Notice replaces Member Regulation Notice MR-0006 Borrowing Money to Buy

Securities (Leveraging), issued on March 16, 2001. The Notice attaches revised leverage

risk disclosure documents to be provided to clients and provides guidance with respect

to leverage risk disclosure requirements.


Complaint Handling – MFDA Policy No. 3 – MR#0073 (Issue date: April 6, 2010)

This Notice was issued to provide summary information and guidance on Parts

I and II of revised Policy No. 3 Complaint Handling, Supervisory Investigations and

Internal Discipline. The Notice also reminds MFDA Members that they are required

to implement policies and procedures for handling client complaints that address the

minimum complaint handling requirements set out in MFDA Policy No. 3 and attaches

the revised Client Complaint Information Form that must be provided to new clients

and to clients who submit a written complaint to the Member.

looking forward

National Instrument 31-103 Registration Requirements and Exemptions

In 2009 and 2010, MFDA staff continued to participate on CSA Registrant Regulation

Committees with CSA and IIROC staff to consider amendments to NI 31-103, which

came into force on September 28, 2009. The MFDA has proposed consequential Rule

amendments to ensure consistency with requirements under NI 31-103. MFDA staff

will also be reviewing and revising Member Regulation Notices affected by these

amendments.

Powers of attorney and similar authorizations

MFDA staff is currently drafting a Member Regulation Notice that is intended to clarify

the obligations of Members and Approved Persons with respect to powers of attorney

and similar authorizations such as executorships and trusteeships. The Notice will

update and replace Member Regulation Notice MR#0031 Powers of Attorney –

Rule 2.3.1 – Exception for Family Members of

Approved Persons, issued on October 29,

2004, and provide clarification with respect

to the requirements of the Rule.

approved Person Transfers

MFDA staff is preparing a Member

Regulation Notice intended to identify

concerns with respect to some of

the account transfer practices that

MFDA staff has observed and to remind

Members and Approved Persons of

applicable regulatory requirements.



Amendments to Rule 2.2 (Client Accounts) and Policy No. 2 Minimum Standards for

Account Supervision

MFDA staff is currently drafting amendments to Rule 2.2 and Policy No. 2 to clarify

that the obligation for Members and Approved Persons to ensure that each order

accepted or recommendation made for any account of a client is suitable includes

recommendations to borrow to invest (“leverage”). Amendments to Policy No. 2 will

also clarify that the suitability of leverage must be assessed having regard to the client’s

investment knowledge, risk tolerance, age, time horizon, income and net worth and set

out minimum criteria that would require further supervisory review and investigation.

Membership services

The Communications and Membership Services group is active in maintaining

Member files and responding to inquiries from Members, the public and the media.

It is also responsible for maintaining and updating the MFDA website and facilitating

Member events.

During the period July 1, 2009 to June 30, 2010, the Department responded to

approximately 900 inquiries by telephone and e-mail. The majority of inquiries come

from MFDA Members and Approved Persons respecting such topics as registration of

Approved Persons, the Electronic Filing System and questions about the latest Notices

and Bulletins.



Management discussion and analysis

The financial statements present the financial results of the MFDA for the fiscal year

ended June 30, 2010 with 2009 comparatives and accompanying notes.

reVenues

For FY 2010, the MFDA had revenues from operations of $25,366,717 (compared to

$25,807,652 for FY 2009). The principal source of revenue for the MFDA is Membership

fees, which are assessed against Members and are calculated to provide sufficient

funding to meet the MFDA’s yearly budgeted expenses.

Membership fees are calculated based upon a formula that takes into account the

amount of assets under administration (“AUA”) that each Member has under its control.

Each year, on or before April 15th, MFDA Members are required to report their AUA

figures as at March 31st. AUA figures represent AUA from operations in all provinces

other than Québec and specifically exclude cash, GIC’s, limited partnerships, and

segregated funds. A Member’s reported AUA at March 31st for the current year is then

added to the previous year’s reported AUA and an average of the two years is calculated

for billing purposes.

The MFDA uses a five-tiered AUA rate schedule as the basis for its billing. Members

are billed a set fee amount per million dollars of AUA based upon this schedule with

the fee rates set to provide sufficient funding for the next fiscal year. The MFDA fee

payable by a Member is calculated by matching its average AUA figure to this tiered fee

schedule. For some Members, a minimum fee applies. Each Member’s fees for the year

are divided into four installments payable on a quarterly basis.

Membership fees for FY 2010 amounted to $24,724,881. Other sources of revenue for

the MFDA include the following:

• Hearing cost recoveries of $438,511 are costs related to hearings held by the MFDA.

In December 2008 the MFDA Board of Directors approved the recovery of these costs

through the use of fine monies collected in the MFDA’s Discretionary Fund.

• Investment income of $37,749 is derived from the investment of MFDA operating

cash balances in the CIBC Imperial Money Market Pooled Fund and Canadian federal

treasury bills. Investment returns for FY 2010 were negatively impacted by the low

short-term interest rate environment experienced throughout the year.

• Enforcement recoveries of $100,476 are costs awarded by the MFDA Regional

Council Hearing Panels at the conclusion of MFDA disciplinary hearings or

settlements and which have been collected by the MFDA.


• Administration recoveries of $60,000 are costs recovered from the MFDA IPC

for administrative services provided by MFDA staff.

• Late filing fees of $5,100 are fees levied against Members that have missed

information filing deadlines.

exPenses

Given the adverse economic environment facing MFDA Members for FY 2010, the

MFDA implemented a cost cutting strategy when it formulated its budget for the 2010

fiscal year. Primary among the cost cutting initiatives was a suspension of salary merit

increases for all staff, a reduction in Board member and Senior Executive remuneration,

restrictions on travel and training expenditures, and deferral of various technology

related projects. As a result of this cost cutting strategy, operating expenses for the

MFDA declined nearly $1 million or 3.6% year over year ($26,316,528 for FY 2010

compared to $27,312,601 for FY 2009).

Operating costs would have been substantially lower had it not been for the MFDA

having to defend itself before a BCSC hearing panel for which significant legal costs

were incurred. This hearing was the result of a complaint filed by a Member with

respect to the MFDA’s governance processes. Although the matter remains outstanding,

it is in the process of being resolved and going forward, substantially less legal

expense is anticipated to be incurred. Legal costs related to the BCSC hearing were

approximately $679,000 to the end of June 2010.

Staff related expenses remain the largest expense for the MFDA, representing 73%

of total expenses. The MFDA experienced a year over year decrease in salaries and

benefits expense for FY 2010 of $1,134,771 or 5.6%. This decrease arose mainly from

the suspension of salary merit increases for all staff that was effective throughout fiscal

2010 coupled with lower post-retirement benefits costs. The MFDA also experienced

modest staff turnover resulting in some vacant positions throughout the year which also

lowered salary expense. The MFDA completed fiscal 2010 with 162 employees which

was six positions short of the budgeted staff count of 168 positions. For fiscal 2011, the

budgeted staff count will be increased by two positions to 170 employees.

Overhead expenses such as rent and utilities, general office expenses, insurance,

telecom, bank charges, computer software and maintenance expenses collectively saw

a 1.6% year over year reduction from fiscal year 2009. Cost cutting measures and the

deferral of some IT related initiatives contributed to the savings. Restrictions placed

upon travel and training throughout the year achieved an 18.7% year over year decrease

in these two expense categories.

Hearing panel costs increased again year over year for FY 2010. However, these costs

are recovered through the use of fine monies accumulated in the MFDA’s Discretionary

Fund. As a result, Hearing Panel costs have no impact on the MFDA’s revenues over

expenses position.


deficiency of revenue over expenses

The MFDA ended FY 2010 with a deficiency of revenues over expenses of $949,811

(compared to a deficiency of $1,504,949 for FY 2009). The MFDA budgeted a deficit

of $1,317,741 for FY 2010. The combination of higher than anticipated revenues and

lower than expected employee related expenses constituted the bulk of the variance. The

deficit for FY 2010 would have been reduced further were it not for the MFDA incurring

$679,000 in legal fees pertaining to the BCSC hearing matter.

Mfda discretionary fund

This Fund is an internally restricted fund established by the MFDA Board of Directors

to receive monies from the collection of enforcement fines and the surrender of profits

imposed by order of an MFDA hearing panel. For FY 2010 the fund received fines

of $370,500 (compared to $477,500 for FY 2009) and investment revenue of $5,303

(compared to $19,197 for FY 2009). The Discretionary Fund ended the year with a

balance of $909,085 at June 30, 2010 (compared to $972,093 at June 30, 2009).

Mfda investor Protection Corporation

The MFDA bills and collects assessments by the MFDA IPC. These amounts flow

through the Statements of financial position as an asset to reflect the assessment to be

received from Members. An offsetting liability to the MFDA IPC accounts for future

remittances due from the MFDA. For the period from July 1, 2009 to June 30, 2009 the

MFDA billed $5,030,220 to its Members on behalf of the MFDA IPC. $58,109 relating to

IPC assessments remained due to the IPC as of June 30, 2009.

outlook for fiscal 2011

Expenses for FY 2011 are projected to be $29.0 million with several factors accounting

for the year over year increase. The budget for FY 2010 was formulated subsequent

to the 2008-09 market collapse that created significant challenges for our Members.

In recognition of these challenges and in order to mitigate a fee increase for FY 2010,

the MFDA implemented significant budget cuts, as previously mentioned. These cuts

however, could not practically be maintained going forward without jeopardizing the

investment that the MFDA has made in its staff or impairing the organization’s ability

to effectively deliver upon its regulatory mandate. Consequently, in order to mitigate

the risk of significant employee turnover and to ensure that staff members remain

adequately trained to fulfill our regulatory mandate, the MFDA will see increases in

employee related expenses and training costs for FY 2011. Fortunately, Member AUA

has recovered to support a return to a normalized budget.


In response to the request of the CSA and based upon workload demands, the MFDA will be expanding

its staff complement in the Calgary office, increasing to 14 staff members from last fiscal year’s budgeted

11 positions. The additional staffing has been accommodated through inter-office transfers and the

addition of only one new position for FY 2011. To accommodate the additional staff, the Calgary office will

be expanded within its current location. No other office expansions are planned for FY 2011. A further net

new administrative position is planned for the Enforcement group to address increased workload in the

Litigation department.

Over the past few years, the MFDA has subsidized Member fees through the use of its unrestricted net

asset fund. The effect of these subsidies, totaling $5.45 million since 2006, was to lower Member fees

and mitigate fee increases. It has been the intention of the MFDA to maintain its unrestricted net asset

fund at 25% of yearly operating expenses, representing three months of operating costs. In the absence of

significant year end surpluses, this fund has been depleted to approximately 11% of yearly expenses or less

than 1.3 months of operating costs. Consequently, the MFDA was unable to use this fund as it has in

past years to subsidize membership fees for the 2011 fiscal year. Going forward, it will be necessary to

budget for the gradual replenishment of the unrestricted net asset fund in order to return it to a fiscally

prudent level.

A rewrite of the Electronic Filing System (“EFS”) is scheduled to take place in FY 2011. EFS was launched

in October 2003 and is used by MFDA Members and Financial Compliance staff for the monthly and

annual processing of the Financial Questionnaire and Report. Development of this system was deferred

for the past four years as other budget considerations took priority. However, with this system having now

reached its technical end-of-life and with reporting changes driven by the introduction of IFRS to take

effect in 2011, a rewrite of EFS is now necessary.

Similarly, further development of the Members-only section of the MFDA’s website will occur throughout

the 2011 fiscal year. This development is to further the goal of making it easier for Members to update

their MFDA membership data, improve Member communication methods and provide Members with

comparative risk information.

The 2009-11 Strategic Plan for the MFDA calls for a strong element of industry consultation and

the MFDA will continue efforts in that regard through creating enhanced awareness among our

membership of policy development initiatives and the sourcing of active participation and feedback

of Members in that process.

The MFDA has an accrued employee benefit plan liabilities of $3,332,900. This amount is comprised of a

$1,615,600 registered pension plan liability and a $1,717,300 liability with respect to the post-retirement

benefits plan. The post-retirement benefits plan is an unfunded obligation. Based upon actuarial analysis,

funding for the registered pension plan is planned to occur at a rate of approximately $1,300,000 annually.

Finally, with respect to IFRS, as a not-for-profit organization, the MFDA is not required to adopt IFRS

and so adoption would be on a voluntary basis. The MFDA has determined that the costs associated with

adopting IFRS outweigh the benefits of providing IFRS compliant financial statements. Accordingly,

the MFDA has elected not to adopt IFRS and will continue to follow the Section 4400 series standards

in the CICA Handbook that are currently undergoing further revision by the Canadian Institute of

Chartered Accountants.


Management’s responsibility for financial reporting

The accompanying financial statements and all other information contained in this

Annual Report are the responsibility of MFDA management. The financial statements

have been prepared in accordance with Canadian generally accepted accounting

principles (“GAAP”) and necessarily include some amounts based on the estimates

and judgments of management.

In discharging its responsibilities for the integrity and reliability of the financial

statements, management maintains and relies upon a system of internal controls. These

internal controls are designed to ensure that transactions are properly authorized and

recorded, assets are safeguarded against unauthorized use or disposition and liabilities

are recognized. The MFDA also maintains formalized policies and procedures and

an organizational structure that segregates duties. The MFDA employs standards

and procedures for hiring employees who are required to abide by a business code of

conduct and receive ongoing training regarding the proper execution of their duties.

Mechanisms also exist that enable reporting to the Audit & Finance Committee of any

perceived unethical behavior by employees.

In order to provide their opinion on the MFDA’s financial statements, Deloitte & Touche

LLP reviews the MFDA’s system of internal controls and conducts such tests and other

audit procedures that they consider appropriate. The auditors also meet in-camera with

the Audit & Finance Committee, without management present, to discuss the results of

their work. The independence of the auditors as well as the effectiveness of their work is

assessed by the Audit & Finance Committee annually.

The Audit & Finance Committee reviews the effectiveness of the company’s financial

reporting and internal control systems, any significant financial reporting issues,

the presentation and impact of significant risks, and key estimates and judgments

of management that may be material for financial reporting purposes. Additionally,

the Audit & Finance Committee meets periodically with MFDA management and the

auditors, and reports to the Board of Directors thereon. The Audit & Finance Committee

also reviews the annual financial statements and recommends them for approval by the

Board of Directors.

The accompanying financial statements have been audited by the auditors who are

engaged by the Board of Directors on the recommendation of the Audit & Finance

Committee. The appointment of the auditor is ratified at the Annual General Meeting

of MFDA Members.

Larry M. Waite Paul Reid President & Chief Executive Officer Director, Finance & Administration


financial statementsAuditors’ Report 31

Statements of Financial Position 32

Statements of Revenues and Expenses 33

Statements of Changes in Fund Balances 34

Statements of Cash Flows 35

Notes to the Financial Statements 36-45


financial statements

auditors’ report

To the Members of the

Mutual Fund Dealers Association of Canada

We have audited the statements of financial position of the Mutual Fund Dealers

Association of Canada (“MFDA”) as at June 30, 2010 and 2009 and the statements

of revenues and expenses, changes in fund balances and cash flows for the years then

ended. These financial statements are the responsibility of the MFDA’s management.

Our responsibility is to express an opinion on these financial statements based on

our audits.

We conducted our audits in accordance with Canadian generally accepted auditing

standards. Those standards require that we plan and perform an audit to obtain

reasonable assurance whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the

financial position of the MFDA as at June 30, 2010 and 2009 and the results of its

operations and its cash flows for the years then ended in accordance with Canadian

generally accepted accounting principles.

Chartered Accountants Licensed Public Accountants August 20, 2010


statements of financial Position

as at June 30 2010 2009 $ $ASSETS Current Cash - Operating fund (Note 3) 1,359,296 1,017,971 Cash - Discretionary fund (Note 3) 166,880 191,526 Investments - Operating fund (Note 3) 4,152,746 5,523,102 Investments - Discretionary fund (Note 3) 955,404 950,401 Membership fees billed in advance (Note 4) 7,251,145 6,222,061 MFDA Investor Protection Corporation assessments (Note 5) 58,109 15,100 Costs recoverable from MFDA Investor Protection Corporation (Note 7) 15,878 13,614 Other membership receivables 5,340 4,725 Prepaid expenses and other assets 336,896 294,202 14,301,694 14,232,702 Capital assets (Note 6) 1,608,767 1,900,878Employee benefit plan asset (Note 8) 1,643,300 1,271,300 17,553,761 17,404,880 LIABI LITI ES AN D FU N D BALANCECurrent Accounts payable and accrued liabilities 1,287,682 1,420,792 Unearned membership fees (Note 4) 7,254,525 6,222,811 Membership application deposits 8,000 16,000 Due to MFDA Investor Protection Corporation (Note 5) 58,109 15,100 Obligations under capital lease (Note 10) 62,474 56,938 8,670,790 7,731,641

Accrued employee benefit plans liability (Note 8) 3,332,900 3,196,200 Obligations under capital lease (Note 10) 165,374 79,523 12,169,064 11,007,364 FU N D BALANCES Operating Fund Invested in capital assets 1,380,919 1,764,417 Unrestricted net assets 3,094,693 3,661,006 4,475,612 5,425,423 Discretionary Fund (Note 2) 909,085 972,093 5,384,697 6,397,516 17,553,761 17,404,880 The accompanying notes are an integral part of these financial statements. Approved on behalf of the Board

Roderick M. McLeod, Q.C. Larry M. Waite Director Director


for the years ended June 30 2010 2009 $ $OPERATI NG FU N D REVEN U ES Membership fees 24,724,881 25,070,749 Hearing cost recoveries from Discretionary Fund (Note 14) 438,511 403,142 Enforcement recoveries 100,476 104,762 Administration recoveries (Note 7) 60,000 60,000 Investment income (Note 11) 37,749 166,149 Late filing fees 5,100 2,850Total revenues 25,366,717 25,807,652 EXPENSES Salaries and benefits (Note 8) 19,136,913 20,271,684 Rent and utilities 2,389,144 2,348,452 Legal 844,878 351,416 Travel 744,404 836,214 Office and general 551,217 564,726 Amortization of capital assets 544,115 688,248 Hearing panels 438,511 403,142 Computer software and maintenance 434,050 528,463 Board of Directors - fees 312,763 285,542 Board of Directors - expenses 79,262 71,387 Consultants 182,268 216,238 Meetings, seminars and communication 173,781 161,192 Telecommunications 142,643 142,013 Education 134,313 244,723 Insurance 112,947 116,739 Bank charges and interest 49,664 37,134 Audit fees 44,772 43,129 Regional Councils 883 2,159 Total expenses 26,316,528 27,312,601Deficiency of revenues over expenses (949,811) (1,504,949)

DISCRETIONARy FU N D (NOTE 2) REVEN U ES Fines 370,500 477,500 Investment income (Note 11) 5,303 19,197Total revenues 375,803 496,697 EXPENSES Hearing cost reimbursement to Operating Fund (Note 14) 438,511 403,142 Investment management fees 300 297Total expenses 438,811 403,439(Deficiency) excess of revenues over expenses (63,008) 93,258 The accompanying notes are an integral part of these financial statements.

statements of revenues and expenses


statements of Changes in fund Balances

for the years ended June 30

2010 2009

Operating Fund Invested in Unrestricted Discretionary Capital Assets Net assets Fund Total Total $ $ $ $ $

FU N D BALANCES Balance, beginning of year 1,764,417 3,661,006 972,093 6,397,516 7,809,207 Deficiency of revenues over expenses - (949,811) (63,008) (1,012,819) (1,411,691) Purchase of capital assets 100,182 (100,182) - - - Principal payments on capital lease 60,435 (60,435) - - - Amortization of capital assets (544,115) 544,115 - - - Balance, end of year 1,380,919 3,094,693 909,085 5,384,697 6,397,516

The accompanying notes are an integral part of these financial statements.


statements of Cash flows

for the years ended June 30 2010 2009 $ $OPERATI NG ACTIVITI ES Deficiency of revenue over expenses - Operating Fund (949,811) (1,504,949) (Deficiency) excess of revenue over expenses - Discretionary Fund (63,008) 93,258 Items not involving cash Amortization of capital assets 544,115 688,248 (468,704) (723,443) Changes in non-cash working capital Membership fees billed in advance (1,029,084) (1,055,356) Other membership receivables (615) 11,503 MFDA Investor Protection Corporation assessments (43,009) (58) Prepaid expenses and other assets (42,694) (36,874) Accounts payable and accrued liabilities (133,110) 294,723 Membership application deposits (8,000) 451 Unearned membership fees 1,031,714 100,312 Due to MFDA Investor Protection Corporation 43,009 58 Costs recovered from MFDA Investor Protection Corporation (2,264) 1,947 (652,757) (1,406,737) Employee benefit plan asset (372,000) (197,600) Accrued employee benefit plans liability 136,700 1,255,600 (888,057) (348,737) I nvestI ng actIvItI es Sale of investments, net 1,365,353 293,128 Purchase of capital assets (100,182) (174,259) Principal payments on capital lease (60,435) (81,573) 1,204,736 37,296

Increase (decrease) in cash 316,679 (311,441)Cash, beginning of year 1,209,497 1,520,938Cash, end of year 1,526,176 1,209,497

Cash - Operating Fund 1,359,296 1,017,971Cash - Discretionary Fund 166,880 191,526Cash, end of year 1,526,176 1,209,497 The accompanying notes are an integral part of these financial statements.


notes to the financial statementsJune 30, 2010

1. nature of the organization

The Mutual Fund Dealers Association of Canada (“MFDA”) is the national self-regulatory organization for the distribution side of

the Canadian mutual fund industry. The MFDA does not provide trade association activities for its Members. Its Members are firms

that have been registered by provincial securities commissions to carry on business as mutual fund dealers. The MFDA regulates

the activities of its Members and the approximately 73,000 Approved Persons sponsored by them. The MFDA’s regulatory activities

include developing rules and policies to govern the business conduct and operations of its Members and their Approved Persons,

monitoring compliance with these requirements and applicable securities laws, and enforcing them through disciplinary proceedings

conducted before impartial and independent MFDA hearing panels.

The MFDA was incorporated as a not-for-profit corporation on June 19, 1998 under Part II of the Canada Corporations Act and has

been formally recognized as a self-regulatory organization by a number of provincial securities commissions in Canada.

As of June 30, 2010, the MFDA had 139 Members (2009 - 145 Members).

2. significant accounting policies

These financial statements have been prepared by management in accordance with Canadian generally accepted accounting

principles. Because the precise determination of many assets and liabilities such as accrued liabilities and accrued employee benefits

plans liability is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of

estimates and approximations which have been made using judgment. Actual results could differ from those estimates. The financial

statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework

of the accounting policies summarized below.

Fund accounting

The MFDA uses the deferral method of accounting for not-for-profit organizations in the preparation of its financial statements

consisting of two funds, namely the Operating Fund and the Discretionary Fund.

The Operating Fund accounts for the regular business and activities of the MFDA.

The Discretionary Fund is an internally restricted fund established by the MFDA Board of Directors. The Discretionary Fund

receives monies from the collection of enforcement fines and the surrender of profits imposed by order of a MFDA hearing panel.

Disbursements from the Discretionary Fund are currently restricted to the funding of third party expenses of the MFDA Enforcement

Hearing Panels, payments to the MFDA Investor Protection Corporation, the investor protection fund, and payments for special

projects that are in the public interest and beneficial to the public and/or Canadian capital markets, as determined by the MFDA

Board of Directors.


2. significant accounting policies (continued)

Membership application deposits

A non-refundable deposit is required on all membership applications. The deposit is applied to membership fees when the applicant

is accepted for membership.

Membership fees

Membership fees are calculated annually using a defined formula based on each Members’ assets under administration,

invoiced to Members on a quarterly basis and recorded as revenue on a monthly prorated basis.

Membership fees billed in advance are reflected on the balance sheet as unearned membership fees.

Late filing fees

Members that do not submit the financial statements required by MFDA rules within the specified due dates are charged late

filing fees. The late filing fees are billed and recorded as revenue on a monthly basis.

Capital assets

Capital assets are recorded at cost and are amortized on the following basis:

Computers and software development – Straight-line method over 3 years

Office furniture and equipment – Straight-line method over 10 years

Leasehold improvements – Straight-line method over the term of the lease

Equipment under capital lease – Straight-line method over the term of the lease

Employee benefit plans

The MFDA accrues its obligations under employee benefit plans and the related costs, net of plan assets. The MFDA has adopted

the following policies:

• The cost of pensions and other retirement benefits earned by employees is actuarially determined using the projected benefit

method pro rated on service and management’s best estimate of expected plan investment performance, salary escalation,

retirement ages of employees and expected health care costs.

• The discount rate used to determine the accrued benefit obligation is determined by reference to market interest rates at the

measurement date on high-quality or government debt instruments with cash flows that match the timing and amount of

expected benefit payments.

• For the purpose of calculating the expected return on plan assets, those assets are valued at fair value.

• The excess of the net actuarial gain (loss) over 10% of the greater of the benefit obligation and the fair value of plan assets is

amortized over the average remaining service period of active employees. The average remaining service period of the active

employees is 18 years (2009 - 27 years) for the registered pension plan, 7 years (2009 - 8 years) for the supplementary executive

retirement plan and 17 years (2009 - 18 years) for other post-retirement benefits. The introduction of a standard termination

assumption this year resulted in a decline in the average remaining service period of the active employees for the registered

pension plan.


2. significant accounting policies (continued) Cash

Cash includes cash on hand and balances with banks, net of bank overdrafts. The MFDA accounts for cash maintained in

investment accounts as part of investments.

Investments

The MFDA invests in short-term investments in a pooled money market fund and in federal treasury bills or notes with short to

medium term maturities.

Investments in the money market fund are classified as available for sale (“AFS”). The investments in a pooled money market fund

are carried at fair value as reported by the fund manager. Unrealized gains and losses resulting from the difference between fair value

and cost are recorded in the Operating Fund balance until realized or until the asset is other than temporarily impaired, at which time

they are recorded in the statement of revenues and expenses.

Investments in Canadian federal treasury bills or notes are classified as Held for Trading (“HFT”) and are recorded at fair value

with any changes being recorded in the Statements of Revenues and Expenses. As these instruments are short term in nature, cost

approximates fair value. Any gains and losses are recognized in the Statements of Revenues and Expenses in the period that the asset

is sold or becomes permanently impaired. Interest income from the bonds is accrued daily and recorded under investment income in

the Statements of Revenues and Expenses.

Other assets and liabilities

Current assets other than cash and investments are classified as loans and receivables and are carried at amortized cost, which

approximates fair value due to their short terms to maturity.

Accounts payable and accrued liabilities are classified as other liabilities and carried at amortized cost, which approximates fair value

due to their short terms to maturity.

Provision for income taxes

The MFDA is a not-for-profit organization within the meaning of the Income Tax Act (Canada). Accordingly, there is no provision for

income taxes in these financial statements.

Adoption of accounting policies

Series of Sections 4400 – Not-for-profit organizations

In September 2008, the Canadian Institute of Chartered Accountants (“CICA”) issued amendments to several of the existing sections

on accounting, measurement and financial reporting by Not-for-profit organizations contained in the 4400 series of Sections of the

CICA Handbook. On July 1, 2009, the MFDA adopted these amendments made to Sections 4400. The adoption of these amendments

has not resulted in any change in how the MFDA accounts for its transactions.

Section 1000 – Financial statement concepts

On July 1, 2009, the MFDA adopted the amendments made to Section 1000, Financial Statements Concepts. The amended section

requires an entity to demonstrate that any amount that is presented as an asset meets the conceptual definition of an asset or is

permitted to be recorded as assets under specific CICA Handbook sections. The adoption of these amendments has not resulted in

any change in how the MFDA accounts for its transactions.


2. significant accounting policies (continued)

Section 1400 – Going concern

On July 1, 2009, the MFDA adopted the amendments made to Section 1400, Going Concern. The amended section requires

management to assess the entity’s ability to continue as a going concern for a period of at least 12 months from the balance sheet date

and disclose if the going concern assumption is no longer appropriate. The adoption of these amendments did not have a significant

impact on the MFDA’s financial position or results of operations.

Section 3855 – Financial Instruments – Recognition and Measurement

In August 2009, the CICA issued various amendments to CICA 3855, Financial Instruments – Recognition and Measurement

including changes in the categories to which debt instruments are required or are permitted to be classified. Loans and receivables

that an entity intends to sell immediately or in the near term, of which the MFDA has none, must be classified as held for trading.

The adoption of these amendments did not have a significant impact on the MFDA’s financial position or results of operations.

EIC-173 – Credit risk and the fair value of financial assets and financial liabilities

In January 2009, the Emerging Issues Committee (“EIC”) issued EIC-173, Credit risk and the fair value of financial assets and

financial liabilities. This abstract requires that an entity’s own credit risk (for financial liabilities) and the credit risk of the counterparty

(for financial assets) should be taken into account in determining the fair value of financial assets and financial liabilities, including

derivative instruments. The new guidance did not have any impact on the valuation of the MFDA’s financial assets and liabilities, or

its net assets.

3. Cash and investments

Cash of $1,526,176 (2009 - $1,209,497) includes an amount of $166,880 (2009 - $191,526), which is restricted in use for the

Discretionary Fund.

The MFDA has investments in the CIBC Imperial Money Market Pooled Fund in the amounts of $1,153,440 (2009 - $5,523,102)

for the Operating Fund and in Federal T-Bills and cash awaiting investment in the amount of $2,999,306 (2009 - $Nil) for the

Operating Fund.

The MFDA has investments in the CIBC Imperial Money Market Pooled Fund in the amounts of $955,404 (2009 - $950,401)

for the Discretionary Fund.


3. Cash and investments (continued)

The following table lists the investment holdings and their carrying and fair values as at June 30, 2010.

Par value ($)/ Credit Carrying Investment number of units Designation rating value Fair value $ $Operating Reserve Money Market CIBC Imperial Money Market Pooled Fund 115,199 Available For Sale N/A 1,153,440 1,153,440 Sub-Total Money Market 115,199 1,153,440 1,153,440

Operating Reserve Treasury Bills and Notes Canada Government, 0.300%, Mat. Aug 19 2010 1,000,000 Held for Trading AAA 998,690 998,690 Canada Government, 0.450%, Mat. Oct 28 2010 1,000,000 Held for Trading AAA 997,170 997,170 Canada Government, 0.550%, Mat. Dec 23 2010 500,000 Held for Trading AAA 497,855 497,855 Canada Government, 0.700%, Mat. Feb 17 2011 500,000 Held for Trading AAA 496,740 496,740 Sub-Total T-Bills 3,000,000 2,990,455 2,990,455 Cash on hand for T-bills investment N/A N/A N/A 8,851 8,851 Sub-Total Operating fund 4,152,746 4,152.746 Discretionary Reserve Money Market CIBC Imperial Money Market Pooled Fund 95,420 Available For Sale N/A 955,404 955,404 Sub-Total Discretionary fund 95,420 955,404 955,404

Total Invesments 5,108,150 5,108,150

4. Membership fees billed in advance

The membership fees billed in advance represent billings issued in June for the quarterly membership fees due July 15.

5. Mfda investor Protection Corporation assessments

The MFDA Investor Protection Corporation (“IPC”) commenced coverage of customer accounts on July 1, 2005. Member

assessments are calculated annually on a defined formula based on each Members’ assets under administration, and are

invoiced to Members on a quarterly basis. The MFDA invoices the Members on behalf of the IPC and is liable to the IPC

for the total of these Member assessments.


6. Capital assets

2010 Accumulated Net Book Cost Amortization Value $ $ $

Computers and software development 3,105,223 2,900,829 204,394 Office furniture and equipment 1,358,495 798,603 559,892 Leasehold improvements 2,049,289 1,420,962 628,327Equipment under capital lease 358,487 142,333 216,154

6,871,494 5,262,727 1,608,767

2009 Accumulated Net Book Cost Amortization Value $ $ $

Computers and software development 3,075,008 2,728,748 346,260 Office furniture and equipment 1,356,996 679,418 677,578Leasehold improvements 2,049,289 1,300,994 748,295 Equipment under capital lease 476,940 348,195 128,745

6,958,233 5,057,355 1,900,878

7. Costs recoverable from Mfda investor Protection Corporation

Pursuant to a support agreement, the MFDA provides the IPC administrative, corporate secretarial and other support during the

year to allow the IPC to operate without its own staff. The support costs charged to the IPC for the year amounted to $60,000

(2009 - $60,000) plus applicable taxes. This amount is billed on a monthly basis but reimbursed on a quarterly basis.

At June 30, 2010, there was an outstanding amount of $15,878 (2009 - $13,614) with respect to this support agreement.

8. employee benefit plans

MFDA has two defined benefit pension plans for eligible employees, being a registered plan (“RPP”) and a supplementary executive

retirement plan (“SERP”). The purpose of the SERP is to supplement the registered plan for designated executive employees.

As well, the MFDA has post-retirement benefits (“PRB”) that include health care and dental coverage for retired employees.

These post-retirement benefits terminate at the age of 75.


8. employee benefit plans (continued)

The funded status of the MFDA’s benefit plans reconciled to the amounts recorded in the financial statements at June 30 is as follows:

2010 2009 RPP SERP PRB Total Total $ $ $ $ $

Fair value of assets 5,713,200 3,624,800 - 9,338,000 7,133,600Accrued benefit obligation 7,737,200 2,706,000 1,890,100 12,333,300 8,433,000

Funded status (deficit) (2,024,000) 918,800 (1,890,100) (2,995,300) (1,299,400)

Unamortized transitional (assets)/obligation (4,200) 11,700 6,800 14,300 17,100 Unamortized net actuarial (gain)/loss 412,600 712,800 166,000 1,291,400 (642,600)

Accrued benefit plan asset (liability) (1,615,600)* 1,643,300 (1,717,300)* (1,689,600) (1,924,900)

* The total of $(3,332,900) represents accrued employee benefit plans liability as of June 30, 2010 (2009 - $(3,196,200)).

The RPP plan assets are invested in the Sceptre Balanced Pooled Fund. RPP pension benefits transferred out during fiscal 2010

totaled $39,154 (2009 - $106,296).

The total SERP assets of $3,624,800 (2009 - $2,933,600) consist of $1,757,065 (2009 - $1,385,505) which is invested in a balanced

portfolio held with RBC Wealth Management and $1,867,735 (2009 - $1,548,095) that is held in a non-interest bearing retirement

compensation arrangement account at the Canada Revenue Agency, as required by law.

The most recent actuarial valuation was completed as of July 1, 2009. The next required actuarial valuation will be as of July 1, 2012.

The net benefit expense, included in the salaries and benefit expense in the Statements of Revenues and Expenses, and the annual

contributions are as follows:

2010 2009 RPP SERP PRB Total Total $ $ $ $ $

Net benefit expense 999,300 222,000 385,500 1,606,800 2,537,300Contributions Employer 1,248,100 594,000 - 1,842,100 1,479,300 Employee 237,500 - - 237,500 227,600

The significant actuarial assumptions adopted in measuring the MFDA’s accrued benefit obligations are as follows:

2010 2009 % %

Weighted average discount rate for pensions 5.75 6.25Weighted average discount rate for post retirement benefits 5.75 6.25Weighted expected rate of return on plan assets 7.00 7.00Weighted average rate of compensation increase 4.50 4.50

The post-retirement benefits reflect a 9% to 14% annual rate of increase in the cost of medical benefits for 2011. These rates are

assumed to decrease gradually to 5% by 2021 and remain at that level thereafter. The dental benefits are assumed to increase at an

annual rate of 3.5%.


9. Credit facility

The MFDA has a demand credit facility limited to a maximum of $6,000,000 (2009 - $3,000,000). The credit facility bears an interest

rate of prime plus 0.75% per annum (2009 – prime plus 0.5%). The MFDA has granted a general security interest to the bank in

connection with this facility. During the years ended June 30, 2010 and 2009 the credit facility was not utilized. The credit line was

increased to allow for more operating flexibility.

10. Commitments and contingent liability

a) Lease obligations

The MFDA has entered into various operating leases for its office premises and four capital leases for office equipment. The capital

leases have implicit interest rates of 0.0%, 6.2%, 7.8%, and 7.9% and expire in October 2011, August 2012, July 2013, and December

2015, respectively. The aggregate future minimum lease payments associated with these four leases is $264,124 which includes

interest charges of $36,276.

Operating and capital lease obligations, excluding operating costs for future years and sales tax, are as follows: $2011 1,079,3762012 1,041,4972013 1,000,9712014 898,5262015 830,246Thereafter 544,816

5,395,432

b) Guarantee

The MFDA provided a guarantee of the $30 million line of credit granted to the IPC by the bank.

11. investment income

Investment income is comprised of the following:

2010 2009 $ $Operating Fund Distribution from money market fund 32,761 130,238 Interest from short-term T-bill fund 4,165 - Bank interest 823 35,911

37,749 166,149

Discretionary Fund Distribution from money market fund 5,303 19,074 Bank interest - 123

5,303 19,074


12. risk management of financial instruments of the Mfda

Risk management relates to the understanding and active management of risks associated with invested assets. Investments

can be indirectly exposed to interest rate, market and credit risk. The MFDA manages financial risks by regularly monitoring

the investments position, market events, and investing in pooled funds which are diversified across various debt instruments.

Significant risks that are relevant to the MFDA’s investments are as follows:

Interest rate risk

Interest rate risk refers to the adverse consequences of interest rate changes on the MFDA’s fixed income investments. The value of

the MFDA’s investments in a pooled money market fund are not significantly impacted by changes in both nominal and real interest

rates as the maturities of the money market instruments are short-term in nature.

Credit risk

Credit risk refers to the risk of financial loss due to a counterparty failing to meet its contractual obligations. The MFDA is exposed

to credit risk indirectly through its investment in a pooled money market fund. Credit risk is managed by the MFDA through dealing

with counterparties’ financial institutions. As at June 30, 2010 and 2009, the MFDA’s investments in money market and fixed income

securities are held with Tier 1 banking institutions.

Market risk

Market risk is the risk that the value of an investment will fluctuate as a result of changes in market conditions, whether

these changes are caused by factors specific to the individual investment or factors affecting all securities traded in the market.

The MFDA minimizes its exposure to market risk through its policy of investing in a pooled money market fund.

Fair value

The fair value of cash, membership fees billed in advance, MFDA Investor Protection Corporation assessments, costs recoverable

from the MFDA Investor Protection Corporation, other membership receivables, accounts payable and accrued liabilities, unearned

membership fees, membership application deposits, due to the MFDA Investor Protection Corporation, approximates their carrying

values due to their short-term nature.

The fair value of investments which include investments in a pooled money market fund and fixed income securities is based on

quoted prices from active markets.


13. funding and management of assets

The MFDA’s capital is its unrestricted net assets in its Operating Fund.

The MFDA’s objectives when managing its unrestricted net assets are:

• To safeguard the MFDA’s ability to continue as a going concern, so it can provide regulation of the mutual fund dealers for the

benefit of clients of its Members, and

• To work toward the Operating Fund reserve targets as set out by the MFDA’s Board.

The MFDA bills Members annually to ensure operations are funded. Any excess/deficit is allocated toward the accumulation/

drawdown of the operating reserve. The Board in its discretion may apply some or all of the reserve to fund future budget deficits.

The current goal for the Operating Fund as set out by the Board is 25% of the operating expense budget. As at June 30, 2010, this

target was $7.2 million (June 30, 2009 - $6.6 million) of unrestricted net assets in the Operating Fund. The actual value of the

unrestricted net assets is $3,094,693 (2009 - $3,661,006), or 43.0% of the target (2009 - $55.3% of target).

There are no external restrictions on the MFDA’s capital.

14. Hearing cost recoveries from the discretionary fund

The MFDA Board approved the use of Discretionary Funds for the purpose of paying the third party costs of the Enforcement Hearing

Panels. The amount of third party costs funded by the Discretionary Fund for the year was $438,511 (2009 – $403,142).


Executive OfficersRod M. McLeod, Q.C. Chair of the Board Ed N. Legzdins Vice-Chair of the Board Larry M. Waite President and Chief Executive Officer Mark T. Gordon Executive Vice-President

Officers Shaun Devlin Vice-President, Enforcement Karen McGuinness Vice-President, Compliance Paul Reid Director, Finance and Administration Jason Bennett Corporate Secretary and Director, Regional Councils Dale Pratt Controller Bernadette Devine Assistant Corporate Secretary

Management Directors Jeff Mount Director, Pacific Regional Office Mark Stott Director, Prairie Regional Office Paige Ward Director, Policy and Regulatory Affairs

How to Contact UsToronto Office 121 King Street West Suite 1000 Toronto, ON M5H 3T9 Phone: 416-361-6332 or 1-888-466-6332 Fax: 416-943-1218

Pacific Office 650 West Georgia Street Suite 1220, P.O. Box 11603 Vancouver, BC, V6B 4N9 Phone: 604-694-8840 Fax: 604-683-6577 Email: [email protected]

Prairie Office 800 - 6th Avenue S.W. Suite 850 Calgary, AB T2P 3G3 Phone: 403-266-8826 Fax: 403-266-8858 Email: [email protected]

For more information about the MFDA, please visit our website: www.mfda.ca

Documents

Mutual Fund Dealers Association of Canada