MFDA Agreement of Approved Person: What You Need to Know
The Mutual Fund Dealers Association (MFDA) Agreement of Approved Person is a document that outlines the requirements and obligations of individuals who are approved by the MFDA to act as a mutual fund salesperson or supervisor. If you`re interested in pursuing a career in the mutual fund industry, it`s important to understand what this agreement entails and how it applies to you.
What is the MFDA Agreement of Approved Person?
The MFDA Agreement of Approved Person is a legal agreement between the MFDA and an individual who is approved to sell mutual funds or supervise other mutual fund salespersons. The agreement sets out the rules and regulations that govern the individual`s conduct, including their obligations to clients and their responsibilities to their firm.
What are the requirements for becoming an approved person?
To become an approved person with the MFDA, you must meet certain qualifications and pass an examination. These qualifications include completing a Canadian Securities Course (CSC) or equivalent, passing the MFDA Conduct and Practices Handbook Course, and passing the MFDA Mutual Fund Course Exam.
You must also meet certain suitability requirements, which involve disclosing any past bankruptcies, criminal convictions, or disciplinary actions. In addition, you must be sponsored by an MFDA member firm in order to be approved.
What are the obligations of an approved person?
Once you become an approved person, you are subject to a number of obligations under the MFDA Agreement of Approved Person. Some of these obligations include:
1. Acting in the best interests of clients: As an approved person, you have a fiduciary duty to act in the best interests of your clients and to provide them with suitable investment advice.
2. Complying with MFDA rules and regulations: You must comply with all of the MFDA`s rules and regulations, including those related to client communication, record-keeping, and conflict of interest.
3. Disclosing conflicts of interest: If you have a conflict of interest, you must disclose it to your clients and your firm.
4. Continuing education: You must complete ongoing education requirements to maintain your approval as an MFDA-approved person.
What are the consequences of violating the MFDA Agreement of Approved Person?
If you violate the MFDA Agreement of Approved Person, you may be subject to disciplinary action by the MFDA. This may include fines, suspension, or revocation of your approval to sell mutual funds. In addition, your firm may take disciplinary action against you.
The MFDA Agreement of Approved Person is an important document for anyone interested in pursuing a career as a mutual fund salesperson or supervisor. It outlines the requirements and obligations that come with being an MFDA-approved person, including acting in the best interests of clients, complying with MFDA rules and regulations, and disclosing conflicts of interest. If you`re interested in becoming an MFDA-approved person, it`s important to understand what this agreement entails and to comply with its requirements.