Mutual fund regulator collected just 16 per cent of fines ordered last year

The Mutual Fund Dealers Association of Canada collected about 16 per cent of fines imposed last year in disciplinary actions, based on the self-regulatory agency’s annual report.

Sixty-five hearings were completed, with total fines of nearly $5.4 million imposed. The MFDA collected $843,982 of this amount.

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In all provinces except for Alberta, the self-regulatory organization has powers to gather fines only from those who remain in the as Approved Persons regulated through the MFDA. However, the annual report says the mutual fund dealers association is seeking to achieve the Capital Markets Act revised to permit self-regulatory organizations to file disciplinary decisions directly using the courts. This could allow them to be enforced as a court order.

Collecting fines and other financial penalties is definitely a challenge for regulators, particularly self-regulatory agencies like the MFDA and the Investment Industry Regulatory Organization of Canada, also is seeking changes to enlist court assistance with collections.

Since the MFDA began taking disciplinary action in 2004, hearing panels have imposed total fines of nearly $52-milion, which just shy of $6.4 million (12 percent) has been collected.