MFDA Announces New Proficiency Standards For Selling ETFs

Introduction

On July 20, 2017, the Mutual Fund Dealers Association (the "MFDA") announced the regulatory approval and coming into effect of its new Policy No. 8 – Proficiency Standard for Approved Persons Selling Exchange Traded Funds ("ETFs") (the "Policy").¹ The Policy outlines new minimum training and educational requirements for a member of the MFDA ("Member") or an Approved Person² dealing with an exchange traded fund ("ETF"). The goal of the Policy is to ensure compliance with MFDA Rule 1.2.3 (Education, Training and Experience) and National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Obligations ("NI 31-103").

The Policy

While MFDA Members and Approved Persons may sell ETFs that meet the definition of a mutual fund, there are important differences between ETFs and conventional mutual funds. For example, conventional mutual funds are traded as a primary distribution with the issuer, while ETFs are mutual funds that are traded in