MFDA Hearing Panel accepts settlement agreement with Portfolio Strategies Corporation

TORONTO, Aug. 17, 2020 /CNW/ - A settlement hearing in the matter of Portfolio Strategies Corporation ("Respondent") was held by electronic hearing on August 17, 2020 in Calgary, Alberta before a three-member Hearing Panel of the Prairie Regional Council of the Mutual Fund Dealers Association of Canada ("MFDA").

The Hearing Panel accepted the settlement agreement dated July 21, 2020 ("Settlement Agreement") between Staff of the MFDA and the Respondent, as a consequence of which the following sanctions were imposed on the Respondent:

• a fine in the amount of $100,000, payable as follows:
• $50,000 on the date that the Settlement Agreement is accepted;
• $50,000 within 90 days of the date that the Settlement Agreement is accepted;
• costs in the amount of $10,000; and
• shall in future comply with all MFDA By-laws, Rules and Policies, and all applicable securities legislation and regulations made thereunder, including MFDA Rules 2.2.1, 2.5.1, 2.9, and 5, and MFDA Policy Nos. 2, 4 and 5.

In the Settlement Agreement, the Respondent admitted that between:

1. prior to July 18, 2017, the Respondent did not adequately supervise and prior to July 15, 2018, the Respondent did not establish, implement and maintain adequate supervisory policies and procedures with respect to, the reasonability of Know-Your-Client ("KYC") information and the suitability of trades including consistency with KYC information, concentration in sector mutual funds and exempt market securities and the sale of DSC Mutual Funds to clients, contrary to MFDA Rules 2.5.1, 2.2.1, 5.1 and MFDA Policy No. 2;
   
   
2. prior to December 2017, the Respondent failed to maintain a branch review program that ensured that an on-site compliance review of all of its branches and sub-branches was conducted at least once every three years, in accordance with the requirements set out in MFDA Rule 2.5.1 and MFDA Policy No. 5; and
   
   
3. between March 31, 2015 and July 31, 2016, the Respondent did not maintain evidence of any nominee name reconciliations that were completed, contrary to MFDA Rules 2.9 and 5 and MFDA Policy No. 4.

A copy of the Settlement Agreement is available on the MFDA website at www.mfda.ca.

The MFDA is the self-regulatory organization for Canadian mutual fund dealers, regulating the operations, standards of practice and business conduct of its Members and their approximately 81,000 Approved Persons with a mandate to protect investors and the public interest. For more information about the MFDA's complaint and enforcement processes, as well as links to 'Check an Advisor' and other Investor Tools, visit the For Investors page on the MFDA website.

SOURCE Mutual Fund Dealers Association of Canada

Charles Toth, Vice President, Enforcement, 416-943-4619, [email protected]; Mark Stott, Vice-President, Prairie Region, 403-215-8329, [email protected]

Related Links

www.mfda.ca