No relief for fund dealers, brokers if postal workers strike, regulators say

(July 18, 2003) Mutual fund dealers and brokerages will still be required to deliver documents to investors, even if the country’s postal workers walk off the job. In notices to members issued yesterday, both the MFDA and the IDA noted that there are no regulatory exemptions available in the event of a mail disruption.

More than 45,000 members of the Canadian Union of Postal Workers (CUPW) were scheduled to strike Thursday night. But the deadline was postponed as Canada Post and CUPW continue negotiating in Ottawa.

The MFDA says that fund dealers are legally obligated to deliver prospectuses, trade confirmations, redemption payments and trade orders to investors. MFDA filing requirements also remain in effect, such as sending monthly, quarterly and annual reports by members and account statements to clients.

Fund dealers must implement arrangements to ensure ongoing compliance with applicable legal and regulatory requirements, the MFDA says, suggesting alternatives such as fax, e-mail and commercial delivery to branch offices for client pick-up.

The IDA posted a similar statement on its Web site. “While many clients now receive documents by fax or e-mail, members must take appropriate steps regarding those documents normally delivered by mail as there are no exemptions to the various document delivery requirements,” the self-regulatory organization said.

“Every effort should be made to provide clients with the opportunity to receive confirmations and monthly statements by alternative means,” the IDA added.

Earlier this week, IFIC warned that a postal strike would result in “substantial” costs to the fund industry, since firms would be forced to find alternative document delivery methods, such as private couriers.

IFIC has written a letter to the minister responsible for Canada Post, David Collenette, urging him to “monitor this ongoing situation so as to ensure a resolution without an interruption in postal service.”

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca