The chairman of the industry group that supervises mutual fund dealers has stepped down following a regulatory probe into alleged market-timing violations at four Canadian fund companies.
Terrence Wright, a senior vice-president and general counsel at Investors Group Inc., resigned as chairman and a director of the Mutual Fund Dealers Association of Canada to "avoid any potential appearance of possible conflict," the MFDA said.
Investors Group is one of the four companies targeted by the Ontario Securities Commission for potential enforcement action over alleged market timing in their funds. The others are: CI Fund Management Inc., AGF Funds Inc. and AIC Ltd.
Mr. Wright resigned from the MFDA last Tuesday, the same day the OSC announced the potential enforcement action, said Larry Waite, chief executive officer of the agency.
The MFDA board accepted his resignation at a meeting last Thursday, and named Robert Wright, deputy chairman of mining company Teck Cominco Ltd. and a former chairman of the OSC, as his successor, Mr. Waite said.
Robert Wright assumes the helm at a pivotal time in the MFDA's relatively young history. In the six years since it was set up, at the behest of the OSC, the agency has kept a remarkably low profile. While it has a mandate to protect mutual fund investors from questionable sales practices, it has yet to take enforcement action against anyone.
Mr. Waite said the MFDA started taking complaints this year and expects to launch its first enforcement action as early as November.
Both the MFDA and the Investment Dealers Association of Canada, which supervises brokerage employees, are also working with the OSC on the fund probe.
As for Terrence Wright, he is also relinquishing the chairmanship of the Investment Funds Institute of Canada, a trade group for the fund industry, effective today.
His two-year term expires today, said IFIC president Thomas Hockin. IFIC typically rotates the position every one-to-two years.
Terrence Wright could not be reached for comment yesterday.
Michel Fragasso, chief operating officer of Norbourg Gestion D'Actifs Inc., will be appointed chairman at an IFIC board meeting today, Mr. Hockin said.
© 2007 The Globe and Mail. All rights reserved.
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