According to an IDA news release, four mutual fund companies will receive a total of $6,989,402.20:
- CI Mutual Funds Inc. $3,574,894.37
- Franklin Templeton Investments $1,208,920.54
- AIC Limited $1,165,038.92
- AGF Funds Inc. $1,040,548.37
The regulatory group said 13 other fund companies will receive a total of $224,798.69, with individual amounts ranging from $546.71 to $66,393.35.
According to the announcement, an IDA disciplinary tribunal approved settlement agreements in December 2004 with BMO Nesbitt Burns Inc., RBC Dominion Securities Inc. and TD Waterhouse Canada Inc. The pacts with the three firms imposed monetary penalties totaling $41,307,154.66, comprised of $20,328,577.33 in fines and $20,978,577.33 disgorgement of revenues.
The group said revenues disgorged included commissions paid to the firms by their market timing clients as well as trailer fees paid to the firms by the mutual funds. It is the trailer fees, totaling some $7,170,047, which are being returned to the mutual fund companies for reimbursement to shareholders. The commissions disgorged and the fines imposed will be used by the IDA to cover the costs of disciplinary hearings and to support capital markets projects in the public interest.
“The IDA believes that it is fair and in the public interest that investors are protected and the funds made whole,” said Senior Vice-President, Member Regulation Paul Bourque, in the announcement. “The IDA expects mutual fund managers to administer these settlement funds to benefit unitholders in a manner consistent with their fiduciary duties under section 116 of the Securities Act (Ontario).”