The Mutual Fund Dealers Association of Canada (MFDA) requires member firms to have policies and procedures to manage outside business activities (dual employment). A key condition is that the outside activity must not interfere with the representative's ability to service clients or with the member's supervisory responsibilities. By holding client orders for several days due to her absence, Karen's dual employment arrangement violates the dealer's obligation to ensure continuous and timely service to clients.

A. The issue described is a service delay, not a conflict of interest, although conflicts can arise from dual employment.

B. Working as a language instructor is a reputable profession and is unlikely to bring the mutual fund industry into disrepute.

D. While dealer approval is required, the violation described is the consequence of the arrangement (poor service), not the lack of approval itself.

1. Mutual Fund Dealers Association of Canada. (2021). MFDA Rule 1.3 (formerly 1.2.1(d)) Outside Activity. This rule requires members to establish procedures to ensure outside activities do not compromise client service.

2. Mutual Fund Dealers Association of Canada. (2008). MFDA Policy No. 2 Minimum Standards for Account Supervision. Section 2.3 emphasizes the need for timely handling of client orders.

3. Canadian Securities Institute. (2023). Investment Funds in Canada. Chapter 14: Ethics and Professional Conduct, Section 14.3, "MFDA Rules on Outside Business Activities".