Canadian Securities Regulators propose disclosure enhancements to fund facts

CSA

Toronto - The Canadian Securities Administrators (CSA) today published for a second comment period proposed amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, which were originally published in August 2011 (2011 Proposal).

In the 2011 Proposal, the CSA set out Stage 2 of the implementation of the point of sale framework for mutual funds, which proposed amendments to allow delivery of the Fund Facts document to satisfy prospectus delivery requirements. The Fund Facts document is central to the point of sale initiative. It is in plain language, no more than two pages double-sided and highlights key information about a mutual fund that is important to investors.

Based on investor and stakeholder feedback on the 2011 Proposal, the CSA are now proposing changes to the content of the Fund Facts document, in particular, the presentation of risk in the document. Some of the more notable changes to the Fund Facts document include:

  • Adding an explanation of the risk scale and the relationship between risk and losses;
  • Requiring a list of some of the specific risk factors that could impact a fund's returns; and,
  • Including a comparison of the mutual fund's performance with a low risk investment - a one-year Guaranteed Investment Certificate.

"The CSA's proposals are an important step in the implementation of this investor-focused initiative," said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission. "The proposed changes to the Fund Facts are intended to provide more effective disclosure to assist investors in making informed investment decisions."

During the second comment period, the CSA will also conduct further document testing of the Fund Facts with investors to inform the final changes to the document.

To view the proposed amendments, please refer to the CSA Notice on NI 81-101 Mutual Fund Prospectus Disclosure, which is available on the websites of CSA members. A sample Fund Facts including the proposed changes is available in Appendix A of the Notice. The comment period is open until September 6, 2012.

The CSA, the council of the securities regulators of Canada's provinces and territories, co-ordinate and harmonize regulation for the Canadian capital markets.

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For more information:

CSA member name

Point of contact

Phone number

Autorité des marchés financiers

Sylvain Théberge

514-940-2176

Alberta Securities Commission

Mark Dickey

403-297-4481

British Columbia Securities Commission

Richard Gilhooney

604-899-6577

Financial Services Regulation Div. Newfoundland and Labrador

Doug Connolly

709-729-2594

Manitoba Securities Commission

Ainsley Cunningham

204-945-4733

New Brunswick Securities Commission

Wendy Connors-Beckett

506-643-7745

Northwest Territories Securities Office

Donn MacDougall

867-920-8984

Nova Scotia Securities Commission

Tanya Wiltshire

902-424-8586

Nunavut Securities Office

Louis Arki

867-975-6587

Ontario Securities Commission

Carolyn Shaw-Rimmington

416-593-2361

PEI Securities Office, Office of the Attorney General

Janice Callbeck

902-368-6288

Saskatchewan Financial Services Commission

Dean Murrison

306-787-5879

Yukon Securities Registry

Helena Hrubesova

867-667-5466