Canadian Securities Regulators take steps to improve mutual fund disclosure for investors

CSA Securities

Toronto – The Canadian Securities Administrators (CSA) today published for comment proposed amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, its Forms and Companion Policy, as well as related amendments, that are aimed at providing investors with improved disclosure about mutual funds.

This publication is the first step in implementing the point-of-sale disclosure framework published in October 2008 by the Joint Forum of Financial Market Regulators, which includes the CSA. Under the framework, investors would receive key information about a mutual fund at a time that is relevant to their investment decision. Investors currently receive a simplified prospectus up to two days after buying a mutual fund.

“Mutual funds are required to disclose a great deal of information, but we know that many investors do not use this information when making purchase decisions,” said Jean St-Gelais, CSA Chair and President & Chief Executive Officer of the Autorité des marchés financiers. “The current market conditions highlight the need for investors to fully understand what they are buying. This significant investor protection initiative will provide investors with the opportunity to make more informed investment decisions.”

Central to the proposal is a new two-page document called Fund Facts. The Fund Facts will be written in plain language and in a format that is easy to read and understand. It highlights important information for investors, including what the mutual fund invests in, the risks and the costs of buying and owning the mutual fund.

Under the proposal, investors would receive a Fund Facts when they buy a mutual fund they do not currently own. The simplified prospectus and other disclosure will also be available to investors upon request.

Copies of the proposed rule amendments and additional background information are available on the websites of CSA members. The CSA is seeking input from all stakeholders on the proposals. The comment period is open until October 17, 2009.

The CSA, the council of securities regulators of Canada’s provinces and territories, coordinates and harmonizes 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

Ken Gracey

604 899-6577

Financial Services Regulation Division, 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

Natalie MacLellan

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

Barbara Shourounis

306 787-5842

Yukon Securities Registry

Fred Pretorius

867 667-5225