CSA publishes final rule for alternative mutual funds

By Staff | October 4, 2018 | Last updated on October 4, 2018
1 min read
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It’s here: CSA’s final rule for alternative mutual funds, which gives retail investors access to products that use strategies thus far restricted to accredited and institutional investors, will come into effect Jan. 3.

CSA’s final amendments, published Thursday, rename commodity pools as “alternative mutual funds” and streamline the regulatory regime governing these products by moving most of the regulatory framework in National Instrument 81-104 Commodity Pools into National Instrument 81-102 Investment Funds.

No material changes were made to the previously proposed amendments. Further, no changes were made to proficiency requirements. Mutual fund dealer proficiency requirements in Part 4 of the commodity pools rule are being retained.

Effective on Jan. 3, 2019, the amendments update restrictions for alternative mutual funds to allow greater flexibility with investing strategies, with a focus on strategies typically associated with liquid alternatives. These include increased concentration limits, more flexibility for fund-of-fund investing, leveraging (300% of the fund’s assets, including hedging), shorting (50% of the fund’s assets) and derivatives use, among others.

Changes also simplify prospectus requirements so that alternative mutual funds will be under the prospectus disclosure regime applicable to conventional mutual funds. Further, changes codify certain routine exemptive relief granted to mutual funds.

Read CSA’s new rule for alternative mutual funds.

Also read:

Know the limits in CSA’s alternatives proposal

Should average investors use alts?

Hurry up and learn while you wait for alternative investments

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.