IFIC asks CSA to reconsider fund disclosure rules

By James Langton | December 9, 2019 | Last updated on December 9, 2019
2 min read

Fund industry trade group the Investment Funds Institute of Canada (IFIC) is calling on regulators to reassess industry disclosure requirements as part of their push to curb needless compliance costs.

In a submission to the Canadian Securities Administrators (CSA), IFIC said it’s time to critically re-examine the existing disclosure regime for investment funds — particularly given the development of core investor disclosure documents, Fund Facts and ETF Facts, in recent years, which has rendered the existing regime “obsolete or redundant.”

IFIC said the CSA should examine the existing disclosure regime to ensure that it meets the diverse needs of investors, advisors (in meeting their know-your-product obligations) and regulators.

“Investors, advisors and regulators each have different information needs, and the ultimate objective must be to provide disclosure that is both meaningful to each stakeholder and delivered in the manner each prefers,” said Paul Bourque, president and CEO of IFIC, in a statement.

Among other things, IFIC recommended eliminating duplicative disclosure requirements; revisiting the content of prospectus requirements; reconsidering the continuous disclosure regime for investment funds; and creating a new information circular that is tailored to investment funds.

The recommendations come in a submission to the CSA commenting on a set of proposals designed to curb the regulatory burden on investment fund issuers — a project that predates the Ontario Securities Commission’s (OSC) own burden reduction initiative, which issued 107 reform recommendations last month.

IFIC said it supports the CSA’s efforts to ease regulatory burden in the investment fund sector, but that it would like to see regulators go further.

“The regulatory burden reduction project presents an opportunity to critically reassess the disclosure regime,” it says.

Along with reforming the disclosure regime, the industry group also called on the CSA to pursue operational efficiencies in its own processes; to codify routine regulatory relief; and to expand its cost-benefit analysis and employ regulatory impact analysis in the rule-making process.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.