On June 18, 2015, the Canadian Securities Administrators (CSA) published proposed legislative amendments to the disclosure framework for exchange-traded funds (ETFs). If implemented, such amendments will require ETF managers to produce a summary disclosure document called “ETF Facts”. The ETF Facts for an ETF will need to be filed at the same time as the ETF’s prospectus. Dealers will also be required to deliver the ETF Facts to investors within two days of the purchase of an ETF’s securities. Delivery of an ETF’s prospectus will not be required (unless an investor requests it) and the use of ETF Facts will mirror that of “Fund Facts” currently applicable to regular mutual funds.
The intent of the ETF Facts is to provide investors with key information about an ETF in a more easily understandable format. This new regime is also intended to replace the existing disclosure regime currently potentially available to ETF managers as a result of exemptive relief. Managers who have obtained such relief are permitted to fulfil the prospectus delivery requirements for an ETF through delivery of a summary disclosure document instead.
For more information, including a sample of the proposed ETF Facts, please see CSA Notice and Request for Comment – Mandating a Summary Disclosure Document for Exchange-Traded Mutual Funds and its Delivery.
Comments on the rule changes are due by September 16, 2015, with the amendments due to come in force by early 2016. Implementation is expected to occur in stages between 2016 to 2018.