The proposed amendments represent the culmination of many years of review and research undertaken by securities and insurance regulators under their Joint Forum initiative to develop a better approach to providing meaningful and effective disclosure to mutual fund investors. As such, the proposed amendments announced in this notice form the first phase of this joint approach. The second phase involves a review of the overall disclosure regime for mutual funds with a view to reducing duplication.
As initially proposed in the Joint Forum’s Proposed Framework published on June 15, 2007 and as revised on October 24, 2008, the proposals focus on the delivery of a simple and concise “Fund Facts” document. In response to comments received on the framework, the regulators have, however, modified their approach to how the Fund Facts document is to be delivered.
As under the Framework, the proposed amendments require the Fund Facts document to be filed concurrently with the mutual fund’s simplified prospectus and annual information form. Managers may, however, choose to periodically update the disclosure by filing an updated document on SEDAR. The document must also be amended if there is a material change to the mutual fund that requires a change to the disclosure set out in the Fund Facts document. In addition, the proposed amendments require the delivery of the Fund Facts document generally for all initial purchases that are recommended to an investor before or at the point of sale, although it is not required to be delivered for subsequent purchases of a mutual fund held in the investor’s account. Dealers will also have to give investors the option to receive the Fund Facts document annually and the most recently filed Fund Facts document will also have to be posted to the website of the mutual fund, mutual fund family or manager.
Feedback is requested, particularly on implementation issues, with a deadline to submit comments of October, 17, 2009.