The Canadian Securities Administrators is expanding the scope of its proposed fund governance rule that was last published in January 2004.

The CSA will publish their latest version of a rule requiring investment fund governance on Friday, May 27.

In a recent CSA newletter, the regulators say they will now propose to make the rule apply to all publicly offered investment funds (not just conventional mutual funds), and the governance agency will call it the Independent Review Committee for Investment Funds. “It would require all publicly-offered investment funds to establish an independent committee to review and make recommendations on potential conflicts of interest,” the CSA reports.

It remains to be seen which jurisdictions will participate in the new rule. The newsletter reports that several CSA members will consult directly with affected market participants, “to gain further insight into concerns they may have about the proposal”.

Meanwhile, the British Columbia Securities Commission will be publishing its own notice to explore possible alternatives.

The CSA explains that while the BCSC supports some of the objectives of the proposed rule, it has received feedback from industry that it will be too expensive, particularly for smaller funds. “Therefore the BCSC is considering whether there are alternatives to adopting the proposed instrument that might sufficiently address its policy objectives in a more cost effective manner,” it says. “The BCSC will be asking additional questions about this and other issues in the local notice it will publish with the revised proposed instrument.”