Canadian securities regulators insist that they intend to require new point-of-sale disclosure for mutual funds, but, for now, the new disclosure model is to be delayed.

The Canadian Securities Administrators published a staff notice Wednesday that outlines its plan for the POS mutual fund disclosure project, which has now been underway for more than 10 years, and began ostensibly to harmonize disclosure requirements for mutual funds and segregated funds.


The notice sets out what the CSA is calling a “staged implementation”, but represents a distinct lack of certainty over when point-of-sale delivery will actually be required, as regulators study whether to extend the requirements to other sorts of investment funds, too.

The CSA says that it plans to publish, by December 2010, requirements for mutual fund companies to make the new two-page disclosure document, known as “Fund Facts”, available on their websites and upon request by investors. These requirements are expected to come into force in early 2011.

After that, in mid-2011, the CSA expects to publish for comment a proposal to allow the delivery of the Fund Facts instead of the simplified prospectus to satisfy existing disclosure requirements. Beyond that, it plans to publish for comment requirements for actual point of sale delivery for mutual funds and possibly for other types of investment funds. No date is given for that exercise.

“We think that investors would benefit from the improved disclosure in Fund Facts as soon as possible. However, based on the comments received, we believe that further review and consultation with stakeholders on issues related to point of sale delivery are necessary,” said Jean St-Gelais, chair of the CSA and president and CEO of the Autorité des marchés financiers.

“We remain committed to point of sale delivery for mutual funds, and a staged implementation will allow us to introduce Fund Facts while we fully explore point of sale disclosure and delivery options for comparable investment fund products,” St-Gelais added.

IE