The Canadian Securities Administrators (CSA) is seeking to modernize the regulation of so-called alternative investment funds, such as commodity pools, with a set of proposed rule amendments published on Thursday that, the regulators say, represent the final phase of their efforts to modernize investment fund regulation.
The proposals would introduce investment restrictions for alternative funds, including concentration limits, liquidity requirements, and borrowing restrictions, among other things. They would also set new disclosure requirements for alternative funds “that would clearly highlight the investment strategies that differentiate these products from conventional mutual funds.”
“In the past decade, the range of investment fund products and strategies in the marketplace has expanded significantly, both in Canada and in other jurisdictions. This initiative reflects the CSA’s efforts to modernize the existing commodity pools regime by making the regulatory framework in Canada more effective and relevant,” says Louis Morisset, the CSA’s chairman and president and CEO of the Autorité des marchés financiers, in a statement.
“We expect it will facilitate more alternative and innovative strategies while at the same time maintaining restrictions that we believe to be appropriate for products that can be sold to retail investors,” he adds.
The proposals are out for comment until Dec. 21.
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