The Canadian Securities Administrators (CSA) published proposed rule changes on Thursday that would require fund managers to use a standardized methodology for determining the risk level for mutual funds to use in their Fund Facts disclosure documents and for exchange-traded funds (ETFs) to use in ETF Facts documents.

The proposed methodology for classifying funds would retain the current five-category risk rating scale rather than expanding to six categories as initially proposed. The proposed categories would align with the existing Investment Funds Institute of Canada methodology that many fund managers already use to measure risk.

The new methodology would continue to use standard deviation as the basic risk measure for funds that have a 10-year performance history and it would establish principles for fund managers to follow when selecting a reference index as a proxy for funds that don’t have a 10-year history. Finally, the proposal would only require fund managers to assess their funds’ risk level annually rather than monthly, as earlier proposals suggested.

“The introduction of a standardized mutual fund risk classification methodology will result in greater transparency and consistency, which will allow investors to more readily compare the investment risk levels of different mutual funds,” says Louis Morisset, the CSA’s chairman and president and CEO of the Autorité des marchés financiers. “We believe that the proposed methodology will benefit both investors and market participants.”

Given that the CSA’s proposed methodology largely follows the methodology that’s already in use at most fund managers — and as firms will only be required to reassess their funds annually — the CSA’s proposal says the expected costs of complying with the proposals “will be minimal” as most fund managers are alreadyfollowing this approach to determining risk levels.

The CSA is aiming to publish final rules implementing these amendments in the fall of 2016, with the requirements taking effect three months after that. In the meantime, the proposals are out for a 90-day comment period, with comments due by March 9, 2016.