Starting in May 2016, mutual fund dealers will have to give investors upfront disclosure before they decide whether to buy a fund, as regulators move ahead with point-of-sale delivery requirements for Fund Facts.

The Canadian Securities Administrators (CSA) have published amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, which will require dealers to deliver the new Fund Facts disclosure documents to investors before they make a decision to buy.

Currently, dealers have two days to provide the Fund Facts document to clients. Under the new rules, dealers will be required to deliver the disclosure before they can accept a purchase order.

The CSA’s effort to overhaul mutual fund disclosure, and to largely replace traditional prospectuses with shorter, plain language documents originally contemplated point-of-sale disclosure. But, the regulators pulled back from the original delivery requirements in the face of industry resistance. The industry complained that requiring upfront disclosure could disrupt sales and pose logistical problems.

The regulators have long insisted that they would eventually require upfront delivery of Fund Facts; and, now, they are actually moving ahead with that plan, effective May 30, 2016.

The CSA says that this approach will bring Canada in line with global regulatory standards, including the International Organization of Securities Commissions (IOSCO) principles. On the other hand, the fact that the changes don’t take effect until mid-2016 will give firms time “to update their systems, develop compliance policies and procedures and provide training to staff”, the CSA says.

“Investors are entitled to clear, easy-to-understand information that will help them decide whether a mutual fund is right for them before they buy it,” said Bill Rice, chairmam of the CSA and chairman and CEO of the Alberta Securities Commission (ASC). “Delivering the Fund Facts before investors make a decision to buy provides them access to meaningful and effective disclosure at the most critical time in the investment process.”

The new requirements will only apply to mutual funds. The CSA says that it will continue its work to develop a summary disclosure document (similar to Fund Facts) and delivery regime for exchange-traded funds (ETFs). It also says that it will continue its work on developing a standardized risk classification methodology for mutual funds.