Notwithstanding some improvements to the proposed new regime for point-of-sale disclosure for both mutual funds and segregated funds, the Investment Industry Association of Canada still has some complaints.

The IIAC says that while the Joint Forum of Market Regulators are not officially seeking comment on its proposed point-of-sale regime, it is offering some anyway, in response to a presentation held in June to outline the project’s status.

The trade association says that it approves of the effort to accommodate many of its concerns in the latest version of the proposed regime, including: providing more certainty about the trigger point for the cooling off right, the removal of the perpetual right of rescission, that disclosure will no longer be required for any subsequent purchases of the same fund, and that the content of the proposed disclosure document will be revised “to provide clarity surrounding information on fees and compensation”.

However, it notes that it still has some concerns with the revised framework. It warns about uncertainty about whether a trade is considered recommended by the advisor or initiated by the investor, noting that many firms will likely deliver the disclosure anyway to avoid confusion. “The result would be that despite two options in the revised framework, members firms would not recognize this distinction and continue to provide a Fund Facts to every single client, regardless of the client’s desire to waive acknowledgement of receipt,” it says.

It worries that this distinction will also put full service firms at a competitive disadvantage with the discount brokerage firms who will generally be exempt from the requirement to deliver a Fund Facts.

The IIAC also says that firms are currently facing significant operational issues due to the new PPN legislation, and that they will face similar hurdles in implementing the requirements of the revised framework.

The trade association adds that it is also somewhat concerned that there appears to have been no discussion regarding the implementation of the revised framework with the relevant regulators, such as the Investment Industry Regulatory Organization of Canada or the Mutual Fund Dealers Association of Canada. “We urge the Joint Forum to engage in discussions and rule review with the self-regulatory organizations as soon as possible,” it says.

“Lastly, we request some clarification regarding the discussion of the method of delivery of the Fund Facts that occurred at the presentation,” the IIAC says. It notes that while it was clear that the Joint Forum would not consider adopting an “access equals delivery” approach, during the presentation the regulators stated that there would be the ability to e-mail to the investor a link to the Fund Facts located on a fund company’s website. “To the association, this would accomplish an access equals delivery approach. However, as there were no written documents accompanying the presentation, we would like to ensure that our understanding of this widening of the definition of electronic delivery is correct.”