The Canadian Securities Administrators are proposing a new regulatory regime governing the continuous disclosure requirements for investment funds.

The proposed National Instrument 81-106, Investment Fund Continuous Disclosure, is intended to apply to all types of investment funds including mutual funds, labour-sponsored investment funds, exchange traded funds, split share corporations, closed end funds and scholarship plans.

The significant provisions of the proposed National Instrument are the introduction of annual and quarterly management reports of fund performance. A key feature of the management reports will be management discussion of fund performance that will analyze and explain the past performance of the fund and the strategic position of the fund.

The updated requirements for financial statements will provide a consistent set of rules among jurisdictions and improve the presentation of financial information. Timelines for filing financial statements will be reduced to provide for more timely disclosure. Each year investors will be able to choose whether they want delivery of financial statements and management reports of fund performance.

It will allow incorporation by reference of the management reports of fund performance into the simplified prospectus. Information currently required in the simplified prospectus such as top ten holdings, past performance and financial highlights will now be disclosed in the annual and quarterly reports of fund performance.

The comment period expires on December 19.