The Joint Forum of Financial Market Regulators has completed public consultations on proposals for a new system of providing disclosure to purchasers of mutual funds and segregated funds.

It reports that its efforts to improve and harmonize financial services regulation across sectors and jurisdictions received strong support in the more than 30 submissions that were received. These responses are available on the web sites of the Canadian Council of Insurance Regulators and the Ontario Securities Commission.

“We were very pleased with the responses and with the high level of support for the approach we are recommending,” said David Wild, chair of the Joint Forum and chair of the Saskatchewan Financial Services Commission. “Moreover, the suggestions brought forward by respondents will help us fine-tune our proposals and make the documents even more useful to consumers as sources of information and education.”

The most significant element of the proposal is a “layered” approach to disclosure, which aims to make material available in components that are readily understood and delivered at the most appropriate time for the consumer. This includes a generic consumer’s guide that explains mutual funds and segregated funds, and an easy-to- read one- or two-page fund summary document that will be given to all consumers at the point of sale.

More detailed information relating to the fund will be available in each fund1s foundation document and continuous disclosure record. This system will allow consumers to choose how much information they want.

“We believe the current system tends to overwhelm consumers by asking them to wade through mountains of paper that currently accompany the purchase of segregated funds or mutual funds,” said Wild. “We think the new approach of providing the right information at the right time will be a great step forward.”

Members of the Joint Forum will be studying these responses as they finalize the point of sale disclosure recommendations. Several issues have been raised for further consideration. These include whether disclosure should be on an individual or family-of-fund basis, the method by which information will be delivered to the consumer, and whether rescission and withdrawal rights should be continued. “The proposals provide more useful information to investors and let the investor choose how to receive it,” added Wild.