In a joint announcement published April 20, the Canadian Securities Administrators (CSA) and the Canadian Council of Insurance Regulators (CCIR) published cost reporting rule changes for investment funds and segregated fund contracts. “The Total Cost Reporting (TCR) enhancements will improve the transparency of total fees and costs to holders of investment funds and segregated funds,” the organizations state in their announcement.

The enhancements require annual reporting to clients showing the ongoing embedded costs of owning investment and segregated funds.

Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission says the additional transparency created by the enhancements, “will help investors ask their dealing representatives and life insurance agents the right questions and make better-informed decisions, which should ultimately result in better investing outcomes.” 

Developed jointly by the CSA, the CCIR, the Canadian Insurance Services Regulatory Organizations (CISRO) and the New Self-Regulatory Organization of Canada (New SRO), the published enhancements reflect several changes recommended during the comment period, including an extended transition period. During the comment period, the CCIR and the CSA received 38 letters offering feedback. Some changes made include removal of the requirement to report monthly or quarterly, instead requiring fund and contract manufacturers to report annually to investors. 

The enhancements will be reflected in changes to 

  • National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations 
  • Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations 
  • Individual Variable Insurance Contract Ongoing Disclosure Guidance 
  • Amended New SRO member rules, policies and guidance

“The CCIR expects that each of its member jurisdictions will adopt the framework by local guidance or, in certain jurisdictions, regulation,” they write.

The enhancements take effect January 1, 2026, with clients receiving their first annual reports for the year ending December 31 that year.

“The TCR Enhancements are part of the joint regulators’ harmonized response to concerns we have identified relating to current cost disclosure requirements for investment funds and segregated funds and product performance reporting requirements for segregated funds,” the CCIR’s notice of publication states. “One important concern which we aim to address is that there are currently no requirements for securities industry registrants or insurers to provide ongoing reporting to investors and policyholders on the amount of such costs after the initial sale of the investment product, in a form which is specific to the individual’s holdings and easily understandable.” 

Industry responds 

In response to the published requirements and clarifications, several organizations took the opportunity to welcome the changes, the Investment Funds Institute of Canada (IFIC), the Investment Industry Association of Canada (IIAC), and the Canadian Life and Health Insurance Association (CLHIA) among them. 

The organizations in particular highlight the creation of a standing implementation committee to help regulators and the industry overcome operational and technical barriers to implementation. “Providing investors with more complete fee information related to the investment funds they hold is the ultimate goal for regulators and the industry,” says IFIC’s president and CEO, Andy Mitchell. “It is our view that the CSA’s approach will achieve this goal.” 

The CLHIA, meanwhile, agrees the enhancements “will result in better information for consumers to make informed investment choices and allow for continued strong competition and innovation in the market,” says Stephen Frank, CLHIA president and CEO. “The CLHIA is pleased that these changes are being made simultaneously for both investment products,” the association’s statement adds.