The Canadian Securities Administrators (CSA) has published amendments to eight different initiatives aimed at cutting the regulatory burden for investment funds. Specifically, the changes eliminate duplicative requirements, streamline regulatory approvals and processes, and codify frequently granted exemptions from certain requirements.
“These initiatives are wide-ranging and will result in cost and time savings to investment funds and their managers, while maintaining investor protection and market efficiency,” said Louis Morisset, CSA Chair and president and CEO of the Autorité des marchés financiers.
The initiatives include:
- Investment funds in continuous distribution only have to one streamlined document every year rather than a simplified prospectus and annual information form;
- Investment funds must indicate a website where all their regulatory disclosures are posted. This is aimed at improving investor access to disclosure and potentially creating opportunities to reduce further initiatives;
- Investment funds will not be required to file personal information forms with securities regulators as frequently;
- Investment funds no longer have to apply to securities regulators for exemptive relief to use the notice-and-access system, as well as from certain conflict of interest rules and from the requirement to deliver fund facts documents and ETF facts documents for model portfolio products, portfolio rebalancing services and automatic switch programs, and
- Investment funds no longer have to ask for regulatory approval for a change of manager and there will be fewer instances where regulatory approval to engage in a merger is required.
First stage set
These amendments complete the first stage of the CSA’s initiative to reduce the regulatory burden on investment fund issuers. Other stages will include further examination of the prospectus filing regime, modernizing the continuous disclosure regime and exploring alternatives to the current requirements for delivering various investment fund-related materials.
Most of the amendments will come into force at the beginning of January. There are exemptions available from some of the requirements to give issuers more time to comply.