On Wednesday, the CSA published their proposed amendments to implement Stage 3 of the point-of-sale regime that would require delivery of Fund Facts to investors before purchase orders are submitted.  Highlights of proposed Stage 3 are:

  • Only 2 exceptions to pre-delivery: (i) pre-authorized purchase plans (similar to current simplified prospectus delivery exemption currently in place), and (ii) purchases where the investor expresses urgency and the dealer is unable to deliver the Fund Facts within the investor’s time frame (delivery instead to be made within 2 days after the trade and the dealer must provide extensive verbal disclosure prior to the trade).
  • All other pre-delivery exceptions are removed including: investor-initiated trades, trades through discount brokers, and purchases of money market funds.
  • No requirement to redeliver the Fund Facts if the investor previously received the current Fund Facts.
  • Clear belief by the CSA that service providers have created the systems to implement pre-delivery.
  • A one year transition period, likely beginning in early-2015.

Faskens will be publishing a more detailed Bulletin shortly on the Stage 3 proposals.

The period for submitting comments to the CSA closes on May 26, 2014.