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The long-awaited amendments to reduce the regulatory burden on investment funds were published by the Canadian securities administrators (CSA) in final form on October 7, 2021 and take effect on January 5, 2022. The amendments mostly relate to housekeeping matters that reduce very little regulatory burden, while other aspects might actually increase regulatory burden in the short term. We are disappointed that the CSA did not introduce a number of additional changes that would have had a far greater impact on reducing the regulatory burden on industry participants.
Continue Reading Securities Law Amendments to Reduce the Regulatory Burden on Investment Funds

On October 4, 2018, the Canadian securities administrators published the final version of the amendments that will create a new regime for liquid alternative mutual funds (alt funds).

The regime will come into effect on January 3, 2019 and could provide retail investors with greater access to alternative investment strategies, including leveraged and market neutral portfolios.


Key to the regime is the ability of alt funds to use leverage. The leverage limit is effectively set at 4X the alt fund’s net asset value (NAV) and can be achieved through a combination of derivatives (alt funds are not required to hold cover for their derivatives), short selling (alt funds do not need to set aside cash cover for their short sales, and can reinvest their short sale proceeds in additional long positions) and borrowing. There will be a cap set at 50% of NAV for the aggregate amount of exposure through short sales and borrowing, with a further cap of 10% per issuer sold short (other than government securities). These caps are somewhat arbitrary within the overall 4X leverage limit, but are based on the investment restrictions the securities regulators saw in the closed-end fund space. Accordingly, 130/30 funds and other levered funds can be launched as alt funds, but the 50% cap on short sales means that a market neutral fund using a pairs trading strategy will need exemptive relief.

Interestingly, the final amendments include a new feature allowing alt funds to enter into derivatives with counterparties who do not have a designated rating.Continue Reading The New Liquid Alt Funds Regime – and some changes for conventional mutual funds and closed-end funds

The previously published amendments (Phase 2 amendments) to NI 81-102 as part of the CSA’s fund modernization project are now in effect.

For mutual funds, the changes include:

  • a new prohibition against investing in closed-end funds (subject to an 18-month transition period for existing mutual funds), and
  • new sales communications requirements for mutual funds following

On June 19, 2014, the Canadian Securities Administrators (CSA) released, in final form, amendments that will apply a number of new requirements and restrictions to closed-end funds (Phase 2 amendments).  These include:

  • a prohibition against issuing any warrants (whether as part of an initial public offering, or subsequently to existing unitholders),
  • a prohibition against

Easily overlooked in the drama of last Friday’s Ontario election call was that the Budget bill which brought down the Liberal government included proposed amendments to extend the conflict of interest investment restrictions in Part XXI of the Securities Act to public closed-end funds.  Last year’s proposed amendments to NI 81-102 and NI 81-104 (Phase

On April 17, 2014, the OSC published proposed changes to the new derivatives reporting rule which delay implementation and lighten some of the reporting burden on end-users.

Under the proposed changes, the new implementation timeline will be as follows:

  • New transactions: Reporting of new transactions commences on October 31, 2014 for derivatives dealers (previously July

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),