pexels-photo-27406Commencing March 8, 2017, new rules relating to the risk classification of conventional mutual funds and exchange-traded funds (collectively, mutual funds) will come into force. The new rules will primarily involve amendments to National Instrument 81-102 Investment Funds (NI 81-102), but will also involve consequential amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), certain forms under NI 81-101, and its companion policy (the Amendments).

The Canadian Securities Administrators (CSA) initially introduced the idea of a standardized risk classification methodology applying to all mutual funds in December 2013 and later refined it in draft amendments published in December 2015. The CSA considered the comments it received on both publications in developing this final version of the Amendments, which is largely similar to the 2015 version.

Pursuant to the Amendments, mutual fund managers will be required to use a standardized methodology, based on standard deviation, to classify the investment risks of their mutual funds. Currently, mutual fund managers are permitted to adopt a risk classification methodology of their own choosing, provided it is described in the mutual fund’s prospectus and fund facts. The CSA believe that a standardized methodology will allow investors to better compare the investment risk levels of different mutual funds.


Continue Reading Mutual Fund Risk Classification Methodology Amendments to come into force March 8, 2017

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 Ontario Securities Commission (OSC) released Staff Notice 33-743 – Guidance on Sales Practices and Expense Allocation for Investment Fund Managers which resulted from the targeted review of large investment fund managers (IFMs) conducted by Staff of the Compliance and Registrant Regulation Branch of the OSC.  The Notice provides a summary

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

The notice sets out guidance from staff of the OSC’s Investment Funds Branch based on a targeted continuous disclosure review of the advertising and marketing materials (including presentations, internet ads, social media, radio ads, email blasts and green sheets) of publicly offered investment funds.

The notice provides guidance on the definition of sales communication, the

The Canadian Securities Administrators (CSA) published on March 27, 2013 a Notice and Request for Comments on amendments to National Instrument 81-102 Mutual Funds (NI 81-102) and consequential amendments to National Instrument 41-101 General Prospectus Requirements (NI 41-101) and its Form 41 102F2 (the 81-102 Proposals).  These amendments introduce core operational requirements for publicly offered