CSA provide update on mutual fund point of sale disclosure
Staff of the Canadian Securities Administrators (CSA) recently published a notice providing an update on the point of sale disclosure project for mutual funds. The update follows the CSA's consideration of comments to proposed amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, which were published in June 2009. Despite some compliance concerns by commentators, the CSA made clear in the notice that they remain committed to implementing point of sale disclosure for mutual funds.
The CSA intend to proceed with a staged implementation of the project, which according to the notice, will provide the CSA "the opportunity to continue to consult with stakeholders and to consider the applicability of the point of sale regime for mutual funds to other types of publicly offered investment funds". Specifically, the CSA intend to proceed by first finalizing the requirements respecting the preparation and filing of a "Fund Facts" document, which would be posted on the mutual fund's or manager's website and provided to an investor upon request. The CSA expect to publish such requirements by December 2010, with an effective date in early 2011. Second, the CSA intend to publish for comment, in mid-2011, a proposal to allow delivery of the Fund Facts document to satisfy prospectus requirements to deliver a prospectus within two days of buying a mutual fund. While the CSA work on the proposal, they plan to consider applications for exemptive relief to use Fund Facts to satisfy current prospectus requirements. Finally, the CSA intend to publish requirements for point of sale delivery for mutual funds and possibly for other types of publicly offered investment funds once it has completed the review of relevant issues.
