NI 31-103 COMMENTS: CALL FOR CANADIAN WORKING GROUP VOLUNTEERS
Published: 24 May 2022
On April 28, the Canadian Securities Administrators (CSA) and the Canadian Council of Insurance Regulators (CCIR) published for comment proposed enhanced cost disclosure reporting requirements for investment funds and new cost and performance reporting requirements for individual variable insurance contracts or IVICs (Segregated Fund Contracts).
The Proposals follow on work securities regulators began after the completion of the Client Relationship Model, Phase 2 (CRM2) project in 2016 and recommendations published by the CCIR in a December 2017 position paper on segregated funds, as revised in June 2018. The Proposed Securities Amendments would apply to all registered dealers, advisers and investment fund managers.
The Proposed Securities Amendments would add the following new elements to client reporting under NI 31-103, in addition to further requirement detail available here:
• in the account statement (s.14.14) or additional statement (s.14.14.1) as appropriate, the fund expense ratio, stated as a percentage for each investment fund held by the client; and
• in the annual report on charges and other compensation (s.14.17) for the account as a whole:
• the aggregate amount of fund expenses, in dollars, for all investment funds held during the year; and
• the aggregate amount of any direct investment fund charges (e.g., short-term trading fees or redemption fees), in dollars.
AIMA Canada’s Legal, Finance & Compliance Committee will be launching a working group to consider this consultation and its potential impact to our membership. A formal comment letter will be drafted by both AIMA staff and our members to be submitted by the stated July 27, 2022 deadline. If you would like to participate in this working group or share feedback on the proposal generally, please contact Claire Van Wyk-Allan directly by May 26, 2022 as working group meetings will commence shortly thereafter.