New guidance flags when promoting foreign ETFs crosses into prospectus territory
Canadian regulators are reminding fund managers and dealers that marketing foreign-listed ETFs to Canadian investors can trigger prospectus and registration requirements.
The Canadian Securities Administrators and the Canadian Investment Regulatory Organization published Joint Staff Notice 81-339 on July 29, 2026, setting out guidance on industry practices tied to exchange-traded funds that trade on foreign exchanges but not on a Canadian one. Staff said the notice responds to feedback gathered through a 2025 consultation on the ETF regulatory framework, and it does not create new legal requirements - it clarifies how existing rules apply.
The guidance lands as the Canadian ETF market keeps expanding. Net assets in Canadian ETFs rose from $114 billion in 2016 to $713 billion by the end of 2025, according to the notice, with growth of 36 percent from 2023 to 2024 and 38 percent from 2024 to 2025. Net sales climbed from $16.4 billion in 2016 to $125.8 billion in 2025. As of March 2026, foreign ETFs made up roughly a quarter of all ETF assets that Canadian retail investors held at Canadian registered dealers.
For wealth managers and fund managers, the notice's central message is about marketing. Staff wrote that actively promoting a foreign ETF in Canada - through wholesaling to dealers, paid incentives, advertising in Canadian or social media, listing the fund on a Canadian affiliate's research tools, or cross-listing it on a Canadian exchange - could count as a distribution and trigger the prospectus requirement. In Ontario, Quebec, and Newfoundland and Labrador, that same marketing activity could also trigger the investment fund manager registration requirement for the foreign ETF's manager.
Dealers and advisors face their own checklist. The notice reminds registrants of existing know-your-product, know-your-client, and suitability obligations under National Instrument 31-103 when recommending or purchasing a foreign ETF for a client, including weighing tax treatment, currency conversion costs, and the more limited disclosure - such as the absence of an ETF facts document - that typically accompanies foreign-listed funds. Order execution-only dealers are encouraged, though not required, to give investors an alert or notification before they buy a foreign ETF, flagging these differences from Canadian-listed alternatives.
Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission, said the guidance "encourages practices that support investors in making more informed decisions when choosing between Canadian and foreign ETFs." Andrew J. Kriegler, President and CEO of CIRO, said it would help ensure Canadian investors who buy foreign ETFs "have a clear understanding of the products they are investing in."
The regulators said they will keep monitoring the space and will consider further policy steps if needed, alongside ongoing reviews of dealer compliance with marketing, KYC, KYP, and suitability rules.
The full text of Joint CSA/CIRO Staff Notice 81-339 is available at https://www.securities-administrators.ca/news/csa-and-ciro-issue-guidance-on-foreign-listed-etf-practices/#81339.
