Regulator details a year of new products and fund rule changes
Exchange-traded funds captured 23 per cent of Canadian investment fund assets in fiscal 2026, Ontario's securities regulator says, as crypto and leveraged ETFs surged.
The Ontario Securities Commission's Investment Management Division released its Fiscal 2026 Annual Summary Report on September 15, covering a year in which regulators approved a wave of novel investment products alongside several rule changes affecting Canadian fund managers and advisers.
The division's report shows ETFs' share of total investment fund assets under management climbing to 23 per cent as of March 31, 2026, from 19 per cent a year earlier, with conventional mutual funds slipping to 75 per cent from 79 per cent. ETF assets under management rose 41 per cent over the year, compared with 31 per cent growth in the prior year, with more than $125 billion of that increase attributable to net sales and the remainder to favorable market movement.
The division noted the launch of several previously unavailable products during the year. In April 2025, Canadian regulators issued receipts for the first AAA-rated collateralized loan obligation ETFs, after determining the underlying assets were not "illiquid" under fund rules. The report also detailed the arrival of Solana and XRP exchange-traded funds offering direct spot exposure, both of which began trading on the Toronto Stock Exchange within weeks of futures contracts launching in the United States, as well as Canada's first triple-leveraged index ETFs, which began trading in May 2025.
On the policy side, the division said it completed amendments modernizing continuous disclosure requirements, including a new conflict-of-interest reporting form for related-party transactions, alongside a second phase of rules governing crypto asset funds and updates to the principal distributor model used to distribute mutual funds. Ongoing initiatives include proposed amendments on liquidity-risk/391885">liquidity risk management, for which a 120-day comment period closed on March 27, 2026, and continued work on enhanced exchange-traded fund regulation, which produced a joint staff notice with the Canadian Investment Regulatory Organization on July 29, 2026 addressing industry practices around foreign-listed ETFs.
The report also touched on the OSC's Long-Term Asset Fund project, an initiative exploring new fund structures that could give retail investors access to venture capital, private debt and equity, and infrastructure and natural resource investments, and confirmed that the Investment Funds Technical Advisory Committee will be paused as the OSC pilots a new Capital Markets Advisory Committee.
The division said it conducted 309 prospectus reviews, 177 exemptive relief applications and 235 continuous disclosure reviews during the fiscal year, overseeing 111 Ontario-based investment fund managers responsible for the bulk of more than 4,800 publicly offered investment funds in the province.
The full text of the OSC Staff Notice 81-741 Investment Management Division Annual Summary Report is available at https://www.osc.ca/en/news-events/news/osc-publishes-investment-management-division-annual-summary-report-0.
