PMAC releases recommendations to CSA

Association sets out its response to the request for comment to reduce regulatory burden

PMAC releases recommendations to CSA

The Portfolio Management Association of Canada has submitted its response to the CSA Notice and Request for comment around its initiative to reduce regulatory burden for investment fund issuers.

The request is part of phase 2, stage 1 of the CSA’s reform on this topic and the PMAC has outlined its recommendations on behalf of its 275 member firms, which manage a combined total of $2.7 trillion.

Katie Walmsley, PMAC president, said: “We are pleased the CSA is reviewing the disclosure regime to determine what information is most useful to investors. Research has demonstrated how difficult it can be for retail investors to interpret and understand the information they are given.

“PMAC is also pleased that duplicative information requirements are being eliminated as these add cost and complexity, without corresponding value for investors and the market.”

The key recommendations from PMAC are as follows:

  1. In codifying existing exemptive relief, do not create new requirements for pooled funds. While the Consultation proposes to give pooled funds the benefit of exemptions from National Instrument 81-102 Investment Funds (NI 81-102) and National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107), many of the conditions and obligations in the proposed amendment are not applicable to pooled funds. The amendment could create new requirements rather than codifying existing exemptive relief, adding cost and burden to pooled funds (see response to Question 19);
  2. Streamline disclosure requirements by reducing the frequency of simplified prospectus renewals from an annual renewal to a 24-month period and eliminating the Management Report of Fund Performance (MRFP) requirement (see responses to Questions 1 and 3);
  3. Permit IFMs to post documents and provide access to the designated website to meet an investment fund’s disclosure delivery requirements, in most cases (see response to Question 14);
  4. Do not introduce new requirements such as: (i) the creation of an amended and restated prospectus; and (ii) the necessity to obtain regulatory approval of a draft Information Circular (see responses to Questions 7 and 24); and,
  5. Make corresponding burden reduction changes to the regulatory regime applicable to Exchange-Traded Funds (ETFs), including the relevant forms, to reflect the proposals regarding mutual funds. In particular, as noted below, we question the different disclosure regime for ETFs compared to mutual funds, and whether this conforms to investor needs and expectations (see responses to Questions 3, 4 and 26).


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