The Canadian Securities Administrators have announced final amendments to the continuous disclosure regime for investment funds that will reduce investment fund managers’ regulatory burden.
Fund managers will be exempted from certain conflict of interest reporting requirements in securities legislation if they have already met similar requirements. Moreover, certain class- or series-level disclosures not mandated under International Financial Reporting Standards will be removed from investment fund financial statements.
The simplified prospectus form has also been modified. The final rules will come into force on April 22.
“These changes reflect our commitment to making regulation more efficient and responsive. We are reducing unnecessary burden on fund managers while preserving the integrity of investor disclosure,” said Stan Magidson, CSA chair and the Alberta Securities Commission’s chair and CEO, in a statement.
The CSA first released the original consultation related to these rules on September 19, 2024. It included a proposal to replace the annual and interim Management Report of Fund Performance with an annual and interim Fund Report. The new report is a streamlined document that is simpler to prepare and is more easily understood by investors than the MRFP.
The CSA will develop and trial a modified Fund Report to be released in the future for feedback.
Last month, it proposed amendments to National Instrument 81-102 Investment Funds and the accompanying policy related to liquidity risk management for all investment funds. These changes focused on funds’ LRM frameworks, operational LRM matters, and LRM framework supervision.
In November, the CSA invited feedback on proposed changes to National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (NI 52-112) and other materials. It also pitched a semi-annual financial reporting pilot for qualified venture issuers’ voluntary implementation in October.
The CSA is the council of securities regulators across Canada’s provinces and territories. It coordinates and harmonizes Canadian capital market regulation.