News Release

IFIC makes submission to CSA on continuous disclosure modernization project

Association supports project but recommends changes to benefit investors

January 31, 2025 (Toronto) – The Investment Funds Institute of Canada (IFIC) has made a submission to The Canadian Securities Administrators (CSA) in response to their proposal to modernize the continuous-disclosure regime for investment funds. The CSA’s aim is to improve the quality of disclosures provided to investors and reduce any unnecessary regulatory burden of certain investment fund continuous-disclosure requirements under securities legislation.

“We welcome the CSA’s efforts to reduce regulatory burden, and we support the proposal to modernize continuous-disclosure requirements to improve investors’ understanding of the information being reported,” said Andy Mitchell, President and CEO, IFIC. “However, we are concerned that some of the proposed disclosure requirements could make the information less clear or not practical for investors. Also, some proposals create unintended regulatory burden and increased liability risk or do not go far enough to streamline the presentation of the information and reduce duplication of content in financial statements.”

In accordance with our guiding principles, we recommend the following improvements to ensure that disclosure requirements are practical and beneficial for investors:

• Comparative fund expense ratio (FER): Provide two years’ worth of FER data for all series/classes without requiring a written summary, allowing all investors to easily compare changes in costs for the specific funds they hold.
• Performance information: Include performance data for all classes/series, not just those with the highest management fee, ensuring all investors can find their relevant performance metrics in one place.
• Investment objectives and investment strategies assessment: Revert to existing MRFP requirements regarding “results of operations” and “recent developments” instead of introducing new assessments of investment objectives and investment strategies, which could add regulatory burden and liability risk.
• ESG disclosure consistency: Refer to CSA Staff Notice 81-334 for ESG-related disclosure obligations rather than creating new requirements that are not aligned with existing guidance.
• Liquidity profile: Eliminate the proposed liquidity profile section as it does not provide information relevant to mutual fund and ETF investors.
• Statistics and portfolio holdings: Information proposed for the statistics section is supplemental to the performance section, therefore we propose integrating it into that section. Retain the existing requirements for discussions on material changes in portfolio assets under “Results of Operations Over the Last 12 Months.” This would eliminate two standalone sections in the report that would be less meaningful to investors if presented on their own.
• Risk profile and borrowing/leverage: Eliminate these two sections so they do not take up space on their own in the report. Instead, disclose material changes in the required information under a general section of the report.

We also recommend eliminating the use of leverage disclosure requirements from financial statements as an additional regulatory burden-reduction measure. It is unnecessary duplication of the borrowing and leverage disclosure required in the report.

These recommendations aim to enhance clarity, relevance, and usability of the continuous disclosure materials, ultimately supporting informed investor decision-making.

About IFIC

The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together approximately 150 organizations, including fund managers, dealers, professional and back-office service providers, to strengthen the integrity of the investment funds industry, foster public confidence in investment funds, and enable investors to achieve good outcomes. By connecting savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.

For more information

Christine Harminc
Senior Manager, Communications and Public Affairs
charminc@ific.ca
416-309-2313