The Canadian Securities Administrators (CSA) have adopted a ban on deferred sales charges (the DSC Option) on mutual funds. Specifically, the ban will prohibit the payment by fund organizations of upfront sales commissions to dealers, which will result in the discontinuation of all forms of the deferred sales charge option including low-load options (collectively, the DSC option).

The ban is expected to become effective in all member jurisdictions, except Ontario, on June 1, 2022. The Ontario Securities Commission (OSC) will not adopt the proposal but will publish for comment an alternative proposal to address the investor protection and market efficiency issues arising from the payment of upfront sales commissions by fund organizations to dealers.

The ban on the DSC option comes with the adoption of Multilateral CSA Notice of Amendments to National Instrument 81-105 Mutual Fund Sales Practices, Changes to Companion Policy 81-105CP to National Instrument 81-105 Mutual Fund Sales Practices and Changes to Companion Policy 81-101CP to National Instrument 81-101 Mutual Fund Prospectus Disclosure relating to Prohibition of Deferred Sales Charges for Investment Funds (together, the Amendments).

The Amendments are available for download from the websites of the Participating Jurisdictions.

For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.