The Canadian Security Administrators (CSA) have introduced for a ninety-day comment period ending December 11, 2019, eight initiatives (collectively, The Proposed Amendments) that seek to reduce the regulatory burden on investment funds by eliminating duplicate requirements, streamlining regulatory processes, codifying frequently-granted exemptions from certain rules for investment funds, and eliminating the need for certain regulatory approvals.
The Proposed Amendments are part of the CSA’s two-phase plan to reduce the regulatory burden for investment funds, which began in 2016. In Phase One, CSA Staff conducted a comprehensive review of the existing investment fund disclosure regulatory landscape, as well as examining disclosure reporting for non-investment funds, and best practices from other jurisdictions. CSA Staff also undertook meetings with key stakeholders.
This work resulted in the Proposed Amendments which are being introduced for comment in Phase 2. In summary, the Proposed Amendments break down into eight individual work streams:
• Consolidating the Simplified Prospectus and the Annual Information Form;
• Investment Funds Designated Websites;
• Codifying Exemptive Relief Granted in Respect of Notice-and-Access Applications;
• Minimizing Filings of Personal Information Forms;
• Codifying Exemptive Relief Granted in Respect of Conflicts Applications;
• Broadening Pre-Approval Criteria for Investment Fund Mergers;
• Repealing Regulatory Approval Requirements for Change of Manager, Change of Control of a Manager, and Change of Custodian that Occurs in Connection with a Change of Manager; and,
• Codifying Exemptive Relief Granted in Respect of Fund Facts Delivery Applications.
The Proposed Amendments impact a wide range of national instruments and allied companion policies: National Instrument 14-101 Definitions (NI 14-101); National Instrument 41-101 General Prospectus Requirements (NI 41-101); National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101); National Instrument 81-102 Investment Funds (NI 81-102); National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106); National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107); National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR); Multilateral Instrument 13-102 System Fees for SEDAR and NRD; National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions; Companion Policy 41-101CP to National Instrument 41-101General Prospectus Requirements; Companion Policy 81-101CP to National Instrument 81-101 Mutual Fund Prospectus Disclosure Companion Policy 81-102CP to National Instrument 81-102 Investment Funds Companion Policy 81-106CP to National Instrument 81-106 Investment Fund Continuous Disclosure (81-106CP); and, Commentary in National Instrument 81-107 Independent Review Committee for Investment Funds.
CSA Notice and Request for Comment, Reducing Regulatory Burden for Investment Fund Issuers – Phase 2, Stage 1 is 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.