CSA proposes investment fund rule changes

The Canadian Securities Administrators (CSA) today published for comment proposed amendments to National Instrument 81-102 Mutual Funds (NI 81-102), proposed changes to Companion Policy 81-102CP, and related consequential amendments, as part of the CSA’s Modernization of Investment Fund Product Regulation Project.

The proposed changes and amendments aim to enhance investor protection and market efficiency by providing a consistent regulatory framework in key areas, regardless of whether an investment fund is structured as a mutual fund or a non-redeemable investment fund.

Key investor protections include introducing rules for non-redeemable investment funds relating to conflicts of interest, and securityholder and regulatory approval of fundamental changes to the fund or its management.

The publication:

• introduces core operational requirements for publicly offered non-redeemable investment funds, other than scholarship plans;
• proposes enhancements to the disclosure requirements relating to securities lending, repurchases and reverse repurchases by investment funds; and,
• seeks feedback on a more comprehensive alternative fund framework that could provide flexibility for investment funds to use alternative investment strategies, while requiring more effective differentiation among the various types of publicly offered investment fund products.

The notice is available here. The comment period is open until June 25, 2013.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.