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Disclosure of Management Fees
This article was originally published in the Investment Funds Practitioner in June 2017.
As noted in the December 9, 2011 edition of the Practitioner, some mutual funds have management fees that are payable directly by securityholders and may vary from securityholder to securityholder. The disclosure about these management fees provided in the fund's simplified prospectus and Fund Facts include the highest possible rate or range of those management fees, as contemplated by Instruction 5, Part A, Item 8.1 of Form 81-101F1, or how fees applicable to that series compare to those applicable to other series offered by the same fund.
For mutual funds that have management fees that are payable directly by securityholders but do not vary from securityholder to securityholder, the management fee should be disclosed in the simplified prospectus and Fund Facts as a specified amount and should not be disclosed as a "maximum" management fee or "up to" the highest possible rate or range of those management fees, as any increase in the management fee would be subject to securityholder approval under Part 5, NI 81-102. The management fee disclosed in the simplified prospectus and Fund Facts should be the specified amount that is payable by the securityholders before any management fee rebates or waivers.