Prospectus, continuous disclosure and sales communication reviews of ESG-related funds
On January 19, 2021, the Canadian Securities Administrators (CSA) published CSA Staff Notice 81-334 ESG-Related Investment Fund Disclosure (the Notice), which contains guidance for investment funds on their disclosure practices as they relate to environmental, social and governance (ESG) considerations, particularly funds whose investment objectives reference ESG factors and other funds that use ESG strategies (ESG-Related Funds).
The purpose of the guidance is to enhance the ESG-related aspects of the funds’ regulatory disclosure documents and to ensure that the sales communications of such funds are not untrue or misleading and are consistent with the funds’ regulatory offering documents.
During the prospectus review process and as part of our ongoing continuous disclosure reviews, we will be reviewing the regulatory documents of ESG-Related Funds in accordance with the guidance provided in the Notice to assist investment fund managers in improving the disclosure of such funds.
For prospectuses, this may include, but not be limited to, the fund’s:
- investment objectives and name
- fund type
- investment strategies
- proxy voting policies and procedures
- risk disclosure
- suitability disclosure
For continuous disclosure reviews, staff will primarily focus on the summary of the results of operations in the annual and interim management reports of fund performance.
As part of the reviews, staff may also ask investment fund managers to provide copies of all sales communications relating to the ESG-Related Fund(s) in question that were disseminated recently.
If there are any questions about this process, please contact:
- Ritu Kalra, Senior Accountant, Investment Funds and Structured Products Branch at [email protected];
- Bryana Lee, Legal Counsel, Investment Funds and Structured Products Branch at [email protected];
- Sovener Yu, Senior Accountant, Investment Funds and Structured Products Branch at [email protected]; or
- Sean Costen, Legal Counsel, Investment Funds and Structured Products Branch at [email protected].