Point of Sale Disclosure for Mutual Funds (POS Project)

 

The Fund Facts is a document that is designed to give investors key information about a mutual fund, in language they can easily understand, at a time that is relevant to their investment decision.

Effective January 1, 2011, fund managers are required to prepare and file a Fund Facts for each class or series of each of their mutual funds and to post the Fund Facts to their website.

Effective June 13, 2014, dealers are required to deliver the Fund Facts within two days of buying a conventional mutual fund. The prospectus for a mutual fund will continue to be available to investors upon request.

Effective May 30, 2016, dealers are required to deliver the Fund Facts to a purchaser before accepting an instruction for the purchase of a mutual fund. The prospectus for a mutual fund will continue to be available to investors upon request.

Background

The POS Project is a continuation of the shared vision of securities and insurance regulators to provide investors with more meaningful and effective prospectus disclosure of mutual funds and segregated funds, as described in Framework 81-406 Point of Sale Disclosure for mutual funds and segregated funds (the Framework) published by the Joint Forum of Financial Market Regulators on October 24, 2008.

The CSA published proposed rule amendments aimed at implementing all of the elements of the point of sale disclosure regime set out in the Framework on June 19, 2009 (the 2009 Proposal).

After considering all of the comments received on the 2009 Proposal, the CSA concluded to proceed with a staged implementation of the Framework, as set out in CSA Staff Notice 81-319 Status Report on the Implementation of Point of Sale Disclosure for Mutual Funds published on June 16, 2010

Stage 1 of the POS Project was completed on October 6, 2010 when the CSA published amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure to require the preparation, filing and posting of the Fund Facts.

Stage 2 of the POS Project was completed on June 13, 2013, when the CSA published the final amendments which (i) include amendments to the Fund Facts form requirements and (ii) require delivery of the Fund Facts instead of the prospectus to satisfy the prospectus delivery requirements under securities legislation to deliver a prospectus within two days of buying a mutual fund. The amendments are phased-in over a 12 month period.

The CSA committed to testing the Fund Facts with investors before finalizing the Stage 2 amendments. The results of the testing helped to inform the changes we made to the Fund Facts. The final report, “CSA Point of Sale Disclosure Project: Fund Facts Document Testing,” is available here.

Stage 3 of the POS Project is now complete. On December 11, 2014, the CSA published final amendments to implement pre-sale delivery of the Fund Facts. The requirement for pre-sale delivery of the Fund Facts takes effect on May 30, 2016.