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The Voice of Canada’s Investment Funds Industry

Point of Sale

The Canadian Securities Administrators’ POS Project grew out of an increasing awareness by industry and regulators that investors found prospectus documents intimidating in length and difficult to understand. In 2010, after several years of consultation and research, the CSA published a framework for introducing a new, concise, plain language document – Fund Facts.

Fund Facts is designed to give investors key information about a mutual fund, in language they can easily understand and at a time that is relevant to their investment decision. The CSA mandates the contents and format of the Fund Facts document so that investors can easily compare information across a range of funds. The industry welcomes the new Fund Facts document as a vital step forward in helping to develop better informed and more financially literate investors.

The new framework is being implemented in three stages:

  • Effective January 1, 2011, mutual funds companies were 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, mutual funds companies will be required to deliver the Fund Facts within two days of an investor’s purchase of a conventional mutual fund.
  • The prospectus for a mutual fund will continue to be available to investors upon request.


Documents

2016
MFDA and IFIC Help Inform Investors about Upcoming Changes when Purchasing Mutual Funds

2010
Submission to FSCO - Statement of Priorities (May 17, 2010)

Submission to CSA (POS Working Group) - CESR Risk Disclosure Methodology (February 26, 2010)



Stage 1 - Fund Facts

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.

2013
Submission to Joint Forum - Consultative Document on Point of Sale disclosure in the insurance, banking and securities sectors


Stage 2 - Delivery

Stage 2 of the POS Project was completed on June 13, 2013 with the publication of final amendments to the Fund Facts form.

This stage included the implementation of a process to deliver the Fund Facts, satisfying securities requirements to provide an investor with a prospectus within two days of buying a mutual fund.

The amendments are being phased in over 12 months.

2012
Submission to CSA on Stage 2 Point of Sale Dislcosure for Mutual Funds (August 31 2012)


Stage 3 - Timing

Under stage 3 of the POS Project, the Fund Facts would be provided to the investor at the point of sale for mutual funds. Significant issues for the industry include the potential requirement for pre-delivery of Fund Facts and acceptable delivery methods. IFIC and the industry will be working to secure the flexibility necessary for investors to make timely and informed decisions. In Stage 3, the CSA will also consider the applicability of a summary disclosure document and point of sale delivery for other types of publicly-offered investment funds, including ETFs. IFIC has consistently argued that disclosure rules should be applied as broadly as possible.

2016
Pre-Sale Delivery of Fund Facts – Plain Language Description for Investors

This document is a Word version of the plain language content developed by the MFDA and IFIC for a statement insert (see below) to inform investors about the requirement (as of May 30, 2016) for dealers to deliver Fund Facts to clients before the purchase of a mutual fund. Firms are welcome to use this content in their communications with investors.


Pre-Sale Delivery of Fund Facts

IFIC and the Mutual Funds Dealers Association (MFDA) have collaborated to produce a statement insert to help the mutual funds industry inform investors about the upcoming requirement for dealers to deliver Fund Facts to clients before they purchase a mutual fund.


Statement Insert Notifying Investors about Pre-Sale Delivery of Fund Facts

IFIC encourages dealers to include the insert with their clients’ quarterly statements or to provide it to investors in some other way. Managers can participate by sending it with trade confirmations and posting it online. A version with crop-marks is available for dealers, managers or their suppliers to download and print. For more information, refer to the document Pre-Sale Delivery of Fund Facts.


Statement Insert Notifying Investors about Pre-Sale Delivery of Fund Facts – For External Printing

IFIC encourages dealers to include the insert with their clients’ quarterly statements or to provide it to investors in some other way. Managers can participate by sending it with trade confirmations and posting it online. IFIC would be interested in knowing which firms decide to pursue this initiative and the quantities that are distributed. For more information, refer to the document Pre-Sale Delivery of Fund Facts.


2014
IFIC Submission to the CSA on the Implementation of Stage 3 Point of Sale Disclosure for Mutual Funds (May 26, 2014)