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. In 2016, an amendment to the POS Project resulted in ETF Facts, a similar plain language document for ETFs.
Fund Facts and ETF Facts are designed to give investors key information about a mutual fund or ETF, 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 documents so that investors can easily compare information across a range of funds. The industry welcomes the Fund Facts and ETF Facts documents as a vital step forward in helping to develop better informed and more financially literate investors.
Dealers are required to deliver Fund Facts prior to an investor’s purchase of a mutual fund.
Effective September 1, 2017, ETF companies are required to begin producing ETF Facts. Beginning on December 10, 2018, dealers that receive an order to purchase ETFs will be required to deliver ETF Facts to investors within two days of purchase.
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.
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.
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.