OSC releases overview of issues impacting investment funds

January 25, 2013

The Ontario Securities Commission yesterday released a report that provides an overview of the key initiatives undertaken by the regulator during 2012 that impact investment fund issuers. Such projects concern: (i) modernizing investment fund product regulation, (ii) point of sale, (iii) scholarship plans and (iv) mutual fund fees.

Emerging issues and trends are also considered, including prepaid forward structures in prospectus offerings, investment funds with exposure to physical commodities and the increase in linked note offerings.

The report also considered OSC Staff's findings and concerns resulting from a targeted review of the continuous disclosure filings of Ontario-based investment funds. Identified issues included concerns with advertising and marketing materials (observations and guidance on this subject are expected this Spring), as well as with respect to risk ratings in fund facts (which in some cases resulted in mutual fund managers changing the risk rating of the fund). For more information, see OSC Staff Notice 81-718.

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