The Investment Funds Institute of Canada has told Canadian regulators that its members are ready to discuss a plan to extend disclosure requirements to encompass the full Management Expense Ratio (MER) of investment funds, announced IFIC April 25.
In a letter dated April 21, 2017, IFIC requested to meet with regulators. This letter was addressed to Louis Morisset, chair of the Canadian Securities Administrators (CSA), and to the heads of the Mutual Fund Dealers Association (MFDA) and Investment Industry Regulatory Organization of Canada (IIROC).
Widespread agreement among regulators
“There is widespread agreement among regulators, investor advocates and the industry that CRM2 is a significant step forward in investor disclosure,” says Paul C. Bourque, IFIC president and CEO. “One of the early successes of CRM2 is that client-advisor discussions are generating more questions about the full MER. Our members now are ready and willing to turn their attention to CRM3.”
As a response to a proposal made by the MFDA in 2015 to provide investors a personalized report of what the investor paid to the fund manager, IFIC supported expanded disclosure. Additionally, IFIC suggested that research into investor and advisor responses to CRM2 would help direct further disclosure.
Will take time to design and implement
Though the results of the CSA’s research on CRM2 won’t be known for some years, the industry suggests moving ahead with the development of CRM3. “CRM3 will take some time to design and implement and regulators can absorb and incorporate learnings from CRM2 as we work through new CRM3 rules together,” Bourque says.