CSA Proposes Amended Risk Disclosure For Mutual Funds And ETFs

On December 10, 2015, the Canadian Securities Administrators ("CSA") published proposed amendments¹ (the "Current Proposed Amendments") to risk disclosure requirements for mutual funds and exchange-traded mutual funds ("ETFs"). The Current Proposed Amendments will require mutual funds and ETFs to use a standard deviation measure of risk when disclosing investment risk levels in existing Fund Facts documents and in proposed ETF Facts documents, respectively. These amendments are expected to be proclaimed into force in late 2016 or early 2017.

Background

Currently, the Fund Facts document requires a mutual fund to provide its investment risk level based on a risk classification methodology of the fund manager's own choosing. While there is presently no disclosure document similar to a Funds Facts document required for ETFs, the CSA has proposed a document called "ETF Facts" that would serve the same purpose – see our previous bulletin on ETF Facts here.