Canada: OSC Publishes FAQ On Fund Fact Amendments And Delivery Requirements

Last Updated: September 9 2013
Article by Munier M. Saloojee

On June 13, 2013, the Canadian Securities Administrators (CSA) published final amendments (Amendments) implementing Stage 2 of the Point of Sale disclosure initiative.  The Amendments address changes to the "Fund Facts" form required for retail Canadian mutual funds and delivery requirements in respect thereof.  As the Amendments are being phased-in through the course of 2014, on September 5, 2013, in order to assist issuers in complying with the new requirements, the Ontario Securities Commission (OSC) published OSC Staff Notice 81-721 Frequently Asked Questions on the Implementation of Stage 2 of Point of Sale Disclosure for Mutual Funds – Delivery of Fund Facts (Staff Notice).  As its name implies, the Staff Notice sets out a list of frequently asked questions (FAQs) relating to the Amendments and OSC Staff's responses thereto.

Implementation Dates

As noted above, the Amendments will be implemented in stages.  The key dates are as follows:

  • January 13, 2014 – amendments to Form 81-101F3 take effect.
  • May 13, 2014 – filing deadline to file Fund Facts in the amended form.
  • June 13, 2014 - delivery requirement for Fund Facts takes effect.

The Staff Notice addressed questions relating to compliance with these implementation dates.  The responses provided by OSC Staff are briefly summarized below.

OSC Staff Responses to FAQs

OSC Staff confirmed that:

  • If an issuer wishes to file Fund Facts in the amended form prior to January 13,  2014, exemptive relief is required.
  • As of January 13, 2014, a mutual fund that files a preliminary or pro forma simplified prospectus and annual information form must also file Fund Facts in the amended form on SEDAR under the filing category "Preliminary fund facts" or "Pro forma fund facts".
  • If a mutual fund has not already done so, it must file Fund Facts in the amended form by May 13, 2014. In this case, the Fund Facts in the amended form should be filed under the SEDAR filing category "Stage 2 Fund Facts".  No certificate page or blacklined version of the Fund Facts is required to be filed in this circumstance.
  • If a preliminary or pro forma filing is made between January 13, 2014 and May 13, 2014:
    • if the final receipt is issued before May 13, 2014, Fund Facts in the amended form should be filed at the time of the final filing and no subsequent filing under the "Stage 2 Fund Facts" SEDAR filing category is required
    • if the final receipt is issued after May 13, 2014, (a) Funds Facts in the amended form must be filed by May 13, 2014 under the "Stage 2 Fund Facts" SEDAR filing category, and (b) Fund Facts in the amended form must again be filed after May 13, 2014 when the corresponding final prospectus and annual information form is filed – apart from the date, in all likelihood the Fund Facts filed with the final prospectus and annual information will be identical to that filed under the "Stage 2 Fund Facts" SEDAR filing category prior to May 13, 2014.
  • If a preliminary or pro forma filing is made after May 13, 2014, the mutual fund will likely have previously filed Fund Facts in the amended form under the "Stage 2 Fund Facts" SEDAR filing category prior to May 13, 2014.  When the preliminary or pro form filing is subsequently made, a blacklined version of the Fund Facts should also be filed which shows changes from the last version previously filed – this will therefore likely be the version filed prior to May 13, 2014 under the "Stage 2 Fund Facts" SEDAR filing category.
  • If an issuer wishes to use a Fund Facts to satisfy the prospectus delivery requirements under securities legislation before June 13, 2014, exemptive relief is required.
  • Filers who were previously granted exemptive relief from the prospectus delivery requirements for pre-authorized purchase plans should review the sunset clause in their exemptive relief order to determine when such previously granted relief terminates.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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