En vertu des changements au Règlement 81-105, il sera interdit aux organismes de fonds de payer des commissions de vente initiales aux courtiers, ce qui permettra d'harmoniser le règlement de l'Ontario avec celui des autres territoires du Canada.
Une traduction de ce billet sera disponible prochainement.
Changes to NI 81-105 to prohibit fund organizations from paying upfront sales commissions to dealers will bring Ontario in line with other Canadian jurisdictions
On June 3, the Ontario Securities Commission announced that it was adopting amendments to National Instrument 81-105 Mutual Fund Sales Practices to prohibit fund organizations from paying upfront sales commissions to dealers. The prohibition on upfront payments will result in the end of sales charge options that involve such payments, such as all forms of the deferred sales charges option (the DSC option), in connection with mutual fund sales.
Under a DSC option, an investor does not pay a sales charge when fund securities are purchased. Instead, investors pay a redemption fee to the investment fund manager if they sell the securities before a prescribed period of time elapses from the date of purchase. Redemption fees decline based on the length of time the investor holds the securities. The ban addresses the regulatory concern over the negative impact of a “locked-in” redemption fee schedule that may discourage an investor from redeeming an investment.
As we've previously discussed, the Canadian Securities Administrators (CSA) proposed prohibiting the DSC option in 2018. While the OSC was initially part of the CSA process, the Ontario Government announced in September 2018 that it would not consent to banning the DSC option entirely. The OSC subsequently proposed restricting the DSC option in a number of ways in order to “ mitigate potential negative investor outcomes.”
Having considered stakeholder comments in response to previous notices and proposals, and the overwhelming support for a harmonized ban across Canada on the DSC option, the OSC has determined that a ban is the “best path forward.”
Assuming Ministerial approval, the amendments will come into force in Ontario on June 1, 2022. This is the same date that other Canadian jurisdictions are scheduled to implement a similar ban on the DSC option, and also the date on which CSA restrictions on mutual fund trailing commissions will take effect.
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.
