Securities and insurance regulators are forming an industry committee to address challenges in implementing total cost reporting.
The Canadian Securities Administrators, the Canadian Board of Insurance Regulators and the Canadian Investment Regulatory Organization are forming a group that will include representatives from industry, trade groups and other players to help adopt new total cost reporting (TCR) requirements.
The rules are based on reforms of the customer relationship model (CRM2), which aim to provide investors of investment funds and segregated funds with greater transparency regarding the costs of investing. The new TCR requirements will expand client reporting to include management fees and transaction costs, while extending similar disclosure obligations to insurers’ segregated funds for the first time.
However, as with the CRM2 reforms, the new requirements are expected to create implementation challenges. Industry firms will need to build systems and processes to ensure they can collect, process and deliver the required information to investors in a timely manner.
To this end, when regulators finalized the new requirements in April, they indicated that the committee would help address the technical challenges.
“The Committee will support industry stakeholders in implementing TCR improvements during the transition period that ends on December 31, 2025, by providing guidance and answering questions,” regulators said.
The rule changes will not require companies to start providing TCR-compliant reporting to investors until 2027, with annual reports for the year ending December 31, 2026 containing the first TCR disclosures.
“The committee will enable industry participants to consult with regulators on implementation issues and will also provide the opportunity to report to regulators on the industry’s progress in implementing TCR improvements,” the regulators said. Companies will be able to ask questions directly to regulators, as well as through industry trade groups.
In forming the committee, regulators said they would “reach out to industry participants, including industry associations and other stakeholders, to identify potential participants with appropriate technical expertise.”
