As part of ongoing consultations, securities and insurance regulators reaffirm their commitment to introduce total cost reporting for both mutual funds and segregated funds.
Following its annual meeting on June 15, the Joint Forum of Financial Regulators, which includes securities, insurance and pensions regulators, said it remains committed to improving and harmonizing cost disclosure for investment funds and segment funds
In April, regulators released proposals for total cost reporting (TCR), which would increase the amount of information investors disclose about the costs of investing in funds, including management and trading costs and distribution costs.
These proposals will be subject to consultation until July 27.
Regulators say they have received views from industry trade groups and consumer advocates on “issues of scope and implementation, the level of information for investors and policyholders and the proposed transition period.”
In the face of this information, regulators have reiterated their belief in the need for increased disclosure.
“The Total Cost Reporting project is critical to completing the work introduced in 2013 under the (Customer Relationship Model) by ensuring that investors are informed of all costs, including ongoing embedded costs such as management fees and transaction expenses, associated with ownership of investment funds,” said Louis Morisset, president of the Canadian Securities Administrators and president and CEO of the Autorité des marchés financiers, in a statement.
“We continue to encourage registrants and insurers to plan ahead to implement the necessary changes as quickly as possible once the TCR requirements are finalized,” he added.
Insurance industry regulators echoed this message.
“Regulators are committed to bringing TCR to market and will work closely with both the insurance and securities industries to achieve this in the most expedient manner possible,” said Robert Bradley, chair of the Canadian Council of Insurance Regulators (CCIR) and Superintendent of Insurance for Prince Edward Island.
“Policyholders and investors deserve to understand all the costs associated with owning investment products and segregated funds and to be able to more easily compare their performance,” he added. “Insurance regulators understand that the insurance industry supports this initiative and have been aware of this since the publication of our 2017 CCIR position paper on segregated funds.”
