As a general comment, the CAC is supportive of the efforts of the Nova Scotia Securities Commission to facilitate reinvestment into the local economy by retail investors who want to invest in businesses within their own communities. However, it is important that the interests of local businesses in accessing capital more quickly and easily do not overshadow the importance of investor protection and transparency in the capital markets. We have a number of investor protection concerns with respect to an exemption available solely to Community Economic Development Investment Funds (“CEDIFs”) from the investment fund manager requirement, as outlined below.
Overview of the Council’s Comments:
The CAC is supportive of the CSA’s initiative in standardizing risk methodology and agrees that if every mutual fund manager was required to use the same calculation, it would be useful to investors and provide more consistency, as well as assist in comparing the risks across different mutual funds. As a result, as a primary comment, we are of the view that the CSA should mandate the proposed methodology and not adopt it only as guidance.