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Letter Summary:
The proposed amendments to various national instruments would provide an alternative for investment funds that are reporting issuers to delivering financial statements and management reports of fund performance to unitholders. The purpose of these changes is to modernize the method by which these documents are made available to investors and would replace delivery with a requirement to post the documents on a designated website, issue, file on SEDAR and post a news release announcing the availability of the documents, and a requirement to deliver the documents upon request or upon standing instructions. Reporting issuer funds would no longer have to send an annual reminder or annual notice to rely on standing instructions regarding the delivery of financial statements. Investors could still request or provide standing instructions to receive the documents in either paper or electronic format.
Overview of the Council’s Comments:
The Council is generally supportive of the proposed access-based model as an alternative to delivering financial statements and management reports of fund performance for investment fund reporting issuers. Nevertheless, we believe that investment fund investors should be alerted to the release and availability of designated documents either through periodic notices or through new functionality on SEDAR+.
Our key comments are summarized below:
- We agree that securityholders should continue to be permitted to provide standing instructions to receive paper copies.
- We also agree that the benefits to securityholders of being able to provide standing instructions to receive electronic copies are significant relative to the costs. Significant cost savings can be generated from this initiative.
In our view, retail investors are unlikely to monitor for news releases on the funds of interest or search the designated website frequently to be aware of the availability of new filings.
- We think that SEDAR+ should include enhancements to allow for subscriptions to alerts for new filings and should enable easy access to the documents.
- We believe that the news release should include a hyperlink to the documents on the designated website and a direct link to the available documents in SEDAR+. The designated website and the issuer’s main page on SEDAR+ should reference each other.
- For the designated website, we think best practices would include adhering to any applicable federal and provincial accessibility guidelines.
- We also believe the designated documents should be posted on the designated website for a reasonable amount of time for comparability purposes.