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November 2024 Advocacy Newsletter
Summary:
Earlier this fall, the Canadian Securities Administrators (CSA) proposed an overhaul of the continuous disclosure regime for investment funds. The overhaul will mean lower regulatory burdens for fund managers, as less disclosure will also mean less time and money spent drafting disclosures. But the CSA has also structured this initiative in such a way that it promises to benefit investors as well.
The CSA hired a behavioural insights consultant to design and test prototype disclosures that investors can understand and act on. They also made the results of this testing public, allowing all stakeholders to evaluate how this evidence factored into the CSA’s proposals. This commitment to transparency and evidence-based decision-making is something to be applauded.
There will be arguments that the CSA went too far in trying to simplify—that more context is needed for investors to have a full, accurate picture of how their investment funds are doing. In preparing our comment letter, the CAC may find instances where this kind of context is indeed necessary.
But in doing so, we should be aware of the potential cumulative effects of these efforts—refinements that make sense in isolation may, when taken together, end up serving only to overwhelm the reader. We’ll need to be selective in deciding what kinds of refinements to push for.
Luckily, we have until the new year to provide our comments, which gives us all a chance to enjoy a restful holiday season. Happy Holidays!