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Letter Summary:
The discussion paper proposes to expand the cost disclosures provided to investors to include the total cost of owning and investing in investment funds even if those costs are not paid directly to a dealer. Examples of costs that would be included under the notice are management fees, short term trading fees, custodial fees and redemption fees.
Overview of the Council’s Comments:
The council is supportive of the underlying goal behind expanding cost reporting because it supports cost transparency and enabling investors to make informed investment decisions. This disclosure will promote accountability, competition and a more efficient marketplace through better decision making. To promote fairness, consistency and avoid regulatory arbitrage amongst dealing firms, the council believes regulators should consider expanding cost reporting for other investment products. In addition, the council recommends allowing registered firms sufficient time to absorb the impact of these changes. A realistic timeframe for implementing expanded cost reporting should mirror the duration of CRM2 implementation.