Canadian Securities Regulators Seek Comments on Mutual Fund Risk Classification Methodology

MONTREAL, Dec. 12, 2013 /CNW Telbec/ - The Canadian Securities Administrators (CSA) published today for comment CSA Notice 81-324 and Request for Comments Proposed CSA Mutual Fund Risk Classification Methodology for Use in Fund Facts (CSA Notice 81-324), which sets out a proposed risk classification methodology (the Proposed Methodology) for use by mutual fund managers in the fund facts document (Fund Facts).

The Proposed Methodology has been developed in response to stakeholder feedback that the CSA has received throughout the implementation of the point of sale disclosure framework for mutual funds, notably that the lack of use by fund managers of a standardized risk classification methodology could result in inconsistent measurements of risk and make comparisons between mutual funds difficult.

Currently the Fund Facts requires the manager of a mutual fund to provide a risk rating on a scale of five categories ranging from Low to High. A mutual fund's risk classification methodology is chosen and applied at the fund manager's discretion in order to determine that rating.

"The Fund Facts is designed to ensure that key information about a mutual fund is provided to investors in a simple and comparable format," said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission.  "The consideration of a standard risk classification methodology is intended to enhance that objective, and promote consistency in how risk is measured by mutual fund managers."

The CSA welcomes feedback on the Proposed Methodology. In particular, the CSA is interested in whether the Proposed Methodology should be mandated or whether it should be adopted as a guidance for investment fund managers. CSA Notice 81-324 can be found on CSA members' websites. The comment period is open until March 12, 2014.

The CSA, the council of the securities regulators of Canada's provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.

For more information:  
Sylvain Théberge      Mark Dickey
Autorité des marchés financiers    Alberta Securities Commission
514-940-2176       403-297-4481
Richard Gilhooley      Carolyn Shaw-Rimmington
British Columbia Securities Commission   Ontario Securities Commission
604-899-6713       416-593-2361
Kevan Hannah       Wendy Connors-Beckett
Manitoba Securities Commission    Financial and Consumer Services Commission
204-945-1513       New Brunswick
Tanya Wiltshire      Janice Callbeck  
Nova Scotia Securities Commission    PEI Securities Office
902-424-8586       Office of the Attorney General
Doug Connolly       Rhonda Horte 
Financial Services Regulation Div.    Office of the Yukon Superintendent of
Newfoundland and Labrador    securities 
709-729-2594       867-667-5466
Louis Arki       Donn MacDougall
Nunavut Securities Office     Northwest Territories
867-975-6587       Securities Office
Daniela Machuca   
Financial and Consumer Affairs  
Authority of Saskatchewan   


SOURCE: Autorité des marchés financiers

For further information:

Sylvain Théberge
Autorité des marchés financiers

Richard Gilhooley
British Columbia Securities Commission

Kevan Hannah
Manitoba Securities Commission

Tanya Wiltshire
Nova Scotia Securities Commission

Doug Connolly  
Financial Services Regulation Div.
Newfoundland and Labrador

Louis Arki
Nunavut Securities Office

Daniela Machuca 
Financial and Consumer Affairs
Authority of Saskatchewan 

Mark Dickey
Alberta Securities Commission

Carolyn Shaw-Rimmington
Ontario Securities Commission

Wendy Connors-Beckett
Financial and Consumer Services Commission
New Brunswick

Janice Callbeck
PEI Securities Office
Office of the Attorney General

Rhonda Horte 
Office of the Yukon Superintendent of securities 

Donn MacDougall
Northwest Territories
Securities Office


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