Canadian financial regulators have released a series of changes to total cost reporting (TCR) disclosures for investment funds and individual segregated fund contracts, with the goal of improving cost and fee transparency for fund holders.
The enhancements will come into effect 1 January 2026, pending ministerial approval.
Clients will now be provided with annual reports outlining the ongoing costs of owning mutual funds, exchange-traded funds, scholarship plans and segregated funds. The percentage for each fund and the aggregate amount for all investment or segregated funds over the year will be included, keeping fund holders updated as to ongoing embedded costs.
The first of these enhanced annual reports is scheduled to be delivered for the year ending 31 December 2026.
The changes were developed by the Canadian Securities Administrators (CSA), the Canadian Council of Insurance Regulators (CCIR), the Canadian Insurance Services Regulatory Organizations and the New Self-Regulatory Organization of Canada. Investor advocates and market participants were consulted on the changes.
Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission, says: “Investors need to be aware of and understand the costs they pay to assess the value they receive and to make informed decisions. These changes will bolster investors’ and policy-holders’ awareness of the ongoing embedded costs of owning investment funds and individual segregated fund contracts, including management fees and trading expenses.
“This additional transparency will help investors ask their dealing representatives and life insurance agents the right questions and make better-informed decisions, which should ultimately result in better investing outcomes.”
Robert Bradley, chair of the CCIR, comments: “We’ve worked collaboratively with other financial services regulators and industry to bring forward today the TCR requirements for individual segregated fund contracts and investment funds. Insurance regulators continue to expect the insurance industry to bring to market the TCR insurance guidance in a time frame which is consistent with the investment sector.”
