OSC takes action to reduce burden for investment fund managers

TORONTO - The Ontario Securities Commission announced today that it will no longer require investment fund managers of pooled funds to apply for approval to act as trustees. As registrants, investment fund managers are capable of acting as trustees and are already subject to a securities regulatory framework for safeguarding the assets of pooled funds.  

“This dated requirement no longer makes sense, given how the regulatory regime for investment funds has evolved,” said Raymond Chan, OSC Director of Investment Funds and Structured Products. “We are pleased to eliminate this  approval process, which will spare investment fund managers from having to complete and file time-consuming and duplicative paperwork to the OSC.” 

This initiative was first identified by the OSC’s Burden Reduction Task Force, which has a mandate to consider and act on suggestions to eliminate unnecessary rules and processes, while protecting investors and the integrity of Ontario’s capital markets.

Prior to this change, an investment fund manager of a pooled fund seeking to act as a trustee had to pay a fee, file an application, have it reviewed by OSC staff and receive approval of the application.  This requirement dates back to 1997, when fund managers were not subject to other forms of regulatory oversight by the OSC, including the requirement to register.

OSC staff have received 134 applications since January 1, 2009 for which investment fund managers had to pay an application fee (currently $1500 per application). These applications have been routinely approved.

Revised Approval 81-901 Mutual Fund Trusts: Approval of Trustees Under Clause 213(3)(b) of the Loan and Trust Corporations Act  which sets out this change, can be found on the OSC’s website. The change will come into effect immediately.

The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in the capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk.  Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at www.osc.ca.

 

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