New disclosure for seg funds to be aligned with mutual funds’ rules?
The proposals would bring seg fund disclosure more closely in line with the information clients receive about mutual funds, but with some key differences
The CCIR will also look at issues such as risk classification methodology, oversight of sales, needs-based selling practices, updating of client records and know-your-product due diligence requirements
The association’s response to the CCIR’s strategic plan recommends that regulators implement a mandatory rule for advisors to conduct a needs analysis for all clients
The CCIR plans to continue developing a Canadian market conduct regime that reflects the standards the International Association of Insurance Supervisors have set out
Carriers had to provide a wide range of information on the business they conducted during the previous calendar year by May 1
But the two groups have differing views on how the rules for seg funds and mutual funds should be harmonized
One goal is to reduce the potential for regulatory arbitrage
Insurance regulators have issued a paper that suggests existing and potential gaps in disclosure between mutual funds and segregated funds may need to be addressed
The CCIR plans to publish a consultation paper this spring to discuss potential methods of closing the gap between mutual fund and seg fund disclosure requirements