Investment Management: Fair Dealing: 

Fees and Costs

  

Variable Fees and Costs

Position: When fees and other costs are not known prior to a transaction, investment advisers have a duty to describe how fees and costs are calculated.

Rationale: Such disclosures will enable investors to determine whether the method for calculating trading costs is reasonable and likely to be worth the expected benefits.

Where stated: CAC Letter - OSC Fair Dealing 2004 (PDF)

 

Fixed Fees and Costs

Position: When fees and other costs about services and trades are fixed and known, investment advisers should provide this information to investors prior to a transaction.

Rationale: Such disclosures will enable investors to determine whether the trading costs are worth the expected benefits prior to taking action.

Where stated: CAC Letter - OSC Fair Dealing 2004 (PDF)

 

Distribution Costs

Position: Collective investment funds should have to deduct distribution-related costs directly from shareowner accounts as a separate line item, rather than from fund assets.

Rationale: The additional transparency allows shareowners to assess exactly how much the fund spends distributing its shares.

Where stated: USAC SEC Commissions for Fund Distribution

 

Inter-Fund Transfers

Position: Fund managers should permit shareowners of funds that are planning material changes to strategy or structure to move their assets to another fund in the manager’s family of funds prior to the changes and without back-end sales charges.

Rationale: An investor may have invested in the fund because of the factors that have changed. The changes may affect the risk and return structure of the fund, altering its appeal to certain shareowners.

Where stated: CAC on OSC Independent Review Cmte for MFs