The Canadian Securities Administrators (“CSA”) have published final amendments and changes to modernize the continuous disclosure regime for investment funds (collectively, the “Final Amendments”). The Final Amendments provide exemptions from certain conflict of interest reporting requirements where other similar requirements are satisfied, eliminate certain required class- or series-level disclosure from investment fund financial statements and incorporate revisions to Form 81-101F1 Contents of Simplified Prospectus (“Form 81-101F1”). Subject to ministerial approval, the Final Amendments come into force on April 22, 2026, with a transition period until January 1, 2027, for certain amendments.
Background
As we discussed in a previous post, in September 2024, the CSA proposed amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Investment Funds, National Instrument 81-106 Investment Fund Continuous Disclosure (“NI 81-106”) and National Instrument 81-107 Independent Review Committee for Investment Funds (“NI 81-107”), along with related consequential amendments and changes to other instruments and policies (collectively, the “Proposed Amendments”). The Proposed Amendments were intended to enhance the utility of disclosure for investors while reducing regulatory burden for investment fund managers. They were divided into three workstreams, with the objectives of:
- Workstream One: replacing the annual and interim Management Report of Fund Performance (MRFP) with a new annual and interim Fund Report;
- Workstream Two: providing exemptions from certain conflict of interest reporting requirements where other similar requirements are satisfied; and
- Workstream Three: eliminating certain required class- or series-level disclosure from investment fund financial statements.
The CSA also proposed minor amendments to: (i) implement the fund expense ratio (FER), which combines the management expense ratio and the trading expense ratio of an investment fund, in Fund Facts and ETF Facts documents (the “Additional FER Initiative”); and (ii) make editorial revisions to Form 81-101F1 (the “Additional SP Disclosure Initiative”).
Final Amendments
The Final Amendments relate exclusively to Workstream Two, Workstream Three and the Additional SP Disclosure Initiative. The CSA continue to advance Workstream One and the Additional FER Initiative and expect to release a separate publication specific to these initiatives at a later date.
The CSA received 26 comment letters on the Proposed Amendments. After considering the feedback received, the CSA made certain non-material changes to the Proposed Amendments for Workstream Two to refine the Manager’s Report on Related Party Transactions and new Form 81-107A Conflict Reporting Form for Related Issuer Purchases, respectively. No changes were made to the Proposed Amendments for Workstream Three or for the Additional SP Disclosure Initiative.
Transition period
The Final Amendments are expected to come into force on April 22, 2026, and provide a transition period for the following amendments:
- Workstream Two: an investment fund will not be required to comply with Parts 2, 4 and 6 of NI 81-107 until January 1, 2027, if it complies with those parts as of April 21, 2026; and
- Workstream Three: an investment fund will not be required to comply with the amendments for Workstream Three until January 1, 2027, if it complies with sections 3.2 and 3.3 and subsection 3.6(1) of NI 81-106 as of April 21, 2026.
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