News Releases

Canada’s Securities Regulators Develop Governance Regime for Investment Funds

Jul 28, 2006

The Canadian Securities Administrators (CSA) today announced a rule aimed to improve governance of all publicly offered investment funds. National Instrument 81-107-Independent Review Committee for Investment Funds (the Rule) requires investment fund managers to have independent oversight of their management and monitoring of conflicts of interest.

The Rule requires all investment funds that are reporting issuers to establish an Independent Review Committee (IRC) to oversee all decisions involving conflicts of interest faced by a fund manager. The role of the IRC, depending on the nature of the conflict, will be to either approve the fund manager’s decision or provide recommendations before the manager may proceed. The fund manager will also be required to establish and follow written policies and procedures before referring issues to the IRC.

This rule will ensure the interests of the fund, and ultimately the investor, are at the forefront when a fund manager is faced with a conflict of interest,” said Jean St-Gelais, Chair of the CSA and President & Chief Executive Officer of the Autorité des marchés financiers (Québec). “Also, managers of investment funds will benefit from having the perspective of an independent body when they encounter actual or perceived conflicts of interest.”

The CSA Notice, Rule and related amendments are available on several CSA members' websites. The Rule and amendments could be in force as early as November 1, 2006.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Laurie Gillett
Ontario Securities Commission

Andrew Poon
British Columbia Securities Commission

Tamera Van Brunt
Alberta Securities Commission

Ainsley Cunningham
Manitoba Securities Commission

Frédéric Alberro
Autorité des marchés financiers