A new disclosure document Canadian financial regulators require for mutual and segregated funds fails to take advantage of new technologies such as smartphones and tablets, says a report by the Fraser Institute.
The report, Financial Regulatory Disclosure: Embracing New Communications Channels, says that the new disclosure document, “Fund Facts,” is overly prescriptive and designed to be viewed as a paper-based document rather than on mobile devices. Financial regulators introduced Fund Facts to provide basic information after they realized Canadians have trouble finding and understanding the information buried in complex documents like mutual fund prospectuses.
Fund Facts is designed for letter-size paper and the Canadian Securities Administrators (CSA) has mandated detailed instructions for how the document is to be presented to Canadians purchasing mutual or segregated funds. Unfortunately, the layout and PDF digital format are not easily viewed on smartphones and tablets.
“The vision behind Fund Facts originated several years ago but in the meantime, communications technology and the methods used by Canadians to get information have changed,” says Neil Mohindra, director of financial policy studies with the Fraser Institute and author of the report.
The CSA is proposing that Fund Facts documents be delivered to consumers before or when they are being sold an investment product and that the documents must be in paper format or an identical digital version that only displays properly on a desktop computer.