The Canadian Securities Regulatory Commission (CSA) and the Insurance Regulatory Commission of Canada (CCIR) have issued rule changes aimed at strengthening Total Cost reporting (TCR) disclosures for investment Funds and individual Segregated fund contracts (also known as Segregated Funds). Improvements to the TCR rules will provide transparency on the total fees and costs of investment funds and segregated fund holders.

Stan Magidson, Chairman of the CSA and Chairman and CEO of the Alberta Securities Commission, said: "Investors need to understand their costs to assess their profitability and make informed decisions. These rule changes will increase investors' and policyholders' awareness of the ongoing implicit costs (including administration fees and transaction fees) of the investment funds and segregated funds they hold. This increased transparency will help investors ask accurate and effective questions of their trading representatives and insurance agents, leading to more informed decisions and better investment outcomes."

The rule change requires firms to provide annual reports to clients showing the ongoing costs of their holdings of mutual funds, exchange-traded funds, education fund plans and segregated funds. This information needs to be expressed as a percentage of each fund, and the total amount (in US dollars) of all investment funds or segregated funds held by the investor or policyholder during the year. These changes will raise awareness of and benefit retail investors from the ongoing implicit costs of holding these products.

CCIR President Robert Bradley said, "The Insurance Regulatory Council of Canada supports consumers' access to complete and adequate information when making financial decisions. With this in mind, we have worked with other financial services regulators and industry to propose total cost reporting disclosure requirements for segregated funds and investment funds. The insurance regulator expects the insurance and investment industries to act in concert to bring TCR rules to market."

The relevant improvement requirements for the securities industry are included in the amendments to the Canadian National Instrument No. 31-103 Registration Requirements, Exemptions and Continuing Registration Obligations and accompanying Policy No. 31-103CP Registration Requirements, Exemptions and Continuing Registration Obligations. The Self-Regulatory Organization of Canada (New SRO) will revise its membership rules, policies and guidance to be consistent with these new regulations.

If approved by all the ministries, the above improved rules will come into effect on January 1, 2026. Customers will receive the first annual report that meets the latest disclosure requirements for the year ending December 31, 2026.