Regulations Promote Back-Office Upgrades

Terry Flanagan

Canadian Securities Administrators amends electronic delivery policy.

Asset managers are implementing technology to cope with new and existing regulations, covering areas such as new issue fulfillment, electronic delivery of documents, and point-of-sale disclosures.

The Canadian Securities Administrators on Nov. 18 adopted amendments to National Policy 11-201 (Delivery of Documents by Electronic Means). On the effective date, this policy will be renamed National Policy 11-201 Electronic Delivery of Documents (NP 11-201).

“The newly amended policy guideline in NP 11-201 moves to embrace current technology that better defines the practice of electronic document delivery,” Robert Lees, senior manager, strategic product development, at Broadridge Financial Solutions, told Markets Media.

Broadridge has provided an electronic document delivery service to public companies and mutual funds since 2000. “Broadridge supports its clients by providing an electronic delivery component in all of its products and services where document fulfillment is required,” said Lees

There are also applicable compliance requirements related to new issue fulfillment.

“Any final prospectus must be delivered by the dealer not later than two days after the trade date, unless the dealer has distributed the prospectus previously,” said Lees. “This delivery is triggered by a trade.

Edward Jones has chosen Broadridge Canada’s New Issue Fulfillment solution for communication and delivery of transaction confirmations and required compliance documents for new issue equity and fixed income products in Canada, Broadridge said.

“New Issue Document Fulfillment is a solution for the communication and delivery of transaction confirmations and required compliance documents to investors who have purchased new issue equity and fixed income products,” said Lees.

The solution incorporates print on demand technology with inventory management and provides concise audit reporting, supporting multiple new issues while ensuring that the most current documents are available for distribution.

The results of this service implementation will be minimized costs and substantial improvements in operational efficiencies, said Broadridge.

Point-of-sale requirements are driving adoption of automated solutions for creation and distribution of mutual fund documents.

The CSA now requires “Fund Facts” for each mutual fund class or series.

The CSA’s Fund Facts requirement places new responsibilities on fund administrators at mutual funds and segregated funds to create and deliver more information to investors.

The Fund Facts document represents the first stage of the CSA’s implementation of the point of sale disclosure project for mutual funds. I

In the second stage, the CSA will publish a proposal to allow delivery of the fund facts instead of the simplified prospectus to satisfy existing delivery requirements under securities legislation.

In the third and final stage, the CSA intends to publish requirements for point of sale delivery of the fund facts for mutual funds; the CSA will also consider point of sale disclosure for other types of publicly-offered investment funds.

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