Canadian securities regulators are initiating research on the impact of fees and commissions on fund sales, which will help determine whether they decide to intervene with industry compensation structures.
The Canadian Securities Administrators (CSA) have issued a request for proposals (RFP) regarding research on mutual fund fee structures, which it says represents an important step in “advancing a policy decision on mutual fund fees”.
To inform that decision, the CSA is seeking proposals for two independent pieces of research. One would be designed to evaluate whether sales and trailing commissions influence fund sales; and if so, how much; and, the other will examine how choices between fee-based and commission-based compensation impacts advice and investment outcomes over the long term.
Interested firms should respond to the RFP (Reference # OSC201314M-93) by 14:00 ET on May 5. The RFP is available through MERX (Reference # 291559) at www.merx.com.
The CSA launched its consultation in this area in late 2012, and last year concluded that the policy debate in this area is inextricably linked to the debate over whether to impose higher standards of conduct on the industry too. However, it has yet to make any firm policy decisions in either area, and has promised further research to inform those deliberations.
Last week, the Ontario Securities Commission (OSC) indicated in its latest draft statement of priorities that it expects to make a decision on whether to ban or cap embedded mutual fund commissions in early 2015.
(See Investment Executive, OSC to rule on embedded commissions in 2015, April 3, 2014.)