The Investment Funds Institute of Canada says that it is pleased with progress toward eliminating foreign content restrictions, and facilitating RSP clone fund mergers.

In the 2005 budget, the federal government proposed the elimination of the 30% limit on foreign content in RRSPs and pension plans. The move is to be retroactive to January 1, but IFIC notes that fund companies “were hesitant to put the change into place without more certainty that the proposal would become law”.

Earlier this week, the Minister of Finance tabled the required Ways and Means motion to implement certain budget measures, including the elimination of the foreign property limit.

As well, the Canadian Securities Administrators released a notice, following a request by IFIC, to provide some guidance to the industry on complying with securities laws while changing their fund lineups in response to the removal of foreign content restrictions. “In the notice, the CSA acknowledged it may take some time for the budget legislative process to work its way through the system. And while it said it was not recommending any specific course of action, the CSA did offer some guidance on securityholder approval and timely disclosure requirements with respect to eliminating forward contracts in certain RSP clone funds,” IFIC says.

“It’s a good indicator when the industry, the regulators and the federal government are all on the same page,” said John Murray, IFIC’s vp, regulation and corporate affairs. “We will continue to work with regulators and the federal government to ensure a timely implementation of the budget proposal.”