The Ontario Securities Commission (OSC) has released its findings following an issue-oriented review of general compliance with National Instrument 81-106 Investment Fund Continuous Disclosure.

OSC Staff Notice 81-709 summarizes the findings and comments arising from the continuous disclosure review program conducted by the Investment Funds Branch of the OSC.

Staff reviewed a sample of investment fund managers who, in total, manage approximately 45% of the industry’s assets under management.

According to the OSC, staff noted several areas for improvement in terms of the quality of management’s discussion, overall presentation and ongoing regulatory compliance. In particular, OSC staff want to emphasize that the management discussion of fund performance should provide a historical and prospective analysis of the operations of the fund so that, together with the financial information, investors have a complete picture of the fund’s performance.

The aim of the notice is to assist preparers of financial statements and management reports of fund performance in improving their continuous disclosure.

While staff’s review focused on conventional mutual funds, the notice provides guidance that should be considered by closed-end and exchange-traded funds to ensure their continuous disclosure is in compliance with securities legislation.