The Canadian Securities Administrators (CSA) is considering measures to provide investors with more meaningful and effective disclosure about scholarship plans.

On Wednesday, the CSA published for comment amendments to National Instrument 41-101 General Prospectus Requirements and Form 41-101F2 Information Required in an Investment Fund Prospectus.

The proposed amendments comprised the first phase of the CSA’s approach to modernize the regulation of scholarship plans.

The proposal includes Form 41-101F3 Information Required in a Scholarship Plan Prospectus, a new form that is tailored to the unique features of scholarship plans.

Central to the proposal is a new Plan Summary document that highlights the potential benefits, risks and costs of investing in a scholarship plan. It is written in plain language, will generally be no more than three pages and will be delivered with the prospectus.

“We know that investors often have trouble understanding the unique features and complexity of scholarship plans,” said Jean St-Gelais, chairman of the CSA and president & CEO of Quebec’s Autorité des marchés financiers.

“The new prospectus form will provide investors with the opportunity to make more informed investment decisions by giving them key information in language they can better understand,” St-Gelais added.

The need for clearer and simpler prospectus disclosure for scholarship plans was also identified in Review of Registered Education Savings Plan Industry Practices, a 2008 report prepared for the department of Human Resources and Social Development Canada (HRSDC).

The CSA is seeking input from all stakeholders on the proposals. The comment period is open until June 22, 2010.

IE