With changes looming to point-of-sale disclosure for mutual funds and segregated funds, the Investment Funds Institute of Canada (IFIC) is urging members to voice their concerns over potential implications of the framework.

Industry members gathered today in Toronto to hear an overview of the framework proposed by the Joint Forum of Financial Market Regulators, and concerns related to it. First released in June 2007, the framework was designed with a goal of improving disclosure to retail investors.

Following industry consultations, draft revisions to the framework were released in June of this year, and the Joint Forum is set to release its final paper to regulators next month.

While the Joint Forum has made promising efforts to understand industry concerns, the revisions fail to address some of the framework’s key problems, said George Aguiar, CEO of GP Wealth Management and an IFIC board member.

“The fact of the matter is that the amendments have become even more cumbersome,” he said.

IFIC’s primary concern with the framework involves delivery requirements related to a fund summary document called Fund Facts, which would be required to be delivered to investors before they buy into a fund. According to the IFIC, the requirements would increase compliance and administrative burdens facing advisors.

“The issue from day one has been cumbersome delivery,” said Murray Taylor, CEO of Investors Group and an IFIC board member.

The framework would also put mutual funds and segregated funds at a disadvantage to other investment products, given the transaction delays, Aguiar said. “If the option to purchase a mutual fund is cumbersome, choices will be made.”

Moreover, with Pollara surveys in 2006 and 2008 showing that 91% of investors surveyed felt either very comfortable or somewhat comfortable that they had the right information to make an informed decision, Taylor questioned the necessity of stringent new disclosure requirements.

“We do not believe there’s a compelling problem on the minds of mutual fund unit holders,” he said.

Although the final framework has not yet been published, a stakeholder meeting with the Joint Forum revealed details of what will likely be included. With many of the same concerns unaddressed and new concerns raised, the IFIC sent a letter to the forum on September 2 with comments.

IFIC also asked the Joint Forum to hold another round of public consultations, arguing that one opportunity for the public to give feedback is not sufficient.

With the final framework set to be released in less than a month, IFIC CEO Joanne DeLaurentiis encouraged industry members to familiarize themselves with the proposals and contact the Joint Forum with their concerns as soon as possible.

“In many ways the impact isn’t going to be known until it’s too late,” she said.

Once the framework is in the hands of the regulators, more consultations will take place through 2009, DeLaurentiis said. Actual changes to disclosure regulations would not likely be implemented until 2010.