The Canadian Investment Funds Standards Committee is altering the criteria for funds in the Canadian Income Balanced Funds category.

To qualify for this category, funds will be required to make distributions of income and/or realized capital gains on a monthly basis, subject to a minimum frequency of 10 distributions over the past 12-month period.

The CIFSC is also dropping the current requirement that these funds must have a three-year median income distribution to net asset value ratio (INAV) greater than the median INAV for the Canadian balanced category.

The committee has approved the revised definition, which takes effect as of the Sept. 30 data reporting period. The CIFSC says it believes that the revisions approved at its monthly meeting on Sept. 22 will simplify the definition of the category, and address concerns raised by the industry.

“A number of fund managers commented that the original definition lacked transparency and inappropriately included funds that made quarterly distributions but that were not being managed as income-oriented balanced funds,” it says.

As a result of the change, all funds currently in the Canadian Income Balanced category that make only quarterly distributions will be removed from the category by CIFSC-compliant fund measurement firms next month, it notes.