Securities and insurance experts will be part of a new committee to establish how TCR will work for the financial services industry
Financial services regulators are moving forward with their quest for greater transparency on fees paid by investors.
Wealth Professional reported in April that the Canadian Securities Administrators (CSA) and the Canadian Council of Insurance Regulators (CCIR) have published enhancements to total cost reporting (TCR) disclosure for investment funds and individual segregated fund contracts.
The TCR enhancements will increase investors' and policyholders' awareness of the ongoing embedded costs of owning investment funds and individual segregated fund contracts, including management fees and trading expenses.
The next step for the regulators is to convene a committee of industry and regulatory experts to consider the challenges of implementing TCR.
With the participation of the Canadian Investment Regulatory Organization (CIRO) – the single SRO formed from the merger of IIROC and the MFDA – the committee aims to support industry stakeholders who will need to implement TCR enhancements by the end of 2025.
Channels will be established to enable industry stakeholders to ask questions and provide the committee with updates on their progress towards implementation.
Speaking to Wealth Professional recently, Dan Hallett, vice president, research and principal at Highview Financial Group said that the enhanced TCR requirements will be a major matter for dealers and financial advice providers.
“Once we have a really clear set of requirements and deadlines, they'll get this done,” he said. “Are they ready, if they had to flip the switch today? Probably not, because they haven't been required to do this ever before.”
Committee members
The CSA and CCIR will be identifying potential participants for the committee and will be looking for those with the right level of technical expertise.
The TCR enhancements were jointly developed by the CSA, the CCIR, the Canadian Insurance Services Regulatory Organizations (CISRO) and CIRO. Both securities registrants and insurers will have to deliver the first enhanced annual reports to clients and policyholders for the calendar year ending December 31, 2026.
