The OSC recently restricted fund companies’ ability to use industry awards in their advertisements. This news was largely unexpected and has been met with criticism by the industry. The OSC states, “It is staff’s view that awards are, in substance, performance based ratings … The sales communication requirements for mutual funds in Part 15 of NI 81-102 do not permit the use of a performance rating or ranking of a mutual fund this is based partially on a subjective component.”
Ostensibly, the rule regarding advertising performance ratings is meant to prevent fund companies from manipulating the calculations to make a fund’s performance seem more attractive.
David O’Leary – Advisor.ca – September 28, 2015.
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