The required wording lays out the arrangement plainly. It reads: “We have [an exclusive right to distribute/a material competitive advantage over others in distributing/an exclusive right to distribute or a material competitive advantage over others in distributing] the securities of mutual funds managed by [insert name of fund manager]. [Insert name of fund manager] pays us up to a maximum of [insert percentage of the management fee] % of the fund’s management fee for providing services as a principal distributor.”
The companion policy guidance explains why this matters to investors. A principal distributor may have its own arrangement with the investment fund manager it distributes for, and the percentage of the management fee it receives can vary depending on how much in assets under management is attributed to that distributor. The footnote is meant to give clients visibility into that financial interest, regardless of how the arrangement is structured.
The guidance also heads off duplicate reporting. Firms that disclose a payment under the new paragraph (v) are not expected to disclose that same payment again under paragraph 14.17(1)(g), since the two provisions aren’t meant to capture the same amount twice.
Firms aren’t required to comply right away. The amendment lets a firm keep following National Instrument 31-103 as it stood on December 31, 2026, right up until January 1, 2029, before the footnote disclosure becomes mandatory for it. The instrument itself takes effect January 1, 2027, with one regional wrinkle: in Saskatchewan, if it’s filed with the Registrar of Regulations after that date, it comes into force on the day it’s actually filed. The companion policy guidance takes effect on the same January 1, 2027 date.
Firms running a principal distributor model now have a concrete item to work into their client reporting, along with clearer guidance on what does – and doesn’t – need to be disclosed twice.
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