Regulators lay groundwork for total cost reporting

Securities and insurance regulators are assembling an industry committee to work through the challenges of implementing total cost reporting.

The Canadian Securities Administrators, the Canadian Council of Insurance Regulators and the Canadian Investment Regulatory Organization are creating a group that will include representatives from the industry, trade groups and other players to help guide the adoption of the new total cost reporting (TCR) requirements.

The rules build on the client relationship model (CRM2) reforms, aiming to give investment fund and segregated fund investors greater transparency into the costs of investing. The new TCR requirements will expand client reporting to include management fees and trading expenses while extending similar disclosure obligations to insurers’ segregated funds for the first time.

However, as with the CRM2 reforms, the new requirements are expected to pose implementation challenges. Industry firms will have to build systems and processes to ensure the required information can be collected, processed and delivered to investors on time.

To that end, when the regulators finalized the new requirements back in April, they indicated a committee would help address the technical challenges.

“The committee will support industry stakeholders in their implementation of the TCR enhancements within the transition period, which ends Dec. 31, 2025, by providing guidance and responding to questions,” the regulators said.

The rule changes won’t require firms to start providing investors with TCR-compliant reporting until 2027, with annual reports for the year ended Dec. 31, 2026 to include the first TCR disclosures.

“The committee will allow industry participants to consult regulators on questions related to implementation, as well as allow regulators to be informed of industry progress toward the implementation of the TCR enhancements,” the regulators said. Firms will be able to put questions directly to regulators as well as through industry trade groups.

In forming the committee, the regulators said they’ll “reach out to industry participants, including industry associations and other stakeholders, to identify potential participants with appropriate technical expertise.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.