Industry


Marketing & Sales


Investment funds generally sell their securities through a registered dealer. Dealers are registered in various categories, depending on the products they sell. Dealers registered as mutual fund dealers and investment dealers are required to be members of a self-regulatory organization recognized by the OSC.

Equity Interest Disclosure Document and Client Consent

In certain cases, dealers may be required to deliver a disclosure document to a purchaser of mutual fund securities and obtain the prior written consent of the purchaser before the trade is completed. The disclosure document contains information regarding equity relationships between the mutual fund manager and its affiliates and the dealer, its sales representatives and their associates. For more information on this delivery and consent requirement, see Part 8 of National Instrument 81-105 Mutual Fund Sales Practices.

Advertising and Marketing

The advertising and marketing of securities of an investment fund that files a prospectus are subject to restrictions in the Securities Act (Ontario) and related national instruments.

During the period between the issue of a receipt for a preliminary prospectus and the issue of a receipt for the final prospectus (the waiting period), dealers are only permitted to distribute copies of the preliminary prospectus, solicit expressions of interest from prospective purchasers and distribute limited notices and advertisements. After a receipt for the final prospectus has been issued, dealers are permitted to distribute copies of the prospectus and certain restricted advertisements when selling securities.

Part 13A of National Instrument 41-101 General Prospectus Requirements and Part 15 of National Instrument NI 81-102 Investment Funds, set out the requirements for the preparation of sales communications of investment funds. For more information, see Sales Communications.

There are restrictions on the sales practices and compensation arrangements of dealers that sell securities of a mutual fund that has offered securities by way of a prospectus. For more information, see Dealer Compensation.