KEY RECOMMENDATIONS:
1. Introduce the Fund Report changes to come into effect concurrently with or
subsequent to the TCR Amendments coming into force, with initial reports
being provided in 2027 at the earliest
Many IFMs will rely on third party service providers to create the report, which
requires a longer timeframe to make necessary changes. This is especially the case
for firms that have a large number of funds. Aligning the timing of the Fund Report
and the TCR report will be less confusing to investors.
2. Remove or revise the sample disclosure table provided on page 1 of the
sample Fund Report to remove references to future outcomes
There should not be a requirement for IFMs to provide a future outlook on “factors
that may impact its ability to satisfy the fund objectives.” The current requirement to
disclose why the fund has performed as it has does not rely on forward-looking
information. Creating a new requirement that IFMs include forward-looking
information in Fund Reports would introduce significant risk to IFMs and would not
be useful to investors. The table on page 1 also inappropriately conflates fund
objectives with fund value. This will be confusing to investors. It is also not clear what
“success” is intended in terms of achieving investment objectives.
3. Provide performance information for all series of funds
We believe that presenting performance information for only certain series of funds
will be confusing to investors and misleading, given that it will only be relevant and
useful to investors holding that series. The highest and lowest fee series are not often
the most widely used, and will misrepresent what most securityholders are actually
invested in.
4. Remove the proposed liquidity disclosure
We do not believe that the proposed liquidity disclosure will be useful to investors,
and it may cause confusion. Most funds are sufficiently diversified to allow investors
to redeem on demand, as set out in the prospectus. Investors would require a
detailed explanation to understand the proposed data, which should not be included
in the Fund Report.
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