The Portfolio Management Association of Canada (PMAC), through its Industry, Regulation & Tax Committee, provided comments to the Department of Finance Canada (Finance) regarding Pre-budget Consultations 2020 (the Consultation).
PMAC represents 280 investment management firms that collectively manage over $2.8 trillion in assets under management, all of which are registered as portfolio managers with one or more of the Canadian Securities Administrators (CSA). PMAC members manage investment portfolios for private individuals, institutions, foundations, universities and pension plans.
We would like to highlight the following key recommendations:
- Adopt a “Look-Through” for pooled funds:
Adopt PMAC’s request for a “look-through” to underlying investors in the pension plans held in the pooled fund. A look-through would allow most pooled funds holding pension plan investments to meet the 150 unit-holder test, resulting in the same tax treatment as MFTs and segregated funds – which would prevent unfair tax penalties, and allow portfolio diversification and economies of scale that ultimately benefit investors; and
- Expand Trust Reporting Exemption:
Include pooled funds and exchange traded funds (ETFs) in the exemption from the requirement to disclose beneficial ownership information. There is no policy rationale for treating pooled funds and ETFs differently than MFTs and segregated funds in this respect.
The full submission can be read here.