Canada Proposes its Own Version of Prospectus Profiles

Canadian regulators have given a new name to the “prospectus profile,” an idea that has been knocked around in the U.S. over the past eight years.

They are considering requiring fund companies and sales agents to supply investors with a two-page “Fund Facts” synopsis of fund costs and past returns, The Toronto Star reports. Written at a fifth-grade level, it would be void of industry jargon. Fund Facts would not replace prospectuses, however.

“We need to make sure the information investors get is useful to them,” said British Columbia Securities Commission Chairman Doug Hyndman. “This is a good, basic document that gives you the core of what you need to know to make a decision.”

Bill Rice, chairman of the Alberta Securities Commission, agreed. Prospectuses “are voluminous, intimidating, and we know they’re not being read,” he said.