The Canadian fund industry is lobbying against new securities regulations that require mutual fund prospectuses to compare past performance to market benchmarks. The mandatory references to market indexes are among the more controversial aspects of the legislation, National Instrument 81-101. The sweeping new rule took effect on Feb. 1 and is coming into force gradually this year as fund companies revise their prospectuses and introduce new funds.
Forcing fund companies to compare the past performance of their funds to market benchmarks is "one of the areas we have problems with," said Lori Lalonde, senior counsel for the Investment Funds Institute of Canada (IFIC). Though it is generally supportive of the new disclosure rules, the trade group would prefer to see funds required to be compared to similar funds in the same category, said Lalonde.