Full Story:
On Friday July 28, 2006, the Canadian Securities Administrators (CSA) released National Instrument 81-107-Independent Review Committee for Investment Funds.see the full NI here.
The new rule requires all investment funds that are reporting issuers to establish an Independent Review Committee (IRC) to oversee all decisions involving conflicts of interest faced by a fund manager. The role of the IRC, depending on the nature of the conflict, will be to either approve the fund manager’s decision or provide recommendations before the manager may proceed.
The new rule and related amendments are likely to be in force as early as November 1, 2006.
Existing funds will have six months after the new rule comes into force within which to appoint the first members of the IRC, but the CSA strongly encourages a timely appointment of an IRC by the fund manager.
We recommend that you start to act now by:
1. Signing up for the upcoming seminar on IRCs scheduled for 5th October 2006 to learn all about the new rule. Register NOW;
2. Contacting us - call us on 416.849.1928 or online- if you need any help in setting up an IRC.
The commentary on the new rule expressly indicates that third parties may establish an IRC for an investment fund and that multiple funds may share such an IRC. Indeed, the CSA comment that managers of smaller families of investment funds may find this to be a cost-effective way to establish an IRC for their funds. Independent Review Inc. specialises in providing independent fund governance services and is able to establish and run IRCs for public mutual funds (in accordance with the legal requirements of the new rule).
Please let us know if we can be of any assistance as you seek to comply with the new rule.
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