IRI’s IRC One-Stop Solution

IRI can assist you by setting up your IRC and helping you meet your obligations under National Instrument 81-107.

IRI identifies, codifies, and manages conflicts of interest for mutual fund managers and their IRCs.

Independent Review Inc.’s Business Solutions

A Manager can outsource its independent review committee obligations to Independent Review Inc. We will assist in the implementation and maintenance of the committee for the Fund (thus saving the Fund the time and expense of constituting its own IRC and having to find and appoint appropriate, independent persons). Do you want to start implementing an IRC now? If you do, please call us today at 416.849.1928.

IRI provides a cost effective solution to make sure your IRC is fully compliant at all times.

IRI offers its IRC service to mutual fund families and hedge funds as a turn-key way to set up and run an IRC. In other words, a mutual fund client can outsource its independent review committee obligations to Independent Review Inc. We can manage all the operations of the IRC, including scheduling and holding meetings (as and when required), preparing minutes and reports, arranging the attendance of outside experts (where appropriate), and the selection and appointment of new or additional members of the committee.

Independent Review Inc. is the easiest way to establish a first class IRC.

IRI’s independent secretariat service ensures that the IRC’s records are maintained in accordance with the requirements of the Instrument and the best practices in the industry. In addition, IRI maintains the records of its IRC’s clients in a safe and secure online repository. The documents are then available to the IRC members at any time.

IRI ensures that the implementation fee and the fixed annual maintenance fees agreed with the Fund will cover all the expenses of managing the committee, with the exception of any Outside Counsel fees. The Fund is not, therefore, subject to any unexpected, additional expenses, charges or membership fees in respect of an IRImanaged committee.

Independent Review inc. is the lowest-cost, easiest way to establish a first class IRC.

For more details on how to set up and run an Independent Review Committee please call us at 416.849.1928.




Independent Review Committees for Public Mutual Funds and Private Hedge Funds


The Governance of public mutual funds is now a hot topic around the world. In the U.S., the SEC has mandated that the Chairman and at least 75% of the board of all public mutual funds must be totally independent from the investment manager. Here in Canada, the Canadian Securities Administrators introduced a new National Instrument 81-107 entitled “Independent Review Committee for Mutual Funds” (the “Instrument”). The Instrument came into force on November 1, 2006 and the first IRC members for existing funds had to be appointed before May 1, 2007. New funds are now required to have their IRC up and running before the manager can accept purchases in the fund.

The Instrument requires all publicly offered mutual funds (including closed-end listed funds) to have an independent review committee which is charged with reviewing any conflicts of interest that may arise out of the management of the funds and making recommendations to the manager as to how these conflicts may be fairly resolved. The IRC is a committee of at least 3 individuals, each of whom is independent of the manager and the fund.

In the past, many commentators in the industry pointed out that there was a very limited pool of people who were both suitably qualified and willing to take on the role of an IRC member (particularly in view of the potential legal liabilities that might attach to such a role) and that such committees may impose a significant cost burden on the investment fund industry.

The Regulators’ Perception

“The national public interest and the interest of investors are adversely affected when investment companies [ funds] are organized, operated and managed, or their portfolio securites are selected, in the interest of [others], rather than in the interest of all classes of such companies’ security holders.” —The Securities Exchange Commission (SEC)

The Investment Company Act 1940 (US)

The International Organization of Securities Commissions (IOSCO) recently defined investment fund governance to be a framework for the organization and operation of investment funds that seeks to ensure that investment funds are organized and operated in the interests of fund investors, and not in the interests of fund insiders.

“In compliance with the governance principles recently articulated by IOSCO, [NI 81-107] provides for the independent review and oversight of the conflicts faced by the fund manager in the operation of the investment fund....The CSA believe managers of all investment funds, large and small, face conflicts of interest and will benefit from the independent perspective brought to bear by an independent body on such matters.”

Improving fund governance has been a priority for the Canadian securities regulators for several years. The process began in the 1990s with a debate over the need for independent boards for mutual funds and increased regulatory standards for fund managers.

National Instrument 81-107 now imposes a minimum, consistent standard of independent oversight for all publicly offered investment funds in each of the jurisdictions represented by the Canadian Securities Administrators (the CSA). The new rules embody the emerging international standards on fund governance but the CSA has tailored these to the specific structures of the Canadian investment fund industry and the Independent Review Committee model is unique to Canada.



Core Document Database

  • CLICK HERE to see NI 81-107 (published July 2006).
  • CLICK HERE to see the cost benefit analysis on the introduction of IRCs for Mutual Funds, as prepared by the OSC.
  • CLICK HERE to see the FAQ on NI 81-107 issued by the CSA in March 2007.

Download a complimentary copy of our industry leading White Paper entitled “NATIONAL INSTRUMENT 81-107: AN INTRODUCTION TO INDEPENDENT REVIEW COMMITTEES”.

Download an article written by W. William Woods, President & CEO of IRI, entitled “BUILDING AN EFFECTIVE GOVERNANCE PROGRAM FOR HEDGE FUNDS”. The article is excerpted from “Starting a Hedge Fund — a Canadian Perspective”, published by ISI Publications.

Do you need more information about IRCs? Do you want to start setting up an IRC now? If you do, please call us today at +1 416-849-1928 or submit your inquiry using our WEB INQUIRY FORM.

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Independent Review Inc.
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Suite 1316, North Tower
Toronto, ON M4W 3R8
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