Research
Starting in 2016, the Canadian Securities Administrators (CSA) undertook a multi-year research project to measure the impacts of requirements introduced by Phase 2 of the Client Relationship Model (CRM2) and the Point of Sale (POS) amendments on investors and industry. On this page you will find links to CSA-published research reports and summaries.
What are the CRM2 and POS amendments?
The CRM2 amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations came into effect and were phased in between 2014 and 2016. They were designed to ensure investors receive clear and complete disclosure of the performance of their investments and all fees associated with their accounts, including registrant compensation.
The POS amendments to National Instrument 81-101 Mutual Fund Prospectus Disclosure were proposed in 2009 and came into effect between 2015 and 2016. Similar to CRM2, these amendments were intended to provide investors with relevant and clear information about mutual funds to support them in making informed investment decisions.
Impact of the CRM2 and POS amendments on investor behaviour
The CSA conducted investor research to measure what investors knew and thought about fees and the performance of their investments, and how they interacted with advisers. A baseline survey took place in 2016, followed by six surveys from 2017 to 2019 after the implementation of the CRM2 and POS amendments. Each survey included 50 questions that collected information on more than 150 measurable items. Over the course of the surveys, investors generally reported:
- A better understanding of fees, including the impact of fees on their investments.
- Increased awareness of investment performance reporting.
- Having more discussions with their advisers about fees associated with their investments.
More findings can be found in the post-implementation research reports available at the following links:
- CSA Summary Report: 2016-2019 Investor Research Findings on the Impact of CRM2 and POS on Investor Knowledge, Attitudes, and Behaviour
- CRM2/POS 3-Year tracking study September 2019 Report - Annual Tracking
Impact of the CRM2 annual costs and performance reports on investment fund fees and performance
The most recent reports, published in 2024, examine the impacts of the CRM2 amendments on the investment fund industry and investor behaviour. The findings provide evidence that disclosure-based regulations may be an effective tool in changing industry and investor behaviour. Between 2013 and 2020, research on investment fund fees found that management expense ratios (MERs) and management fees decreased for both mutual funds and exchange traded funds (ETFs). The distribution of investment assets shifted towards funds that charged lower fees, and investment fund managers reduced the fees they charged investors.
Additional findings are included in the post-implementation reports on investment fund fees and performance available at the following links:
- Executive Summary: A Post-Implementation Review of The Impacts of The CRM2 Annual Costs and Performance Reports on Investment Fund Fees and Performance
- A Post-Implementation Review of The Impacts of The CRM2 Annual Costs and Performance Reports on Investment Fund Fees
- A Post-Implementation Review of The Impacts of The CRM2 Annual Costs and Performance Reports on Investment Fund Performance