CSA streamlines investment fund reporting requirements

On January 22, 2026, the Canadian Securities Administrators (CSA) finalized previously proposed amendments to the investment fund disclosure regime (CD Modernization Project). The CD Modernization Project includes amendments to National Instruments 81-101, 81-102, 81-106, 81-107, and to Forms 81-101F1 and 81-101F2 and introduces a new Form 81-107A. These amendments (collectively, the Amendments) are intended to reduce unnecessary regulatory burden associated with certain disclosure requirements.

The Amendments aim to:

• streamline the continuous disclosure framework for investment funds to better align with International Financial Reporting Standards (IFRS);
• distinguish securities law disclosure requirements from IFRS-driven financial statement disclosure, in an effort to ensure disclosure is reframed with investor comprehension as a priority rather than technical compliance;
• create a consistent interpretation of key terms across related national instruments (e.g., “related party” and “fees”); and
• centralize the location of information to reduce unnecessary or duplicative filings and lower administrative burdens (e.g., remove the need for a separate filing category on SEDAR+), while maintaining investor protection and market integrity.

The Amendments came into force on April 22, 2026, with a transition period for certain requirements extending until January 1, 2027.

CD Modernization Project – Workstreams

The CD Modernization Project was divided into three distinct workstreams:

• Workstream one: Replace the current annual and interim Management Report of Fund Performance (MRFP) with a new Annual Fund Report to reduce the regulatory burden for investment fund managers (IFMs) and improve the clarity and readability of investor disclosure.
• Workstream two: Replace the overlapping statutory requirements for related party transactions by introducing Form 81‑107A Conflict Reporting Form for Related Issuer Purchases (Form 81-107A) for disclosure of related issuer purchases, and an annual Manager’s Report on Related Party Transactions (the Annual Manager’s Report) to be appended to the Independent Review Committee Report to Securityholders (IRC Report).
• Workstream three: Remove the requirement to prepare certain class or series-level disclosures in financial statements to better align with IFRS.

The CSA ultimately adopted amendments arising from Workstreams Two and Three. In response to stakeholder comments, the CSA made non-material refinements to Workstream Two, while adopting Workstream Three and the simplified prospectus disclosure amendments under NI 81-101 as initially proposed. By contrast, the amendments proposed under Workstream One have not been finalized and continue to be advanced as part of that workstream. Accordingly, this bulletin only focuses on Workstreams Two and Three.

Changes to IFM reports on related party transactions disclosure requirements

Location of the disclosure

Historically, IFMs were required to disclose related party transactions and conflicts of interest in the MRFP. Under the Amendments, this disclosure will no longer be included in the MRFP and will be consolidated in a standalone Annual Manager Report, which will be appended to the IRC Report.

In practice, IFMs should update their internal reporting structure to ensure that information required for the Annual Manager’s Report is prepared and appended to the IRC Report package, rather than being disclosed through the MRFP. The CSA has also asked IFMs to ensure related party transactions in the IRC Report are disclosed for securities law disclosure purposes, rather than being framed by IFRS financial statement reporting considerations.

Though stakeholders opposed the initial proposal, the CSA did not change the location of the disclosure, noting the change is intended to consolidate and centralize fund-specific conflict of interest and related party information in one place. Additionally, the CSA has noted the proposal avoids the requirement for a separate SEDAR+ filing category for the Annual Manager’s Report, in an effort to reduce confusion for investors, the Independent Review Committee and securityholders.

Definition of “related party”

Under the current regime, NI 81-107 refers to an “entity related to the manager,” while “related party” is separately defined in NI 81-106, creating some inconsistency across instruments. As initially proposed, the CSA introduced a new definition of “related party to an investment fund” in NI 81-107. Stakeholders commented that this Amendment could broaden the scope of reportable relationships beyond what was contemplated and create further inconsistency with existing terminology.

In response to these concerns, the CSA ultimately decided not to introduce a new definition in NI 81‑107. As a result, IFMs are required to report only transactions involving an “entity related to the manager,” as contemplated by section 1.3 of NI 81‑107.

Elimination of preparation date requirement

Historically, IFMs were required to disclose the exact date a related party transaction report was prepared. Stakeholder feedback on the CSA’s initial proposal noted that Annual Manager Reports are typically prepared over time, making it difficult to assign a single preparation date. In response, the CSA revised the date requirement in the new Form 81-107A to only require IFMs to identify the financial year to which the report applies.

Changes to IFM reports on conflicts of interest disclosure requirements

Elimination of disclosure regarding the source of independent quote / pricing

The CSA’s initial proposal in Form 81-107A did not deviate from the current regime, under which IFMs are required to disclose sources of independent quotes or pricing. Commenters considered this requirement burdensome and of limited benefit, and the CSA ultimately removed it entirely.

Broadening compensation disclosure

Currently, compensation disclosure regarding related parties is fragmented across multiple instruments, leading the CSA to require IFMs to disclose the name of any related person or company that has received, or will receive, a “fee in respect of the investment made” in the initial draft of the proposed Form 81-107A. In response to the CSA’s initial proposal, commenters addressed the lack of clarity regarding the term “fees” and suggested replacing the term with “compensation” to better account for the types of transactions that will trigger this reporting requirement.

As a result, the CSA expanded the requirement so that IFMs must disclose “any related persons or company that has received, or will receive a fee, commission, or other form of compensation”. In practice, this requires IFMs to track and report all forms of transaction related compensation paid to related parties.

IFMs should ensure their internal processes capture compensation across different structures, including arrangements where compensation may not be characterized as a traditional fee (i.e., fixed-income transactions). The CSA noted IFMs are generally the only parties positioned to determine whether and how compensation was paid in connection with an investment.

Revisions to the contents of simplified prospectus (Form 81-101F1)

In finalizing the Amendments, the CSA scaled back certain elements of its initial proposal that commenters indicated would require extensive restructuring of prospectus disclosure with limited benefit to investors. Consequently, IFMs are no longer expected to include duplicative or highly specific disclosure, such as certain class or series level disclosure, where the same information is available elsewhere in the fund’s continuous disclosure record.

Instead, the CSA has asked IFMs to ensure a simplified prospectus presents material information in a more concise, investor-focused manner, with an emphasis on clarity and usability rather than technical completeness. IFMs should note that, unlike some other aspects of the CD Modernization Project, these changes apply without a transition period, requiring any simplified prospectus filed on or after April 22, 2026 to be fully compliant with the amended Form 81-101F1.

Key takeaways for IFMs when filing

• Ensure disclosure, including compensation, regarding related party transactions, is prepared on the newly adopted Form 81-107A.
• Inquire if the transitional relief required to append an Annual Manager’s Report to an IRC Report is available. Transitional relief is generally available with respect to IRC Reports filed before April 22, 2026. If this transitional relief is available, IFMs will not be required to comply with the Amendments until January 1, 2027.
• Expect continued scrutiny from the IRCs on the completeness and clarity of the consolidated disclosure, notwithstanding the elimination of certain requirements to the Annual Manager’s Report.
• Review simplified prospectuses to ensure compliance with the disclosure requirements under the newly amended Form 81‑
• Assess whether internal disclosure processes appropriately distinguish between IFRS-driven financial statement disclosure and securities law disclosure obligations, particularly in light of the relocation of related-party and conflict of interest reporting in the IRC Report appendix.