AMF review finds errors in fund risk disclosure

June 18, 2021

first_img Investment fund managers need to do a better job of calculating and disclosing the riskiness of their funds in their Fund Facts and ETF Facts disclosures, says the Autorité des marchés financiers (AMF) in a notice published Thursday.The Notice relating to the findings of a thematic review of the investment risk classification methodology sets out the results of a review of investment funds’ compliance with the investment risk classification disclosure requirements. IOSCO, FSB to examine fund liquidity during Covid Related news The AMF’s review found that 9% of the funds it examined did not use a new risk classification methodology, which took effect Sept. 1, 2017.Also readCSA decides on standard deviation to classify riskiness of fundsMissing the mark“This failure to comply with regulatory requirements sometimes resulted in incorrect risk levels being disclosed in the most recent Fund Facts document,” the AMF says in the notice.The review also found 13% of funds made errors in calculating standard deviation; 13% also used different indices in their Fund Facts documents and in the management report of fund performance; and 35% had areas of non-compliance with regulatory disclosure requirements.“As a result of these findings, we compelled certain mutual funds to make immediate or prospective changes to the prospectus and Fund Facts document,” the notice says.The AMF expects investment fund managers to use the findings of its review to assess their own use of the new investment risk classification methodology, and their reporting to investors.“As part of its investment fund oversight program, the [AMF] will continue to closely monitor how the issues identified during this thematic review evolve,” the notice says. Share this article and your comments with peers on social media AMF sanctions Desjardins over fund sales practices Keywords Risk rating,  Mutual funds,  ETFsCompanies Autorité des marchés financiers James Langton Facebook LinkedIn Twitter Risk versus value matrix with pushpins and blur effect risk assessment concept olivier26/123RF Proposal deletes MFDA rules for limited trading authorizationlast_img

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