A new rule designed to provide Canadian investors with greater information about ETF products has come into force. ETF issuers must now file a succinct, plain-language summary known as an “ETF Facts” document when filing a preliminary prospectus with regulators. Requirements for providing a similar document already exist in Europe.

The new disclosure requirements bring the ETF industry in line with the mutual fund industry in Canada.

The Canadian Securities Administrators (CSA) estimates it will take 13 months for all ETFs to have an accompanying ETF Facts document as they renew their prospectuses. The deadline for all ETFs to have such a document is not until November 2018.

The new disclosure regulations are designed to help investors struggling to get to grips with traditional prospectuses which are often too long and dense to equip the average investor with meaningful information.

The new document must not be longer than two double-sided pages and must include certain key information about the fund including past performance, risks and fees written in plain language.

The changes bring the Canadian ETF industry in line with the mutual fund industry which must already provide similar “Fund Facts” document.