Compliance Memo

CM_2021-02; OSC moves to ban DSC purchase option in Ontario

For more information, contact:

Compliance Team
compliance@gpwealth.ca

Date Issued:

May 12, 2021

As you may have already heard, on May 7th, 2021, the Ontario Securities Commission (OSC) announced that they will move forward with a ban on the use of the Deferred Sales Charge (DSC) purchase option for mutual funds sold in Ontario.

The prohibition will come into effect on June 1, 2022 and will result in the discontinuation of all forms of the DSC purchase option. Mutual funds sold under the DSC purchase option prior to this date will not have to be converted to another sales charge option (i.e., the redemption schedules on such DSC holdings will be allowed to run until their scheduled expiry).

The OSC Staff Notice 81-731 Next Steps on Deferred Sales Charges, which provides additional details in respect of the OSC’s DSC ban, can be found by clicking here.

As a reminder, all mutual funds recommended to a client with a DSC purchase option prior to June 1, 2022, must continue to include detailed notes providing the rationale for the purchase option. 

As always, if you have questions or comments, contact the Compliance Department by email at compliance@gpwealth.ca.