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MUTUAL FUND REGULATORY CHANGES FOR ORDER-EXECUTION-ONLY DEALERS

Amendments to National Instrument 81-105 Mutual Fund Sales Practices, came into force on June 1, 2022, and prohibit the payment of mutual fund trailing commissions to Order Execution Only (OEO) dealers. Trailer paying mutual fund securities should no longer be held in or transferred to OEO dealer accounts, like CC&L Private Capital.

To comply with the regulatory amendments, the industry will implement a series of actions as described in this disclosure (and in accordance with the terms and conditions of the CSA Temporary Exemption.

Post effective date, residuals and transfers

After June 1, 2022, there may be residual ineligible trailer paying funds in your account, or if you have chosen to transfer-in ineligible trailer paying funds, CC&L Private Capital will complete the following actions:

Within the prescribed grace period (up to 45 days), for DSC funds, where the manufacturer has not applied an manufacturer rebate, we will process a dealer rebate. For other trailer-paying funds, where the manufacturer has indicated there is a ‘like’ or ‘similar’ non-trailer-paying Destination Fund, we will process a dealer switch and a dealer rebate for any trailers paid during the grace period. Where a trailer-paying fund does not have a Destination Fund, we will process a dealer rebate.

In rare circumstances, CC&L Private Capital may need to request that you sell a fund or transfer out.

As a result, you may see changes and/or activity in your account where an equivalent non-trailer paying fund series is available, where an manufacturer rebate or a dealer rebate is applied. You will receive two confirmations from CC&L Private Capital for each dealer switch, the switch and rebate transactions will show in your history and on your accounts statements and will cause no tax implications. No action is required on you part.

Dealer switch implementation

Dealer switches will be implemented as soon as possible, and no later than 45 days after June 30, 2023.

Dealer rebate implementation

Where a dealer rebate is applied to your account, the dealer rebate is equivalent to the full trailer fee paid to QCC&L Private Capital from the manufacturer on applicable mutual funds, after June 1, 2022. Dealer rebates will be processed monthly (and no later than quarterly, subject to the payment frequency of the manufacturer) and will show in your account history and on your account statement, starting July 2022.

If you close your account prior to the payment of a dealer rebate and we are unable to locate you, we will donate the dealer rebate to a registered charity within 12 months of our receipt of the trailer payment, where permitted by applicable law.

Destination funds, eligible funds

You may obtain a copy of the Fund Facts document for your Destination Fund from the manufacturer’s website. The Funds Facts will not be delivered to you, unless requested in writing.

Contact us

If you have questions regarding these actions, which are required to comply with regulatory changes, please contact us:

Call: 1-888-276-2258
Email: pcmadmin@cclgroup.com