Proposed regulatory rule changes announced today by Canada’s provincial securities regulators aim to give investors more disclosure about scholarship plans. Included in the changes, is a new form tailored to meet the needs of investors who have little or no experience purchasing investment products.


Currently, scholarship plans disclose a great deal of information through documents that tend to be long and complex – the prospectus, the financial statements, and the plan contracts. These documents provide critical information, but are difficult for less experienced investors to understand.


Central to the new form regulators are planning to introduce in May is the Plan Summary. This short, concise document provides investors with key information in a simple, accessible and comparable format. The Plan Summary is in plain language and provides important information about the potential risks and costs of investing in a scholarship plan.


“Saving for a child’s education is an important step in investment planning and these materials are aimed at providing families with information in an easy-to-understand format in order to help them make an informed investment decision,” said Bill Rice, Chair of the Canadian Securities Administrators and Chair and CEO of the Alberta Securities Commission.


Materials related to the announcement are available on the BCSC website. We have a Scholarship Plan section on InvestRight that explains the risks and costs associated to the products.


If all of the ministerial approvals go through across the country, the amendments will come into force on May 31, 2013. We plan to publish a more comprehensive blog post at this time, along with changes to our scholarship plan section.


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