CIFSC Completes Launch of New Fund Classifications

The Canadian Investment Funds Standards Committee (CIFSC) today confirmed the completion of its launch of an updated and more consumer-friendly classification system for Canadian investment funds. All CIFSC member data provider firms have now synchronized their databases to incorporate funds into their new categories.

Since its release of the proposed new system in May, CIFSC data provider members have been programming the new thresholds and category definitions into their databases, and have been testing the results for accuracy. A preliminary list of funds that were slated to be re-categorized under the new definitions was provided to all fund managers on July 24. Some feedback was received on the reclassifications, largely to provide additional fund and holdings data that had not previously been provided to the data providers.

“We believe the new system represents a significant improvement in the Committee’s process, especially in terms of transparency, comparability and objectivity” said CIFSC Chair Ralf Hensel. “The new process we have implemented is very much a success, and will assist industry participants, both manufacturers in terms of classification comparability, and investors in terms of achieving diversification in their portfolios. The new system was implemented to meet several new challenges facing the fund industry, including the increasing numbers and varieties of funds, the elimination of the limit on foreign content and the introduction of the unit trust category in the TSX.”

In addition to the flowchart that graphically explains the Committee’s classification process and the definitions that detail the tests applied for each category, CIFSC has also posted a policies and procedures document that provides more information on the Committee’s operations. These materials, as well as the lists of funds classified in each category, are available on the CIFSC website (http://www.cifsc.org). An enhanced search feature enables visitors to quickly locate funds.

The Committee will be conducting full category reviews each quarter, with the first such review to take place at the end of September. As well, the Committee is developing a French-language version of its categories and definitions which is expected to be available on the website shortly. The Committee appreciates that the fund classification system is a dynamic process, and that further refinements will be required based on its continuous monitoring system and additional feedback from industry participants.

CIFSC is a volunteer organization, made up of competing, yet collaborative organizations, committed to the goal of a single, objective and standardized investment fund classification system for use across Canada. Its current membership includes representatives from Canadian Life and Health Insurance Association, Cannex Financial Exchanges, FP Datagroup, Fundata Canada, The Globe and Mail, IFIC, Lipper and individual consultants.

For further information, contact:
Ralf Hensel, Chair of CIFSC,
416-363-2150 ext. 254

For comments on the new categories or other matters, the committee can be reached via email at http://www.cifsc.org/contact/


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