Which instrument focuses on the disclosure of sales practices?

Which instrument focuses on the disclosure of sales practices?

• A. National Instrument 81-101
• B. National Instrument 81-102
• C. National Instrument 81-105
• D. National Instrument 81-106

Answer: (C)

The correct answer is that National Instrument 81-105 is specifically designed to focus on the disclosure of sales practices. This instrument provides guidelines and standards intended to ensure that all pertinent information regarding sales practices is disclosed to investors in a clear and transparent manner. By establishing these standards, it aims to protect investors by ensuring they have the necessary information to make informed decisions regarding their investments.

In this context, National Instrument 81-105 addresses concerns related to marketing materials, sales communications, and the appropriateness of sales practices. This ensures that investors are not misled and understand the potential risks and benefits of the products being offered.

The other national instruments mentioned, while they play important roles in the regulatory framework, relate to different aspects of investment fund practices and regulations. For instance, National Instrument 81-101 deals with mutual fund prospectus disclosure, focusing more on the content and disclosure requirements of prospectus documents. National Instrument 81-102 relates to mutual funds but mainly focuses on continuous disclosure and how mutual fund operations should be reported. National Instrument 81-106 is about investment fund continuous disclosure, emphasizing the ongoing reporting requirements for investment funds once they are operating.