Ontario regulator ends mutual fund redemption fees

The new rule’s details

The amendment adds section 10.2.1, titled “Prohibition of Fees for Redemptions.” It prevents fund managers from charging securityholders any fee linked to redeeming mutual fund units. The ban begins on October 1, 2026, though Saskatchewan will enforce it only after filing the instrument with its Registrar of Regulations.

One exception exists. Fees tied to arrangements established before June 1, 2022 can continue even after the broader ban takes effect. Any agreements made on or after that date do not qualify for the exemption.

Steps for fund managers

The deadline leaves managers with little time to act. They must review their fund lineup for redemption fees. Only those connected to pre-June 2022 agreements may remain. All others must be removed by October 1, or earlier if firms prefer to avoid last-minute changes.

The rule applies to the fund, not individual accounts. Advisors will need to identify which client holdings still include these fees and whether they meet the legacy exemption. Some charges will vanish; others may persist under the transition rule.

What remains unchanged

The amendment is narrow. It introduces the new section, the June 2022 cutoff, and the October 2026 effective date. No other parts of NI 81-102 are modified, and there are no new disclosure requirements for fund managers or advisors.

For investors, the change eliminates one potential surprise when selling fund units. However, it does not affect other fees, such as management expenses or sales charges, which stay the same.

The full text of the amendments is available on the OSC’s website.