Regulatory Alerts2025-04-16
Added · Updated
CSA Staff Notice 81-338: Guidance on the Use of Discretion under the CSA Investment Risk Classification Methodology
The Canadian Securities Administrators (CSA) issued Staff Notice 81-338 to provide guidance on the use of discretion within the CSA investment risk classification methodology for investment fund managers (IFMs). This guidance clarifies that while IFMs cannot use discretion to lower a fund's investment risk level below the standard deviation calculation, they are permitted and encouraged to use discretion to classify a fund at a higher risk level when reasonable, requiring documented justification. The CSA strongly encourages all IFMs to adopt robust policies and procedures to determine appropriate circumstances for exercising such discretion, ensuring consistency and compliance with existing securities regulatory requirements.