THE 360 NEWSLETTER

It's now official: effective June 1, 2023, it will no longer be possible to purchase deferred sales charge (DSC) or low sales charge (LSC/LL) segregated funds. All provincial regulators have adopted a ban on DSC for segregated funds. This is the same decision as the one made on June 1, 2022, which saw the elimination of DSC/LSC on mutual funds.

This means that fund companies/insurance carriers will no longer be allowed to pay commissions to dealers when purchasing deferred sales charge or low sales charge funds. Several fund companies/insurance carriers have already decided to stop offering these funds to new purchases before the June 1, 2023, deadline. Both Sun Life and CI will stop offering these funds as of April 24, 2023.

How will these funds be banned or converted?

Effective June 1, 2023, all deferred sales charge (DSC) and low sales charge (LSC) segregated funds will be closed to new purchases and systematic purchase plans (PAC). Only outgoing redemptions or transfers out will be accepted. Switches between DSC/LSC funds, where applicable, may be allowed in cases where the DSC schedule still exists. Please contact the fund company/insurance carrier to confirm before proceeding with any switches.

Unfortunately, fund companies/insurance carriers are closing DSC/LSC purchases on different dates. As such, we ask that you please pay close attention to all fund company/insurance carrier communications pertaining to this matter. 

Changes to systematics instructions (PAC)

Please note that changes from DSC/LSC funds to FEL funds must be made before June 1, 2023.

Client-name accounts:

Fund companies/insurance carriers will arrange for an automatic conversion from the DSC/LSC funds to the front-end option of the same fund.

Investia nominee accounts:

• You are currently being asked to review the list of your clients’ active PACs in their nominee accounts and make changes from DSC/LSC funds to a FEL funds.
• Note that for fund companies/insurance carriers that are making changes prior to the June 1 date, if the change has not been made on your end, the PAC for the DSC/LSC fund will be rejected. You will be notified of this rejection, and then you will have to change the fund and repurchase in the new FEL fund.
• A conversion from all DSC/LSC funds to the corresponding FEL funds will be performed manually at the end of May for all remaining DSC funds available in systematic purchase plans in your clients’ Investia nominee accounts.

Generating a list of clients with PACs in Univeris

To facilitate this transition, you can obtain a list of your clients with PACs in Univeris under Reports / Management / Marketing / Client PAC/AWD Account Register.

Selection criteria:

• Type: PAC
• Frequency: All
• Status: Internal Active 

Output option – Format:

• PDF: Client PAC/AWD Account Register Report
• Excel: Client PAC/AWD Account Register Report – Comma-separated values (CSV)

In the meantime, should fund companies/insurance carriers decide to discontinue PACs in these DSC/LSC funds prior to the scheduled June 1 date, we suggest that you regularly monitor the transaction rejections that may occur in your clients’ PACs in client-name and Investia nominee accounts.

Should you have any questions, please contact our Client Services Team, by email at investia@investia.ca, by phone at 1-888-684-5548, or use the chatbot feature available on the Advisor Centre.