The OSC’s efforts in its OSC Consultation Paper 81-737 – Opportunity to Improve Retail Investor Access to Long-Term Assets through Investment Fund Product Structures to present a novel approach to fostering capital formation and access to long-term investment products are appreciated. In principle, this proposal could benefit retail investors as well as companies that are involved in real estate development, infrastructure, and other long-term projects. The viability of the proposal as currently drafted is in question due to missing:
- Incentives for institutional investors to serve as cornerstone investors in “collective investment vehicles” as contemplated.
- Demand among fund managers for the proposed structure fund.
In addition, it is unclear how the proposal will reduce the risks and information asymmetries for retail investors.
Finally, the proposal is limited to investors in Ontario. We encourage the OSC to consult further and more broadly and look forward to receiving further details. See our detailed response here.
