Income trust guidelines set

The guidelines are designed to promote more consistent disclosure practices among income funds, especially in such areas as executive compensation and the statement of risk factors. Because income trusts are unique securities, they are not bound by some of the same rules governing conventional equities and debt securities…He added that investors should also receive adequate information about the risks associated with income trusts, and how future cash distributions could be negatively impacted.

The Globe and Mail
October 25, 2003

Income trust guidelines set
Sinclair Stewart

Securities regulators across Canada have developed a new set of guidelines aimed at improving the level of disclosure in the burgeoning income trust market.

The Canadian Securities Administrators, an umbrella group of 13 provincial and territorial commissions, unveiled the policy yesterday.

The group is inviting public comment for the next 60 days.

The guidelines are designed to promote more consistent disclosure practices among income funds, especially in such areas as executive compensation and the statement of risk factors.

Because income trusts are unique securities, they are not bound by some of the same rules governing conventional equities and debt securities.

Eric Pelletier, a spokesman at the Ontario Securities Commission, said regulators across the country began working on the policy some time ago when the income trust market began to soar in popularity with investors.

"When we get submissions of preliminary prospectuses, there has been some information that has not been properly prepared," he said, noting the area of executive compensation in particular.

He added that investors should also receive adequate information about the risks associated with income trusts, and how future cash distributions could be negatively impacted.


Risks: Income trusts, Ontario Securities Commission. Risk much higher for franchisee than independent business, Canada, 20031025 Income trust

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