ETF Facts: The plain-language 2-page pre-sale disclosure document required for ETF purchases, analogous to Fund Facts for mutual funds.

ETF Facts

The plain-language 2-page pre-sale disclosure document required for ETF purchases, analogous to Fund Facts for mutual funds.

Definition

ETF Facts is the mandatory disclosure document under NI 41-101 (as amended) for exchange-traded funds. Required content mirrors Fund Facts: fund overview, quick stats (MER, 12-month trading volume, NAV per unit), top holdings, 10-year performance chart, risk rating, and trading information specific to ETFs (premium/discount history, brokerage commissions, bid-ask spread). Unlike Fund Facts for mutual funds, ETF Facts must be delivered no later than midnight on the day of the trade (not before the trade), recognizing that ETF trades execute intraday at market prices rather than at end-of-day NAV. ETF Facts became a mandatory pre-trade disclosure effective September 1, 2019. Dealers who facilitate ETF purchases must ensure clients receive ETF Facts and document delivery. The document must reflect the ETF's most recent annual data.

Source

NI 41-101; Form 41-101F4 (ETF Facts); CSA Notice 41-308 (delivery rule)

Where this shows up on the CIRE

Outcome 5.1
Outcome 5.2

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1
Under UMIR, a registered trader at a CIRO marketplace participant enters a large buy order for a thinly traded security. The trader fragments the order into many small lots throughout the session to avoid triggering an uptick in the displayed quote. A colleague flags this as potentially problematic. Which UMIR concept is most relevant?
Outcome 5.1 · click for answer
A.Best execution, because the trader is failing to obtain the best available price.
B.Gatekeeper obligations, because the branch manager approved the order.
C.Manipulative and deceptive trading, because intentionally managing orders to affect the appearance of trading activity or price formation may constitute manipulation under UMIR.Correct
D.Short sale rules, because the order involves selling borrowed securities.
UMIR prohibits trading activity that creates a misleading appearance of trading activity or that manipulates the price of a security. Deliberately fragmenting orders to manage quote impact in a way designed to create a false impression of natural market activity can fall within UMIR's manipulation provisions. This is distinct from legitimate order management strategies because the intent is to avoid natural price discovery rather than to achieve best execution for a client.
2
A client places a limit order to buy 500 shares at $18.00. The current market is $18.20 bid and $18.35 ask. Under standard order-handling rules, what should happen to this order?
Outcome 5.2 · click for answer
A.The order should be rejected because the limit price is below the current ask.
B.The order should be immediately filled at the current ask price of $18.35 as a market order would be.
C.The order should be accepted and held in the order book until the ask price drops to $18.00 or below, at which point it may execute at the limit price or better.Correct
D.The order can only be filled if the bid price also falls to $18.00.
A limit buy order specifies the maximum price the client is willing to pay. Because the current ask of $18.35 exceeds the client's limit of $18.00, the order cannot execute immediately and is entered into the order book. It will execute when a seller is willing to sell at $18.00 or lower. A limit order does not convert to a market order, and it does not require the bid to reach $18.00, only a willing seller at or below that price.

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