What does National Instrument 81-102 regulate?

• A. Rules on advertising and sales content
• B. Rules on financial reporting requirements
• C. Rules on trading strategy disclosures
• D. Rules on risk management practices

Answer: (A)

National Instrument 81-102 primarily regulates mutual funds and their management in Canada. It establishes rules concerning how mutual funds can operate, including guidelines on advertising and sales content. This means that it sets out clear expectations on what information can be presented to investors and ensures that all communications are fair, clear, and not misleading. By focusing on advertising and sales, the instrument helps to protect investors by ensuring that they receive accurate and comprehensive information about the mutual funds being offered, enabling them to make informed investment decisions.

The other options, although related to financial practices, do not accurately reflect the specific regulations provided under National Instrument 81-102. It does not focus specifically on financial reporting requirements or trading strategy disclosures, nor does it deal with risk management practices in the same prescribed manner as it does with advertising and sales content within mutual funds.