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Total Cost Reporting: Is Your Firm Prepared?

Posted on Nov 12, 2025

Total cost reporting (TCR) is a Canadian regulatory initiative designed to give investors a complete, transparent view of all the costs they pay when investing in certain funds. Here is everything you need to know about TCR.

What Is Total Cost Reporting?

TCR requires the disclosure of all direct and embedded costs, not just transaction fees but also the ongoing costs built into the fund itself. These include management fees, operating expenses, and trading costs.

Disclosure will take place through enhanced Annual Reports on Charges and Compensation (ARCCs) and account statements, showing costs in both dollar and percentage terms for each investment. This initiative is designed to:

  • Improve fee transparency
  • Strengthen investor trust
  • Help investors make better-informed decisions

TCR does not change how fees are set or charged, only how they are disclosed and reported to investors.

How Did It Come About?

TCR builds on earlier reforms, including CRM2 (Client Relationship Model – Phase 2), which introduced detailed reporting on performance and certain client charges in 2016–2017.

The Canadian Securities Administrators (CSA), the Canadian Investment Regulatory Organization (CIRO), and the Canadian Council of Insurance Regulators (CCIR) jointly developed the new rules. Regulators announced TCR in April 2023 after extensively consulting with industry and investor advocacy groups.

Implementation begins in 2026, with the first new annual TCR reports required for the 2026 calendar year and delivered to investors in 2027.

Whom Does It Apply To?

The TCR applies based on the product and the registrants distributing those products. TCR requirements apply to:

  • Investment fund managers of publicly offered funds
  • Insurance companies for segregated funds
  • Dealers and advisers who must deliver ARCCs for covered products

Products In Scope

  • Mutual funds (prospectus)
  • Liquid alternative mutual funds (prospectus)
  • Exchange-traded funds (ETFs)
  • Scholarship plans
  • Split share funds
  • Closed-end funds (prospectus)
  • Foreign publicly offered funds
  • Segregated funds (insurance products)

Products Out of Scope (notification required)

  • Prospectus-exempt funds (e.g., private funds, pooled funds)
  • Labour-sponsored investment funds (LSIFs)
  • Most structured products

Dealers of out-of-scope products (prospectus-exempt, LSIFs, and most structured products) must notify investors that TCR reporting does not apply to their holdings, as required by regulation.

How Pinnacle Can Help You?

As a fund administrator, our team plays a critical role in supporting TCR compliance by:

  • Calculating daily fund expenses and converting them into standardized cost factors by fund, class, and series
  • Distributing cost data to dealers and other reporting parties through Fundserv, Fundata, or direct feeds
  • Aggregating and reconciling investor-level cost information
  • Maintaining robust data governance controls
  • Facilitating timely submissions to industry repositories

By serving as a reliable operational partner, we help investment fund managers and dealers meet their regulatory obligations, enhance transparency, and build trust with investors under the new TCR regime.

 

Conclusion

Preparing for Total Cost Reporting doesn’t have to be overwhelming. Our team can guide you through the transition, from data preparation to reporting, so you’re ready well ahead of the 2026 deadline.

Please reach out to Joanne Remillard at [email protected] to learn how we can support your TCR compliance needs.