Sep 24, 2026
On October 1, 2026, a rule change closes one of the last remaining ways Canadian mutual fund investors could be charged just to sell their own units — but not every legacy fee disappears that day.
A new provision added to National Instrument 81-102 Investment Funds bars a fund manager from charging a securityholder a fee to redeem mutual fund units. The change, published in the Ontario Securities Commission (OSC) Bulletin on August 20, 2026, is mirrored by securities regulators across every Canadian province and territory, with a slightly different timing rule in Saskatchewan. For years, this kind of charge — commonly tied to a deferred sales charge (DSC) purchase — locked investors into a fund for years at a time or forced them to pay a penalty to leave early.
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The catch: The ban does not erase every existing fee. If you bought a fund under a DSC-style arrangement that was already in place before June 1, 2022, and it’s still running, your fund manager can keep charging you when you cash out. Here’s what’s changing, who’s still exposed and how to check your own account.
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What’s actually changing on October 1
The new provision, section 10.2.1, stops fund managers from charging a redemption fee tied to the sales-charge option an investor picked when they bought in. It doesn’t add new disclosure requirements or touch any other part of the rule — it’s a narrow, targeted ban.
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Why your fund might still charge an exit fee
This isn’t the industry’s first run at DSC fees. Canadian securities regulators barred fund companies from selling new DSC funds starting June 1, 2022, cutting off the upfront commissions that gave advisors a financial incentive to sell them in the first place. Existing DSC schedules were allowed to run their course rather than being cancelled outright.
That’s the gap the October 1 rule closes only partway. Section 10.2.1 exempts any fee arrangement that existed before June 1, 2022 and remains in effect. In plain terms: if you bought a DSC fund before June 2022 and your redemption schedule — typically 5 to 7 years — hasn’t expired, you can likely still be charged to sell before it does.
What the ban doesn’t cover
The new rule targets sales-charge redemption fees specifically. It does not affect fees a fund charges for short-term trading or unusually large redemption orders, which fund companies can continue to apply regardless of the October 1 change. Advisors, meanwhile, are being told to review client holdings fund by fund, since the ban applies at the fund level rather than the account level — meaning two people who each hold mutual funds through the same advisor could face very different answers.
How to check if you’re affected
- Pull your account statement or fund fact sheet and look for “DSC,” “deferred sales charge” or “redemption fee”
- Check the purchase date — if it’s before June 1, 2022, you may still be inside a legacy redemption schedule
- Ask your advisor or fund company directly when your specific schedule ends — don’t assume October 1 zeroes it out
- Budget for short-term trading fees separately if you plan to buy and sell within a short window, since those remain legal
- Get the answer in writing before you redeem, especially on larger accounts where a percentage-based fee adds up fast
The bottom line
The mutual fund industry has been shedding DSC-style fees since 2022, and October 1 removes most of what’s left. But for Canadians who bought in before that cutoff, the redemption clock hasn’t necessarily reset.
Before assuming the new rule wipes your exit fee clean, find your fund’s purchase date and ask your advisor plainly: Is my redemption schedule still running, and when does it end? That answer, not the date on a new regulation, is what determines what selling will actually cost you.
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Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors.
