The Securities Commission has granted an exemption to Pembroke Private Wealth Management Ltd. (the Filer) on behalf of the Pembroke Dividend Growth Fund (the Fund) from certain provisions of the National Instrument 81-102 Investment Funds, National Instrument 81-101 Mutual Fund Prospectus Disclosure, and National Instrument 81-106 Investment Fund Continuous Disclosure. This exemption allows the Fund to include performance data in its sales communications, fund facts, and management reports of fund performance (MRFPs) for periods when the Fund was not a reporting issuer.
Key points of the decision include:
1. The Fund, an open-ended mutual fund trust, was previously distributing units on a prospectus-exempt basis and is transitioning to distribution under a simplified prospectus, which will make it a reporting issuer.
2. The Filer is registered as an investment fund manager and mutual fund dealer in multiple Canadian jurisdictions.
3. The Fund has complied with investment restrictions and practices, and has not paid management fees to the Filer, with fees paid directly by investors.
4. The exemption allows the Fund to present past performance data in sales communications and fund facts, which would otherwise be prohibited until the Fund had been a reporting issuer for 12 consecutive months.
5. The exemption also permits the inclusion of financial highlights and performance data in the Fund’s MRFPs for periods prior to it becoming a reporting issuer.
6. The exemption is contingent upon certain disclosures being made, including that the Fund was not a reporting issuer during the reported periods, that expenses may have been higher had it been a reporting issuer, and that financial statements for these periods are available upon request.
7. The Filer must post the Fund’s financial statements since its inception on the Fund’s website and make them available to investors upon request.
The decision is based on the belief that providing this historical performance data is meaningful for investors and does not detract from investor protection. The relevant legislative provisions underpinning the outcome include sections of National Instrument 81-102, 81-101, and 81-106, as well as the associated forms and instructions for fund facts and MRFPs.