The Securities Commission has granted alternative mutual funds an exemption from certain requirements of National Instrument 81-102 Investment Funds (NI 81-102) and related disclosure obligations under National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101). The key points of the decision are as follows:
1. **Value at Risk (VaR) Usage**: The funds are allowed to use VaR, limited to 20% of their net asset value (NAV), to calculate exposure instead of adhering to the standard limit of 300% of the fund’s NAV for aggregate exposure to cash borrowing, short selling, and specified derivatives transactions.
2. **Disclosure Requirements**: The funds are exempt from disclosing their maximum aggregate exposure to leverage as calculated under Section 2.9.1 of NI 81-102 in their Fund Facts Document and Simplified Prospectus.
3. **Performance Data**: The funds can include past performance data in their sales communications and disclosure documents, even for periods when they were not reporting issuers, subject to certain conditions.
4. **Risk Level Calculation**: The funds are permitted to use past performance data to calculate the investment risk level and disclose this in the Fund Facts and ETF Facts documents.
5. **Conditions**: The exemptions are subject to several conditions, including the establishment of a derivatives risk management program, third-party verification of VaR calculations, and specific reporting and notification requirements to the Securities Commission.
6. **Expiration**: The decision expires on February 22, 2027.
The decision is based on the reasoning that VaR is a more appropriate measure of risk for these funds compared to the notional exposure limits. The exemptions are intended to provide investors with access to products that may offer diversified holdings and potentially superior non-correlated returns. The decision is made under the authority of various sections of NI 81-102 and NI 81-101, as well as the Process for Exemptive Relief Applications in Multiple Jurisdictions.