The Securities Commission granted exemptive relief to Waypoint Investment Partners Inc. (the Filer) and the Top Funds from certain conflict of interest investment restrictions and reporting requirements under the Securities Act (Ontario) and National Instrument 31-103. This relief allows public and private investment funds managed by the Filer to invest in related underlying investments that are not reporting issuers, subject to conditions.
Key points include:
1. Public Top Funds are permitted to invest in related Underlying Pooled Funds not subject to NI 81-102 and not reporting issuers.
2. Top Funds can invest in Underlying Private Issuers where the Filer or its associates have a significant interest, without being considered substantial security holders.
3. The Filer is exempt from the requirement to obtain client consent before investing in securities where a responsible person or associate is a partner, officer, or director.
4. The Filer is relieved from the obligation to file a report for every transaction involving related persons or companies.
5. The Filer can continue investing in a special purpose vehicle (SPV) by way of loans, despite the SPV becoming an associate of the Filer’s portfolio advisor due to an acquisition.
Conditions for the relief include:
– Investments must align with the Top Funds’ investment objectives and strategies.
– No management, sales, or redemption fees that duplicate fees paid by the Underlying Investments.
– The Filer will not vote the securities held by the Top Funds in the Underlying Investments, except as directed by the beneficial owners.
– Disclosure of potential conflicts of interest and the relationship between the Top Funds and the Underlying Investments in offering documents.
– Independent Review Committee (IRC) approval for transactions involving the Underlying Investments.
– Investments in Underlying Investments must be at an objective price, typically the NAV.
– Public Top Funds must disclose investments in Underlying Investments in their quarterly portfolio holding reports, financial statements, and fund facts documents.
The decision is based on the belief that these investments will provide efficient and cost-effective portfolio diversification and access to non-traditional asset classes. The relief is granted under the Securities Act, R.S.O. 1990, c. S.5, as amended, National Instrument 31-103, and National Instrument 81-102, subject to the conditions outlined to ensure investor protection and transparency.