The Securities Commission has granted an exemption to a group of mutual funds, collectively referred to as the Top Funds, managed by ATB Investment Management Inc. This exemption allows the Top Funds to retain their existing investments in the BlackRock CDN US Equity Index Fund (Underlying Pooled Fund), which is not a reporting issuer and therefore not subject to certain regulations that typically apply to investments made by mutual funds.
The exemption was sought because the Top Funds have unrealized capital gains in the Underlying Pooled Fund and wish to avoid triggering taxable events and incurring costs associated with selling and reinvesting these assets. The Top Funds will not make additional investments in the Underlying Pooled Fund but may continue to hold their current investments until it is deemed in their best interest to sell.
The decision is based on the condition that the Top Funds comply with the investment objectives and strategies and provide full disclosure as required for mutual funds investing in other funds. Additionally, the Top Funds must dispose of their investments in the Underlying Pooled Fund if it ceases to comply with certain parts of NI 81-102 or NI 81-106, which govern investment funds and their continuous disclosure requirements.
The exemption is granted under the authority of National Instrument 81-102 Investment Funds, specifically paragraphs 2.5(2)(a) and 2.5(2)(c), and is subject to the conditions outlined above. The decision was made by the Alberta Securities Commission, acting as the principal regulator, and is also recognized by the securities regulatory authority in Ontario.