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SLGI Asset Management Inc. et al.

2022-06-30 | Decision | Securities Act, 31-103 | Investment funds and structured products | https://www.osc.ca/en/securities-law/orders-rulings-decisions/slgi-asset-management-inc-et-al

: Securities Act (Ontario), R.S.O. 1990, c. S.5, as am., ss. 111(2)(b), 111(2)(c), 111(4), 113, 117(1) and 117(2). National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 13.5(2)(a) and 15.1. National Instrument 81-102 Investment Funds, ss. 2.5(2)(a), 2.5(2)(c) and 19.1.


The Securities Commission granted exemptive relief to SLGI Asset Management Inc. (SLGI), Sun Life Capital Management (Canada) Inc. (SLC), and their affiliated funds (collectively, the Filers) from certain conflict of interest investment restrictions and reporting requirements under the Securities Act (Ontario) and National Instrument 31-103, as well as from self-dealing restrictions. This relief allows public and private investment funds managed by the Filers to invest in related underlying investments that are not reporting issuers.

Key points of the decision include:

1. Relief from the prohibition against an investment fund becoming a substantial securityholder in a related person or company, or investing in an issuer where an officer, director, or substantial securityholder of the fund has a significant interest.

2. Exemption from the requirement for registered advisers to disclose to clients and obtain their written consent before investing in securities of issuers where a responsible person or associate is a partner, officer, or director.

3. Relief from the obligation to report every transaction of purchase or sale of securities with any related person or company.

4. Permission for public investment funds to invest in related underlying private funds that are not reporting issuers and not subject to National Instrument 81-102.

The relief is subject to several conditions, including compatibility of investments with the funds’ objectives, compliance with illiquid asset restrictions, no duplication of fees, and disclosure to investors. The funds must also adhere to certain investment limits and obtain approval from their independent review committees for such investments.

The decision is based on the understanding that these investments will provide efficient and cost-effective portfolio diversification, and that the funds will gain access to the investment expertise and strategies of the underlying investments’ managers. The relief is granted with the expectation that the investments will be made in the best interests of the funds and their investors.