The Securities Commission has granted an exemption to a mutual fund manager (the Filer) from certain requirements of National Instrument 81-102 Investment Funds (NI 81-102) regarding the use of performance ratings and awards in sales communications. Specifically, the Filer sought relief from paragraphs 15.3(4)(c) and (f) of NI 81-102, which restrict the reference to performance ratings or rankings in sales communications unless they match the standard performance data periods and are within certain time frames from the rating date.
The exemption allows the Filer to reference FundGrade A+ Awards, FundGrade Ratings, Lipper Awards, and Lipper Leader Ratings in sales communications for their mutual funds, subject to conditions. These conditions include providing specific disclosures about the awards or ratings, ensuring that the referenced awards have not been given more than 365 days prior to the sales communication, and that the ratings are based on comparisons within categories established by the Canadian Investment Funds Standards Committee (CIFSC) or its successor.
The decision is based on the view that these ratings and awards provide valuable, objective insights to investors and are not misleading. The exemption is granted under section 19.1 of NI 81-102, facilitated by the passport application process outlined in Multilateral Instrument 11-102 Passport System, with the Ontario Securities Commission acting as the principal regulator. The exemption is subject to the conditions outlined to ensure compliance with the spirit of NI 81-102 and investor protection.