The Securities Commission granted an exemption to a mutual fund from certain provisions of the National Instrument 81-102 Investment Funds, National Instrument 81-101 Mutual Fund Prospectus Disclosure, and National Instrument 81-106 Investment Fund Continuous Disclosure. This exemption allows the mutual fund to include performance data in its sales communications, fund facts, and management reports for periods prior to when the fund was a reporting issuer, despite not having distributed securities under a simplified prospectus for 12 consecutive months.
The exemption is contingent on the mutual fund providing disclosures that:
– It was not a reporting issuer during the period the data covers.
– Expenses would have been higher if it had been subject to reporting issuer requirements.
– Performance data for 10, 5, 3, and one-year periods are included.
Additionally, the mutual fund must disclose in its simplified prospectus that the management expense ratio (MER) is based on the last financial year when units were offered privately and that the MER may increase with the offering under the simplified prospectus. The fund’s financial statements since operations commenced must be posted on its website and made available upon request.
The decision is based on the fund’s compliance with investment restrictions and practices, its operational consistency, and the belief that past performance data is meaningful for investors. The exemption is granted under the conditions that it will not be detrimental to investor protection and that the fund will provide the necessary disclosures and access to financial statements.