The Securities Commission granted an exemption to mutual funds managed by 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. The exemption allows the funds to reference FundGrade A+ Awards, FundGrade Ratings, Lipper Awards, and Lipper Leader Ratings in their sales communications, subject to conditions ensuring transparency and relevance.
Key points of the decision include:
1. The Filer, as the investment fund manager, 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 specific time periods and are published within certain timeframes.
2. The exemption was necessary because the ratings and awards in question do not match the standard performance data periods required by NI 81-102, and the timeframes for publication would limit their use in communications.
3. The Ontario Securities Commission, acting as the principal regulator, agreed to grant the exemption, provided that the sales communications meet all other requirements of Part 15 of NI 81-102 and include specific disclosures, such as the category of the award, the number of funds in the category, the name of the ranking entity, and the period on which the rating or award is based.
4. The exemption also stipulates that the awards being referenced must not have been awarded more than 365 days before the date of the sales communication and that the ratings and awards must be based on performance comparisons within categories established by the Canadian Investment Funds Standards Committee (CIFSC) or its successor.
The decision supports the provision of useful information to investors while ensuring that the information is presented in a clear and not misleading manner, in line with the objectives of NI 81-102.