The Securities Commission has granted Veritas Asset Management Inc. and its associated alternative mutual funds (the Existing Alternative Fund and Future Alternative Funds) an exemption from the requirement under subsection 5.1(4) of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101). This requirement normally prohibits the consolidation of a simplified prospectus (SP) for an alternative mutual fund with the SP of a conventional mutual fund that is not an alternative mutual fund.
The exemption allows the SPs for the Alternative Funds to be combined with the SPs of conventional mutual funds (Veritas Funds) managed by the Filer, with the aim of reducing costs associated with renewal, printing, and related expenses. The consolidation is also intended to facilitate investor comparison and streamline disclosure across the Filer’s fund platform.
The decision was based on representations by the Filer that included their compliance with securities legislation, the operational and administrative similarities between the Alternative Funds and Veritas Funds, and the continued provision of fund facts documents to investors as required by law. The Filer also argued that mutual funds should not be treated differently from exchange-traded funds (ETFs), which are allowed to consolidate prospectuses for alternative and conventional funds under National Instrument 41-101 General Prospectus Requirements (NI 41-101).
The principal regulator, the Ontario Securities Commission, concluded that the exemption meets the test set out in the legislation and granted the Exemption Sought.