The Securities Commission has approved a fund merger application submitted by 1832 Asset Management L.P. on behalf of Scotia CanAm Index Fund (Terminating Fund) to merge into Scotia U.S. Equity Index Fund (Continuing Fund). The approval is conditional on obtaining prior approval from the securityholders of the Terminating Fund.
The merger required approval because it did not meet all pre-approval criteria under section 5.6 of National Instrument 81-102 Investment Funds (NI 81-102), specifically the investment objectives of the funds may not be considered substantially similar. However, the merger complies with all other criteria for pre-approved reorganizations and transfers.
The merger is intended to be a tax-deferred exchange and will result in securityholders of the Terminating Fund receiving equivalent series of securities in the Continuing Fund. The merger is anticipated to provide benefits such as economies of scale, the resumption of contributions and purchases for securityholders, and a simplified index product lineup.
The Filer will bear all costs associated with the merger, and no fees will be charged to securityholders in connection with the merger. The merger is also subject to the review and positive recommendation of the independent review committee (IRC) as per National Instrument 81-107.
The decision was made under the securities legislation of Ontario, with the Ontario Securities Commission acting as the principal regulator. The Filer relied on Multilateral Instrument 11-102 Passport System for application in other Canadian provinces and territories. The merger is scheduled to occur on or about November 8, 2021, subject to securityholder approval at a special meeting to be held on or about October 28, 2021.