Canada Life Investment Management Ltd. et al

2021-09-01 | Decision | 81-101 | Investment funds and structured products | https://www.osc.ca/en/securities-law/orders-rulings-decisions/canada-life-investment-management-ltd-et-al-0

National Instrument 81-101 Mutual Fund Prospectus Disclosure, ss. 2.1 and 6.1(1). National Instrument 81-102 Investment Funds, ss. 3.1, 15.1.1, 15.3(2), 15.6(1)(a)(i)(A), 15.6(1)(b), 15.6(1)(d)(i), 15.8(2)(a), 15.8(3)(a) and 15.9(2), 19.1(1). National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 4.4 and 17.1(1). Form 81-101F1 Contents of Simplified Prospectus, Items 5(b), 9.1(b) and 13.2 of Part B. Form 81-101F3 Contents of Fund Facts Document, Items 2, 3, 4 and 5 of Part I and Item 1.3 of Part II. Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance, Items 3.1(1), 3.1(7), 3.1(7.1), 3.1(8), 4.1(1), 4.1(2), 4.2(1), 4.2(2), 4.3(1)(a) and 4.3(1)(b) of Part B, and Items 3(1) and 4 of Part C.

The Securities Commission granted exemptions to new continuing funds from certain requirements of National Instruments 81-101, 81-102, and 81-106. These exemptions allow the funds to utilize the past performance, financial data, start dates, and fund expenses of corresponding existing funds in their sales communications, prospectuses, fund facts documents, and management reports. Additionally, the continuing funds are exempted from the seed capital requirements of NI 81-102.

The decision was made because the continuing funds have the same investment objectives, strategies, and fees as the existing funds and will hold the same assets and liabilities post-reorganization. The Commission recognized that the historical data of the existing funds is crucial for investors to make informed decisions and that the lack of such data for the new funds could be misleading.

The exemptions are subject to conditions, including that the continuing funds must disclose the reorganization and the use of existing funds’ data in their communications and reports. The decision supports a seamless transition for investors and avoids confusion by treating the continuing funds as fungible with the existing funds for the purposes of performance and financial data.

The legislative provisions underpinning the outcome include sections of National Instruments 81-101, 81-102, and 81-106, as well as Form 81-101F1, Form 81-101F3, and Form 81-106F1. The decision was made in accordance with the test set out in the applicable securities legislation.