The Securities Commission has granted an exemption to a fund from two requirements under National Instrument 81-102 Investment Funds (NI 81-102). The exemptions allow the fund to:
1. Appoint more than one custodian, specifically permitting the Bank of Montreal (BMO) to hold the fund’s physical gold bullion, diverging from subsection 6.1(1) which typically requires a single custodian.
2. Accept physical gold bullion as payment for units of the fund, deviating from subsection 9.4(2) which generally restricts subscription proceeds to cash or securities.
The exemptions are subject to conditions ensuring proper reconciliation and valuation of the fund’s assets, and that each custodian only handles the assets transferred to it. The decision is based on the fund’s operational needs, the specialized nature of storing bullion, and BMO’s qualifications as a custodian. The fund, managed by BMO Asset Management Inc., aims to provide exposure to the price of gold by holding most of its assets in bullion. The exemptions are contingent upon compliance with the conditions set out in paragraph 9.4(2)(b) of NI 81-102.