The Securities Commission granted BMO Investments Inc. (the Filer) an exemption for its existing and future investment funds from certain restrictions under National Instrument 81-102 Investment Funds (NI 81-102). Specifically, the exemption allows these funds to invest up to 10% of their net assets in securities of SICAV Funds governed by Luxembourg laws and UCITS Funds governed by the Central Bank of Ireland, despite these underlying funds not being subject to NI 81-102 or being reporting issuers in Canada.
Key Facts:
– The Filer is a subsidiary of the Bank of Montreal and manages various investment funds.
– The exemption applies to both existing and future funds managed by the Filer.
– The underlying foreign funds are subject to similar investment restrictions and disclosure requirements as the top funds.
Reasoning:
– The exemption is deemed to be in the best interests of the funds as it allows for diversification and cost-effective investment strategies.
– The underlying funds are regulated under robust frameworks similar to NI 81-102, ensuring investor protection.
Outcome:
– The exemption is granted with conditions, including that the underlying funds must qualify as UCITS and comply with UCITS Regulations.
– The funds must not invest more than 10% of their net assets in these underlying funds.
– The funds must cease investing in the underlying funds if their regulatory regime changes materially.
Relevant Laws:
– National Instrument 81-102 Investment Funds, sections 2.5(2)(a), 2.5(2)(a.1), 2.5(2)(c), and 19.1.
– National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.