The Securities Commission has granted exemptive relief to BT Global Growth Inc. (the Filer) and BT Global Growth Trust (the Initial Top Fund), along with any future non-reporting investment funds managed by the Filer or its affiliates (collectively, the Top Funds), from certain investment restrictions. This decision allows the Top Funds to invest in pooled funds (the Underlying Funds) under common management without breaching conflict of interest rules and self-dealing prohibitions, subject to conditions.
The relief is granted from the following provisions:
1. Securities Act (Ontario) restrictions that prevent an investment fund from investing in entities where it is a substantial securityholder or where its officers, directors, or substantial securityholders have a significant interest.
2. National Instrument 31-103 (NI 31-103) prohibitions against registered advisers causing investment portfolios they manage to purchase securities where a responsible person or their associate is a partner, officer, or director, without client disclosure and written consent.
The decision is based on representations from the Filer, including:
– The Filer’s registration and non-default status.
– The Filer’s role as manager and portfolio manager of the Top Funds and Underlying Funds.
– The structure and objectives of the Top Funds and Underlying Funds.
– The Fund-on-Fund Structure’s purpose to provide investors with indirect exposure to the Underlying Funds’ portfolios.
– The alignment of investments with the Top Funds’ objectives.
– The Top Funds’ distribution solely through prospectus exemptions.
– The Underlying Funds’ compliance with financial reporting and valuation practices.
The conditions for the relief include:
– Compatibility of investments with the Top Funds’ objectives.
– Objective pricing for investments in the Underlying Funds.
– Financial reporting by the Underlying Funds.
– Limitations on the Underlying Funds’ investments in other mutual funds.
– Prohibition of duplicative fees.
– Restrictions on voting securities of the Underlying Funds held by the Top Funds.
– Disclosure requirements to investors in the Top Funds.
The decision revokes and replaces previous relief granted to the Filer, expanding the scope to include the Related Issuer Relief and the Consent Relief. The Commission has determined that the relief meets the legislative test and is in the best interests of the Top Funds’ investors.