The Securities Commission granted Canoe Financial LP and its managed mutual funds (the Funds) an exemption from certain derivative cover requirements under National Instrument 81-102 Investment Funds (NI 81-102). The exemption allows the Funds to:
1. Substitute currency, interest rate, or duration risks without increasing overall risk or leverage.
2. Create synthetic short positions up to 20% of the fund’s net asset value.
3. Adjust currency exposure without exceeding the fund’s net asset value.
Key conditions include maintaining adequate cash cover, monitoring aggregate exposures, and ensuring compliance with the Funds’ investment objectives and strategies. This decision aligns with the regulatory framework to prevent leveraging and manage risks effectively. The exemption is deemed in the best interest of the Funds and not prejudicial to the public interest.
Relevant legislative provisions include sections 2.8(1)(d), 2.8(1)(e), 2.8(1)(f), and 19.1 of NI 81-102.