The Ontario Securities Commission granted mutual funds managed by Capital International Asset Management (Canada), Inc. an exemption from the requirement to provide 60 days’ prior notice to securityholders before engaging in securities lending, repurchase, and reverse repurchase transactions. This decision is based on National Instrument 81-102 Investment Funds (NI 81-102), specifically section 2.17(1)(c), which normally mandates such notice.
The exemption was sought because the funds’ prospectuses had erroneously included the 60-day notice requirement due to an oversight in the drafting process, despite the fact that the funds could have relied on section 2.17(3) of NI 81-102, which waives this requirement if the prospectus since inception contains the necessary disclosures.
The cost of mailing notices was deemed significant and not beneficial to securityholders, given that the prospectuses had already disclosed the transactions and related risks. The exemption aligns with efforts to reduce regulatory burdens without compromising investor protection.
Instead of the 60-day notice, the funds will issue a press release at least 60 days before commencing such transactions, directing investors to the prospectus for more information. This press release will be posted on the funds’ website and filed on SEDAR.
The exemption is conditional upon the issuance of the press release and is supported by the updated disclosure in the funds’ renewal simplified prospectus dated May 26, 2023.