The Securities Commission granted CI Investments Inc. (CI) and its affiliates an exemption from certain provisions of National Instrument 31-103, which generally restricts a registered adviser from causing investment fund transactions between funds that the adviser manages. This exemption allows CI-managed funds, both public and private top funds, to make in-specie subscriptions to related private markets funds, transferring securities instead of cash as subscription payment.
The decision applies to existing public and private top funds and any future funds managed by CI. The exemption is subject to conditions, including approvals from independent review committees, adherence to valuation procedures, and compliance with investment objectives. The rationale behind the exemption is to enable efficient management and cost-effective investment strategies for the funds involved, increasing their asset base and potential for better economies of scale and diversification.
The decision is based on the understanding that the transactions will be in the best interests of the funds, will not involve any compensation for CI except for possible nominal administrative and trade execution charges, and will be recorded and kept for five years.
The relevant regulatory framework includes National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, particularly sections 13.5(2)(b)(ii) and (iii), and the decision-making process follows the guidelines of National Policy 11-203 and Multilateral Instrument 11-102. The decision was made considering the funds’ compliance with securities legislation, as well as CI’s status and registration as a portfolio manager, investment fund manager, and exempt market dealer across Canadian provinces and territories.