The Securities Commission granted an exemption to investment funds managed by CIBC Asset Management Inc. (CAMI) and its affiliates, collectively referred to as the Filer, allowing them to invest in certain non-reporting underlying investment funds, which are also managed by the Filer. This decision applies to existing and future investment funds that are reporting issuers and subject to National Instrument 81-102 Investment Funds (NI 81-102) and National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107), known as the Top Funds.
The exemption was sought from two prohibitions in NI 81-102: section 2.5(2)(a), which restricts investment funds from purchasing or holding securities of other investment funds unless certain conditions are met, and section 2.5(2)(c), which prohibits investment funds from holding securities of other investment funds that are not reporting issuers.
The decision was based on several conditions, including that the investments are compatible with the Top Funds’ objectives, no management or incentive fees that duplicate fees paid by the underlying funds will be charged, and that the Top Funds will not actively participate in the business or operations of the underlying funds. Additionally, investments must be made at the net asset value (NAV) determined by an independent third party, and the Filer must obtain approval from the independent review committee (IRC) before making such investments.
The outcome allows the Top Funds to pursue portfolio diversification efficiently and cost-effectively by investing in the underlying funds, which include the CIBC Long Term Private Debt Pool and CIBC Short Term Private Debt Pool, among potential future funds. These underlying funds focus on private debt investments and are structured as trusts or other entities not subject to NI 81-102 or NI 81-107.
The exemption is conditional upon adherence to specific requirements aimed at ensuring fair treatment of the Top Funds and transparency for investors. The decision underscores the Commission’s willingness to provide flexibility within the regulatory framework to facilitate efficient fund management, provided that investor protection measures are maintained.