The Securities Commission granted an exemption to Counsel Portfolio Services Inc. from certain requirements of National Instrument 81-102 Investment Funds (NI 81-102), specifically paragraphs 15.3(4)(c) and (f). This exemption allows the company to reference FundGrade A+ Awards, FundGrade Ratings, Lipper Awards, and Lipper Leader Ratings in sales communications for their mutual funds.
The key reasons for the exemption include the recognition that these awards and ratings provide valuable, objective insights to investors, and that the standard requirements of NI 81-102 would unduly restrict the company’s ability to communicate this information. The standard requirements would normally necessitate performance ratings to match specific time periods and be published within a certain timeframe relative to the calendar month end to which they apply.
The exemption is subject to conditions ensuring that the sales communications comply with other parts of NI 81-102 and include clear disclosure of the award or rating details, such as the category, number of funds in the category, the ranking entity, the period the rating or award is based on, and a statement that ratings are subject to change monthly. Additionally, the referenced awards must not be more than 365 days old at the time of the sales communication, and the ratings must be based on performance comparisons within categories established by the Canadian Investment Funds Standards Committee (CIFSC) or its successor.
This decision is underpinned by the authority granted to the Securities Commission by section 19.1 of NI 81-102 to exempt parties from certain requirements when it is deemed not to be prejudicial to the public interest.