The Ontario Securities Commission granted relief to Durham Asset Management Inc. (the Filer), manager of the DAMI Corporate Bond Fund (the Fund), extending the time limit for the distribution of the Fund’s securities under its existing simplified prospectus by 137 days. This decision was made under section 147 of the Securities Act (Ontario) due to an administrative oversight that led to the Fund’s failure to file a pro forma prospectus within the required timeframe, causing the prospectus to lapse.
The Fund, an open-ended mutual fund trust in Ontario and a reporting issuer, had its prospectus lapse on June 15, 2022. Despite the lapse, the Fund continued to sell units until August 25, 2022, when sales were suspended. During this period, the Fund sold units valued at $157,000. The Filer intends to file a renewal prospectus by October 29, 2022.
The Commission determined that granting the exemption would not compromise the accuracy of the information in the current prospectus or the public interest, as there have been no material changes in the Fund’s affairs since the prospectus’s date. The exemption is conditional upon providing a 90-day cancellation right to investors who purchased units during the interim period. These investors must be informed of their rights and receive a refund of their purchase price and related fees if they choose to cancel their trades. If the net asset value per security is lower at the time of cancellation than at purchase, the Filer must reimburse the Fund for the difference.
The decision was made on September 13, 2022, ensuring that the Fund could continue distributing its securities under the current prospectus until the renewal prospectus is receipted, provided the conditions outlined are met.