The Securities Commission has granted an exemption to a mutual fund management company from the standard fund facts document requirements. This exemption allows the company to provide specialized disclosure about their tiered management fee structure in their fund facts documents.
Key Facts:
– The company manages the EdgePoint Monthly Income Portfolio and future mutual funds with tiered pricing (collectively, the Funds).
– The Funds offer units with management fees that vary based on an interest index rate, recalculated at set intervals.
– The company sought to include additional information in the fund facts documents to explain the variable management fee structure.
Reasoning:
– The standard fund facts document format did not accommodate the detailed explanation of the tiered fee structure.
– The company argued that investors needed this information for full and transparent disclosure of the fee structure.
Outcome:
– The exemption was granted on the condition that the fund facts documents include the detailed tiered management fee disclosure.
Relevant Laws/Regulations:
– National Instrument 81-101 Mutual Fund Prospectus Disclosure, specifically section 2.1 and Form 81-101F3.
– The exemption was granted under the authority of the securities legislation of the principal regulator’s jurisdiction and is intended to be relied upon in other Canadian provinces and territories through Multilateral Instrument 11-102 Passport System.