The Securities Commission has granted an investment fund managed by Forstrong Global Asset Management Inc. (the Filer) several exemptions from standard regulatory requirements under various National Instruments (NIs), subject to certain conditions. The exemptions are as follows:
1. **Prospectus Form Requirement (ETF Prospectus Form Requirement)**: The Filer is exempt from the requirement to use the prescribed form of prospectus for ETF securities, provided that it files a simplified prospectus in accordance with NI 81-101 and includes any additional disclosure required by Form 41-101F2 that is not contemplated by the simplified prospectus form. The Filer must also disclose information about this exemption in the simplified prospectus.
2. **Underwriter’s Certificate Relief**: The Filer and each Fund are exempt from the requirement to include an underwriter’s certificate in the Fund’s prospectus for ETF securities, recognizing that Authorized Dealers and Designated Brokers do not provide typical underwriting services, are not involved in prospectus preparation, do not perform due diligence, and do not receive fees or commissions for distributing ETF securities.
3. **Take-over Bid Relief**: Purchasers of ETF securities through the NEO Exchange or another marketplace in Canada are exempt from formal take-over bid requirements, acknowledging that it is difficult for securityholders to exercise control over the ETF, the number of outstanding ETF securities is always changing, and there is no incentive to acquire control due to pricing reflecting net asset value.
4. **Borrowing Relief**: Funds that are not alternative mutual funds are exempt from the borrowing restrictions in s. 2.6(1)(a)(i) of NI 81-102, allowing them to borrow cash from their custodian to fund distributions representing amounts owed but not yet received, up to five percent of the net assets of the fund, for a maximum of 45 days, and with appropriate disclosure of the borrowing in the fund’s prospectus.
5. **Sales and Redemptions Relief**: The Filer and each Fund are exempt from certain requirements in Parts 9, 10, and 14 of NI 81-102, enabling them to treat ETF securities and non-ETF mutual fund securities as if they were separate funds for compliance purposes, provided they adhere to the relevant parts of NI 81-102 for each type of security.
The principal regulator for this application is the British Columbia Securities Commission (BCSC), and the decision also represents the decision of the securities regulatory authority in Ontario. The exemptions are based on the representations made by the Filer and are subject to compliance with specific conditions set out by the Securities Commission.