The Securities Commission has granted the Fulcra Asset Management Inc. (the Filer) on behalf of the Fulcra Credit Opportunities Fund (the FCO Fund) and future alternative mutual funds managed by the Filer or its affiliates (collectively, the Funds) exemptions from certain requirements under National Instruments 81-102, 81-101, and 81-106. These exemptions allow the FCO Fund to include past performance data in sales communications, fund facts documents, and management reports of fund performance (MRFPs) even though this data relates to a period before the FCO Fund was a reporting issuer. Additionally, the FCO Fund is permitted to use past performance data to calculate its investment risk rating for its simplified prospectus.
The exemptions also allow the FCO Fund to process purchase and redemption orders on a monthly basis, rather than immediately after an order is received, as would normally be required. Furthermore, the Funds are exempt from the custodial requirement that limits the amount of portfolio assets that can be deposited with a borrowing agent in connection with short sales to 25% of the Fund’s net asset value (NAV).
The exemptions are contingent upon the FCO Fund disclosing that it was not a reporting issuer during the period the past performance data relates to, that its expenses would have been higher had it been a reporting issuer, and that the financial statements for the period are available on the FCO Fund’s website and upon request. The FCO Fund must also disclose its monthly processing frequency for purchase and redemption orders in its simplified prospectus and fund facts, and indicate that the fund is suitable for investors who can accept this frequency.
The decision is based on the FCO Fund’s compliance with investment restrictions and practices applicable to alternative mutual funds since its inception, the similarity in management before and after becoming a reporting issuer, and the belief that the past performance data is significant and meaningful information for investors. The exemptions are granted under the conditions that the FCO Fund complies with the disclosure requirements and maintains certain operational practices as specified in the decision.