The Securities Commission has granted mutual funds that are not reporting issuers an extension for filing and delivering their annual and interim financial statements. This decision allows these funds to file annual financial statements within 183 days of their financial year-end and interim statements within 90 days of their interim period-end. The relief is granted under National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) and is subject to several conditions, including the requirement that the funds primarily invest in Underlying Funds with later reporting deadlines and that they disclose the extended deadlines in their offering memorandum.
The rationale for this decision is based on the fact that the Top Funds invest the majority of their assets in Underlying Funds, which may have different financial year-ends and are subject to various financial reporting deadlines. This misalignment makes it challenging for the Top Funds to obtain the finalized financial statements of the Underlying Funds in time to meet the standard filing and delivery deadlines set by NI 81-106.
The conditions for the exemption include that the Top Funds must have a December 31 financial year-end, invest primarily in Underlying Funds with compatible investment objectives, and notify securityholders of the reliance on the exemption. Additionally, at least 25% of the Top Fund’s assets must be invested in entities with a December 31 financial year-end that are required to deliver their financial statements within the extended deadlines.
The exemption is granted on the basis that it meets the test set out in the Legislation and is conditional upon the Top Funds meeting the specified requirements. The relief will terminate within one year of any amendment to NI 81-106 or other rule that affects the filing and delivery deadlines for mutual funds.