The Securities Commission granted an exemption to mutual funds managed by the Filer from certain requirements of National Instrument 81-102 Investment Funds (NI 81-102) regarding sales communications. The exemption allows these funds to reference FundGrade A+ Awards, FundGrade Ratings, Lipper Awards, and Lipper Leader Ratings in their sales communications, which would otherwise be restricted under paragraphs 15.3(4)(c) and (f) of NI 81-102.
NI 81-102 typically requires that performance ratings or rankings in sales communications match the standard performance data periods and be current within specific time frames. However, the Filer sought relief from these requirements because the ratings and awards they wish to reference do not match the standard periods and are published annually, which would not comply with the usual time restrictions.
The exemption was granted under the condition that the sales communications comply with other parts of NI 81-102 and include specific disclosures, such as the award or rating name, the number of funds in the category, the ranking entity, the period the award or rating is based on, and a statement that ratings are subject to change monthly. Additionally, the referenced awards must not be more than 365 days old at the time of the communication, and the ratings must be based on performance comparisons within categories established by the Canadian Investment Funds Standards Committee (CIFSC) or its successor.
The decision was made under the authority of section 19.1 of NI 81-102 and is consistent with the test set out in the Legislation for the principal regulator to make such a decision. The exemption is intended to provide investors with valuable information while ensuring transparency and clarity in mutual fund sales communications.