The Securities Commission granted an exemption to an alternative mutual fund, allowing it to include past performance data from a period when its securities were offered on a prospectus-exempt basis in its sales communications, simplified prospectus, fund facts documents, and annual and interim management reports of fund performance. This decision was made under various sections of National Instruments 81-102, 81-101, and 81-106, which generally restrict the use of past performance data to periods where securities were distributed under a simplified prospectus and for at least 12 consecutive months.
The fund, managed by Kingwest & Company, has been operating since 1995 and intends to offer its units publicly in Ontario. The exemption was granted on the condition that the fund’s management after becoming a reporting issuer remains substantially similar to its management prior to that status, with similar fee structures and no significant increase in the management expense ratio.
The exemption is subject to the fund disclosing that it was not a reporting issuer during the referenced period, that expenses would have been higher had it been a reporting issuer, that exemptive relief was obtained for the disclosure, and that financial statements for the period are available on the fund’s website and upon request.
The decision is based on the rationale that the past performance data and financial data are significant and meaningful to both existing and prospective investors, and that the fund has been managed in compliance with mutual fund regulations since its inception.