The Securities Commission granted an exemption to a prospectus-qualified alternative mutual fund, allowing it to include past performance data from a period when the fund’s securities were distributed on a prospectus-exempt basis in its sales communications and to use this data to calculate its investment risk level. This exemption applies to various sections of National Instrument 81-102 Investment Funds, National Instrument 81-101 Mutual Fund Prospectus Disclosure, and National Instrument 81-106 Investment Fund Continuous Disclosure.
The fund, managed similarly before and after becoming a reporting issuer, with a comparable fee and expense structure, can now present past performance in sales communications, simplified prospectuses, fund facts documents, and annual and interim management reports of fund performance.
The exemption is contingent on the fund disclosing that it was not a reporting issuer during the referenced period, that expenses would have been higher if it had been, that exemptive relief was granted 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 fund’s compliance with investment restrictions and practices, and the expectation that becoming a reporting issuer will not significantly change its management or increase its management expense ratio.