The Securities Commission has granted exemptive relief to Mackenzie Financial Corporation (the Filer) on behalf of Mackenzie Global Credit Opportunities Fund (the Terminating Fund) for a proposed merger with Mackenzie North American Corporate Bond Fund (the Continuing Fund). The relief is from certain seed capital requirements under National Instrument 81-102 Investment Funds (NI 81-102), and from requirements under National Instrument 81-101 Mutual Fund Prospectus Disclosure and National Instrument 81-106 Investment Fund Continuous Disclosure to allow the use of performance data from the existing funds in the new continuing funds’ documents.
The merger did not meet all pre-approved reorganization criteria under section 5.1 of NI 81-102, specifically regarding the similarity of investment objectives, tax-deferred transaction requirements, and the inclusion of the most recent fund facts documents. However, the merger complied with other pre-approved criteria under section 5.6 of NI 81-102.
The Filer, a registered investment fund manager, portfolio manager, exempt market dealer, adviser, and commodity trading manager, manages the Funds, which are reporting issuers and not in default of securities legislation. The Funds follow standard investment restrictions and practices, except where exempted, and their units are qualified for sale under current Offering Documents, with some series offered on an exempt distribution basis.
The Independent Review Committee (IRC) provided a positive recommendation for the merger, determining it would achieve a fair and reasonable result for the Funds and their unitholders. The merger will be effected on a taxable basis to preserve any unused tax losses of the Continuing Fund.
Unitholders of the Terminating Fund will vote on the merger at a special meeting. If approved, systematic plans will be re-established in the Continuing Fund, and unitholders have the right to redeem or exchange their units until the business day before the Effective Date. No sales charges will be incurred for the acquisition of the Terminating Fund’s portfolio by the Continuing Fund.
The merger is considered beneficial for unitholders due to efficient use of investment managers, streamlined similar mandates, continued access to the same investment management team, and same or lower fees for the Continuing Fund.
The Commission’s decision is contingent upon the Filer obtaining prior approval from the unitholders of the Terminating Fund at the special meeting.