The Securities Commission has granted Nicola Wealth Management Ltd. (the Filer) an exemption from certain self-dealing restrictions under sections 13.5(2)(b)(ii) and (iii) of National Instrument 31-103. This exemption allows the Filer to conduct inter-fund trades involving mortgages and securities issued by alternative asset funds between its managed pooled funds and discretionary managed accounts, as well as in-specie subscriptions and redemptions involving these accounts and funds.
The exemption is subject to several conditions, including consistency with investment objectives, obtaining independent valuations for mortgages and securities of alternative asset funds, and approval from an independent review committee (IRC). The Filer must also ensure that the only costs associated with these trades are nominal administrative charges and any necessary transfer costs.
The decision is based on the Filer’s representations that such trades would be in the best interests of the pooled funds and managed accounts, providing benefits such as quicker execution, better liquidity, and access to limited investment opportunities. The exemption is intended to facilitate efficient portfolio management while maintaining investor protection through independent valuation and oversight.
The British Columbia Securities Commission is the principal regulator for this application, and the decision also applies to Ontario by virtue of the Passport System under Multilateral Instrument 11-102.