The Securities Commission has granted an alternative mutual fund exemption from certain restrictions under National Instrument 81-102 Investment Funds (NI 81-102). The fund sought to exceed the standard 50% of net asset value (NAV) limit on short selling and cash borrowing, aiming to reach up to 100% of its NAV for these activities. The exemption is contingent on the fund adhering to a total leverage limit of 300% of its NAV when combining short selling, cash borrowing, and specified derivatives transactions.
The fund must still comply with other requirements of NI 81-102 related to short selling and cash borrowing, ensure consistency with its investment objectives and strategies, and disclose the terms of the exemption in its investor materials. If the exemption materially changes the fund’s risk rating, the fund will follow applicable securities legislation requirements.
This decision revokes a prior order and includes the Pender Alternative Absolute Return Fund (PAARF) and Pender Alternative Arbitrage Plus Fund (PAAF+), as well as any future funds managed by the filer. The British Columbia Securities Commission is the principal regulator, and the decision also applies to Ontario and other Canadian jurisdictions through the Multilateral Instrument 11-102 Passport System.