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Purpose Investments Inc. et al.

2021-04-27 | Decision | 81-101 | Investment funds and structured products | https://www.osc.ca/en/securities-law/orders-rulings-decisions/purpose-investments-inc-et-al-6

National Instrument 81-101 Mutual Fund Prospectus Disclosure, ss. 5.1(4) and 6.1(1).


The Securities Commission has granted an exemption to a mutual fund management company, allowing it to consolidate the simplified prospectuses (SPs) of its alternative mutual funds with those of its conventional mutual funds. This decision is based on the provisions of National Instrument 81-101 Mutual Fund Prospectus Disclosure, specifically subsections 5.1(4) and 6.1(1), which typically require separate SPs for alternative and conventional funds.

The key reasons for the exemption include the desire to reduce renewal, printing, and related costs, and to streamline the distribution process across the company’s fund platform. The Commission acknowledged that the alternative and conventional funds share many operational and administrative features, and combining them in the same SP would allow investors to compare the funds more easily.

The decision also noted that investors would continue to receive the required fund facts and ETF facts documents, and the content of these documents would not be affected by the exemption. The Commission found no reason to treat mutual funds filing under National Instrument 81-101 differently from exchange-traded funds (ETFs) filing under National Instrument 41-101, which already allows for the consolidation of prospectuses for alternative and conventional funds.

The exemption was granted based on the test set out in the applicable securities legislation, with the principal regulator being satisfied that the exemption meets the necessary criteria.