The Ontario Securities Commission granted an exemption to a closed-end investment trust, Sustainable Real Estate Dividend Fund (the Filer), from the prospectus requirement for the resale of its repurchased or redeemed securities prior to its conversion to a mutual fund. The exemption is subject to certain conditions and is based on the Securities Act, R.S.O. 1990, c. S.5, as amended, specifically sections 53(1), 74(1), and (1.1).
The Filer, an unincorporated closed-end investment trust established in Ontario, is not a mutual fund under the legislation and is a reporting issuer in all Canadian provinces. The Filer’s units are listed on the Toronto Stock Exchange (TSX), and it is managed by Middlefield Limited. The Filer has the right to repurchase units under a Mandatory Purchase Program if unit prices fall below a certain threshold and a Discretionary Purchase Program at market prices. Additionally, the Filer offers Monthly and Annual Redemption Programs for unit holders, with the possibility of Additional Redemptions under certain conditions.
The Filer sought to resell units repurchased or redeemed through these programs without a prospectus, which would normally be required for such a distribution. The resale would occur after a four-month holding period and would not exceed 5% of the outstanding units at the start of the calendar year. The Filer also committed to ensuring that the resale of units would not significantly impact the market price and that unsold units would be canceled after 16 months.
The exemption was granted on the condition that the Filer complies with applicable securities legislation and Exchange regulations, adheres to the resale provisions of National Instrument 45-102 Resale of Securities as if it were a selling security holder, and follows through with the representations made regarding the impact on market price, the cancellation of unsold units, and the limitation on the number of units resold.