The Securities Commission has granted an exemption to Tralucents Asset Management Inc. (the Filer) and its associated funds, including the Tralucents Global Alt (Long/Short) Equity Fund (the Existing Fund) and any future funds offering exchange-traded fund securities (ETF Securities) managed by the Filer or its affiliates (collectively, the Funds). This exemption allows the Funds to offer both ETF Securities and conventional mutual fund securities under the same prospectus, deviating from the standard requirement of filing a long form prospectus for ETF Securities as mandated by National Instrument 41-101 General Prospectus Requirements (NI 41-101).
The exemption permits the Filer to prepare and file a simplified prospectus in accordance with National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), including additional disclosures required by Form 41-101F2 that are not covered by Form 81-101F1, specifically for ETF Securities. The Filer is also required to file ETF Facts as prescribed by Form 41-101F4 for ETF Securities and a Fund Facts document as prescribed by Form 81-101F3 for conventional mutual fund securities.
Additionally, the Commission has granted technical relief from Parts 9, 10, and 14 of National Instrument 81-102 Investment Funds (NI 81-102), allowing each fund to treat its ETF Securities and conventional mutual fund securities as separate mutual funds for compliance purposes.
The exemption also includes relief from including an underwriter’s certificate in the Fund’s prospectus for ETF Securities (Underwriter’s Certificate Relief) and from take-over bid requirements for persons or companies purchasing ETF Securities through the Toronto Stock Exchange or another marketplace (Take-Over Bid Relief).
The decision is based on representations by the Filer, including the nature of the Funds, the distribution process for ETF Securities, and the roles of Authorized Dealers and Designated Brokers. The Filer has argued that Authorized Dealers and Designated Brokers do not provide typical underwriting services and do not receive fees or commissions for distributing ETF Securities, making the underwriter’s certificate impractical. Additionally, the Filer contends that the application of take-over bid requirements to ETF Securities would negatively impact their liquidity and is unnecessary due to the difficulty in exercising control over the Funds and the fluctuating number of outstanding ETF Securities.
The principal regulator, the Ontario Securities Commission, is satisfied that the exemption is justified and has granted the Exemption Sought.