The Ontario Securities Commission granted an exemption to a closed-end investment fund, allowing it to resell its repurchased or redeemed securities in the market without filing a prospectus, subject to certain conditions. This decision was based on the Securities Act, R.S.O. 1990, c. S.5, as amended, specifically sections 53(1), 74(1), and (1.1).
Key facts include:
– The fund is an unincorporated closed-end investment trust established in Ontario, not considered a mutual fund under the legislation.
– It is a reporting issuer in all Canadian provinces and complies with securities legislation.
– The fund’s units are listed on the Toronto Stock Exchange (TSX).
– The fund has programs for mandatory and discretionary repurchase of units, as well as monthly and annual redemption programs.
– Repurchased or redeemed units are held for a four-month period before resale and are resold in a manner that does not significantly impact market prices.
– The fund will not resell more than 5% of the outstanding units in a calendar year.
The reasoning for the decision includes:
– The resale of repurchased or redeemed units would typically require a prospectus, but the commission is satisfied that the exemption meets the legislative test.
– Prospective purchasers have access to the fund’s continuous disclosure on SEDAR.
The outcome is that the fund can resell its units without a prospectus if it complies with:
– Applicable securities legislation and Exchange regulations.
– Certain conditions of National Instrument 45-102 Resale of Securities.
– The representations made regarding the impact on market prices, the time frame for resale, and the volume of units resold.
This exemption is conditional upon the fund’s adherence to the specified regulations and representations.