The Securities Commission granted an exemption to mutual funds managed by the Filer from certain requirements of National Instrument 81-102 Investment Funds (NI 81-102) regarding sales communications. Specifically, the exemption pertains to paragraphs 15.3(4)(c) and (f), which regulate the reference to performance ratings or rankings in sales communications.
The exemption allows the mutual funds to reference FundGrade A+ Awards, FundGrade Ratings, Lipper Awards, and Lipper Leader Ratings in their sales communications. These awards and ratings are based on risk-adjusted performance relative to peers and are provided by Fundata Canada Inc. and Lipper, Inc., respectively.
The exemption is subject to conditions that include specific disclosures about the awards and ratings, such as the name of the category, the number of funds in the category, the ranking entity, the period the rating or award is based on, and a statement that ratings are subject to change monthly. Additionally, the referenced awards must not have been awarded more than 365 days prior to the sales communication, and the ratings must be based on performance comparisons within categories established by the Canadian Investment Funds Standards Committee (CIFSC) or its successor.
The decision is based on the belief that these awards and ratings provide valuable, objective, and transparent measures of performance that can assist investors in making informed decisions without being misleading. The exemption was granted under section 19.1 of NI 81-102 by the Ontario Securities Commission, which is the principal regulator for this application, and the Filer has indicated reliance on subsection 4.7(1) of Multilateral Instrument 11-102 Passport System in other Canadian provinces and territories.