The Securities Commission has granted investment fund managers an exemption from certain related party transaction reporting requirements specified in paragraphs 117(1)1, 117(1)3, and 117(1)4 of the Securities Act (Ontario). This exemption applies to public investment funds managed by these fund managers, eliminating the need for monthly reporting as long as similar information is disclosed in the funds’ annual and interim management reports of fund performance (MRFPs). Additionally, the funds must maintain detailed records of related party transactions.
The exemption is contingent on the MRFPs including the name of the related party, the fees paid, and the payer of the fees if not the fund itself. The records must separately list each portfolio transaction made through a related party, detailing the name of the related party, the fees paid, and the fee payer.
This decision is based on the rationale that the required monthly reports are costly and time-consuming, and the information is already substantially disclosed in the MRFPs as per National Instrument 81-106. The exemption is also subject to the condition that the funds maintain accurate records of the transactions.
The relevant legislative provisions underpinning this decision include sections 117(1)1, 117(1)3, 117(1)4, and 117(2) of the Securities Act (Ontario), as well as National Instruments 81-102, 81-106, and 81-107. The decision also revokes and replaces previous relief granted to the fund managers.