The Securities Commission granted an exemption to a group of investment funds managed by Canada Life Investment Management Ltd. from the concentration restriction in subsection 2.1(1) of National Instrument 81-102 Investment Funds (NI 81-102). This exemption allows the funds to invest more than 10% of their net assets in debt securities issued or fully guaranteed by foreign governments or supranational agencies, subject to certain conditions.
The exemption is based on the belief that such investments will help the funds achieve their investment objectives and benefit investors. The funds are permitted to invest up to 20% of their net assets in AA-rated foreign government securities and up to 35% in AAA-rated securities. These investments must be consistent with the funds’ fundamental investment objectives and traded on mature and liquid markets.
The funds’ prospectuses must disclose the risks associated with the concentration of assets and the nature and terms of the exemption, including the conditions imposed and the types of securities covered.
The decision was made under the securities legislation of Ontario, with the Ontario Securities Commission acting as the principal regulator. The exemption was granted with the understanding that the funds would adhere to the conditions set forth to ensure investor protection and the integrity of the market.