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CI Investments Inc.

2021-07-06 | Decision | 81-102 | Investment funds and structured products | https://www.osc.ca/en/securities-law/orders-rulings-decisions/ci-investments-inc-31

National Instrument 81-102 Investment Funds, ss. 5.5(1)(b) and 19.1(2).


The Securities Commission has approved a mutual fund merger between Cambridge Monthly Income Corporate Class (Terminating Fund) and Cambridge Global High Income Fund (Continuing Fund), managed by CI Investments Inc. The approval was necessary as the merger did not meet all criteria for pre-approved reorganizations under National Instrument 81-102 Investment Funds (NI 81-102), specifically, it was not a tax-deferred transaction under the Income Tax Act (Canada). The merger complied with other pre-approval criteria, including securityholder vote and independent review committee (IRC) approval.

Key points include:

– The merger will occur on a taxable basis.
– Securityholders were provided with adequate disclosure, including tax implications and differences between the funds.
– The IRC reviewed the merger terms and found them fair and reasonable for the Terminating Fund.
– A special meeting for the Terminating Fund’s securityholders was scheduled for approval.
– The Continuing Fund’s securityholders were not required to vote as the merger was not deemed a material change for them.
– Costs associated with the merger will be borne by the Manager, and no sales charges will apply to the Terminating Fund’s securityholders.
– The merger will result in a larger, more diversified fund, expected to benefit all parties involved.

The decision was made under sections 5.5(1)(b) and 19.1(2) of NI 81-102, following a review of the application and representations by the Manager. The merger was contingent on obtaining approval from the Terminating Fund’s securityholders at the special meeting.