The Securities Commission granted an exemption to an investment fund manager, allowing the use of Lipper Awards and Lipper Leader Ratings in sales communications for mutual funds under their management. This exemption deviates from the standard requirements of paragraphs 15.3(4)(c) and (f) of National Instrument 81-102 Investment Funds (NI 81-102), which typically restrict the reference to performance ratings or rankings unless they meet certain criteria, including being up-to-date and covering all required periods.
The exemption is conditional on the inclusion of specific disclosures in sales communications, such as the award or rating category, the number of funds in the category, the ranking entity, the period the award or rating is based on, and a statement that ratings are subject to monthly change. Additionally, the Lipper Awards referenced must not be older than 365 days from the date of 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 was made under the authority of section 19.1 of NI 81-102, with the Ontario Securities Commission acting as the principal regulator. The exemption was granted on the basis that the Lipper Awards and Ratings provide valuable, objective, and transparent performance measures that can aid investors in making informed decisions, and that their use in sales communications would not be misleading.