The Securities Commission has granted an exemption to a mutual fund manager from a specific requirement under National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101). This requirement, detailed in subsection 5.1(4), prohibits the consolidation of a simplified prospectus for an alternative mutual fund with that of a non-alternative mutual fund.
The mutual fund manager, based in Ontario with its head office in Manitoba, oversees both alternative mutual funds and non-alternative mutual funds. The manager sought to combine the simplified prospectuses of these funds to reduce costs and streamline disclosure, arguing that the funds share many operational and administrative features, and that such consolidation would facilitate investor comparison.
The Commission agreed with the rationale provided, noting that investors would still receive the required fund facts documents and that the content of these documents would remain unchanged by the consolidation. Additionally, the Commission observed that exchange-traded funds (ETFs) are allowed to consolidate prospectuses for alternative and conventional funds under National Instrument 41-101 General Prospectus Requirements (NI 41-101), suggesting mutual funds should be afforded the same treatment.
The exemption was granted based on the Commission’s satisfaction that the decision met the legislative test for such an exemption. The outcome allows the mutual fund manager to consolidate the simplified prospectuses for its alternative and non-alternative mutual funds, facilitating a more efficient disclosure process.