The Securities Commission has approved a series of mutual fund mergers involving IA Clarington Investments Inc. as the filer on behalf of various terminating funds. The approval was necessary because the mergers did not meet the criteria for pre-approved reorganizations and transfers as per National Instrument 81-102 Investment Funds, specifically because the continuing funds have different investment objectives than the terminating funds, and the mergers are not considered qualifying exchanges or tax-deferred transactions under the Income Tax Act (Canada).
The filer provided securityholders with timely and adequate disclosure about the mergers, which were approved by securityholders at meetings. The Independent Review Committee (IRC) also recommended the mergers, considering them to achieve a fair and reasonable result for the funds.
The mergers will result in the termination of certain funds, which will be absorbed into continuing funds, with the goal of simplifying the product lineup, potentially improving performance, increasing diversification, and reducing fees for investors. The mergers are not expected to be detrimental to investor protection.
The relevant legislative provisions include National Instrument 81-102 Investment Funds, sections 5.5(1)(b) and 5.7(1)(b), as well as the Income Tax Act (Canada). The decision was made under the securities legislation of Quebec and Ontario and is also applicable in other Canadian provinces and territories through the Passport System. The mergers are anticipated to occur after the close of business on a specified effective date, with the terminating funds to be wound up within 30 days following the merger. The filer will bear the costs of the mergers, ensuring no additional fees for the securityholders.