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Purpose Investments Inc.

2021-04-30 | Decision | 81-102 | Investment funds and structured products | https://www.osc.ca/en/securities-law/orders-rulings-decisions/purpose-investments-inc-12

National Instrument 81-102 Investment Funds, ss. 2.5(2)(a), (a.1), (c) and 19.1.


The Ontario Securities Commission granted an exemption to Purpose Investments Inc., on behalf of its existing and future investment funds, allowing them to invest up to 10% of their net assets in certain Irish and Guernsey funds not subject to Canadian regulations. The exemption applies to mutual funds, alternative mutual funds, and non-redeemable investment funds managed by Purpose, enabling them to invest in Irish mutual funds regulated by the Central Bank of Ireland under UCITS rules, and Guernsey closed-end funds governed by the Guernsey Financial Services Commission.

The decision was based on the condition that the foreign funds have investment restrictions and practices substantially similar to those applicable to Canadian funds. The exemption is contingent upon the funds’ compliance with section 2.5 of National Instrument 81-102 Investment Funds (NI 81-102), except for the provisions from which relief was sought. The exemption will expire six months after any amendments to NI 81-102 that permit such investments without the need for an exemption.

The rationale for the exemption is that it allows for efficient and cost-effective investment strategies that align with the funds’ objectives, without duplicating management fees. The decision ensures that investments are made in the best interests of the funds and their investors, and that the foreign funds’ regulatory oversight is substantially equivalent to Canadian standards.