The Securities Commission granted an exemption from certain provisions of National Instrument 31-103 and National Instrument 81-102 to RBC Global Asset Management Inc. This exemption allows investment funds and managed accounts managed by RBC or its affiliates to engage in transactions involving commercial mortgages with affiliated entities that originate or administer these mortgages.
Key facts include:
– RBC Global Asset Management Inc. is registered as an adviser, dealer, and investment fund manager in various Canadian jurisdictions.
– The exemption applies to existing and future public funds, private funds, and managed accounts managed by RBC or its affiliates.
– The exemption allows these funds and accounts to purchase or sell commercial mortgages from or to RBC, which acts as lender, originator, and/or administrator of the mortgages.
– Normally, transactions with responsible persons or affiliates are restricted under subsection 13.5(2)(b) of NI 31-103 and section 4.2(1) of NI 81-102.
– The exemption is subject to conditions, including consistency with investment objectives, valuation by independent firms, and limits on the concentration of mortgages from RBC.
– An independent review committee must approve transactions for public and private funds.
– The exemption is believed to be in the best interests of the funds and managed accounts, providing efficient access to mortgages and liquidity.
Relevant laws and regulations include:
– National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, specifically subsection 13.5(2)(b).
– National Instrument 81-102 Investment Funds, specifically section 4.2(1).
– National Instrument 81-107 Independent Review Committee for Investment Funds for the establishment of an independent review committee.
The outcome is that RBC Global Asset Management Inc. can facilitate transactions involving commercial mortgages between the funds/accounts it manages and its affiliated entities, under the specified conditions to manage conflicts of interest and ensure fair valuation.