Securities Law & Instruments

 

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – relief granted to exchange-traded mutual funds for continuous distribution of securities – relief to permit funds’ prospectus to include a modified statement of investor rights – relief to permit funds’ prospectus to not include an underwriter’s certificate – relief from take-over bid requirements for normal course purchases of securities on the TSX – prospectus form and underwriting certificate relief granted subject to manager filing a prescribed summary document for each fund on SEDAR and other terms and conditions set out in decision document and subject to sunset clause tied to the implementation of rule amendments to create new ETF Facts document to replace summary document.

Applicable Legislative Provisions

Securities Act (Ontario), R.S.O. 1990, c. S. 5, as am., ss. 59(1), 147.
National Instrument 41-101 General Prospectus Requirements, s. 19.1.
Form 41-101F2 Information Required in an Investment Fund Prospectus, Item 36.2.
National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.

March 6, 2017

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
(the Jurisdictions)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
DESJARDINS GLOBAL ASSET MANAGEMENT INC.
(THE FILER)

AND

DESJARDINS CANADA MULTIFACTOR-CONTROLLED VOLATILITY ETF,
DESJARDINS USA MULTIFACTOR-CONTROLLED VOLATILITY ETF,
DESJARDINS DEVELOPED EX-USA EX-CANADA MULTIFACTOR-CONTROLLED VOLATILITY ETF,
DESJARDINS EMERGING MARKETS MULTIFACTOR-CONTROLLED VOLATILITY ETF,
DESJARDINS CANADIAN UNIVERSE BOND INDEX ETF,
DESJARDINS CANADIAN SHORT TERM BOND INDEX ETF,
DESJARDINS 1-5 YEAR LADDERED CANADIAN CORPORATE BOND INDEX ETF,
DESJARDINS 1-5 YEAR LADDERED CANADIAN GOVERNMENT BOND INDEX ETF,
DESJARDINS CANADIAN PREFERRED SHARE INDEX ETF
(the Proposed ETFs)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a Decision Maker) has received an application from the Filer on behalf of the Proposed ETFs, and such other exchange-traded mutual funds as the Filer, or an affiliate of the Filer, may manage in the future (the Future ETFs, and together with the Proposed ETFs, the ETFs and individually, an ETF) for a decision under the securities legislation of the Jurisdictions (the Legislation) that:

(a)           exempts the Filer and each ETF from the requirement to include a certificate of an underwriter in an ETF’s prospectus (the Underwriter’s Certificate Requirement);

(b)           exempts the Filer and each ETF from the requirement to include in an ETF’s prospectus the statement respecting purchasers’ statutory rights of withdrawal and remedies of rescission or revisions of the price or damages in substantially the form prescribed in item 36.2 of Form 41-101F2 Information Required in an Investment Fund Prospectus (the Prospectus Form Requirement); and

(c)           exempts a person or company purchasing ETF Securities (as defined below) in the normal course through the facilities of the TSX (as defined below) or another marketplace from the Take-Over Bid Requirements (as defined below)

(collectively, the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a)           the Autorité des marchés financiers is the principal regulator for this application;

(b)           the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System (c. V-1.1, r.1) (Regulation 11-102) is intended to be relied upon in the jurisdictions of Canada other than the Jurisdictions; and

(c)           the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 11-102, Regulation 14-101 respecting Definitions (c. V-1.1, r.3), Regulation 21-101 respecting Marketplace Operation (c. V-1.1, r.5), Regulation 41-101 respecting General Prospectus Requirements (c. V-1.1, r.14) (Regulation 41-101), Regulation 62-104 respecting Take-Over Bids and Issuer Bids (c. V-1.1, r.35) (Regulation 62-104) and Regulation 81-102 respecting Investment Funds (c. V-1.1, r.39) (Regulation 81-102) have the same meaning if used in this decision, unless otherwise defined. Capitalized terms used in this decision have the following meanings:

Affiliate Dealer means a registered dealer that is an affiliate of an Authorized Dealer or Designated Broker and that participates in the re-sale of Creation Units (as defined below) from time to time.

Authorized Dealer means a registered dealer that has entered, or intends to enter, into an agreement with the manager of an exchange-traded fund including the Filer (an ETF Manager) on behalf of one or more ETFs, authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more ETFs on a continuous basis from time to time.

Designated Broker means a registered dealer that has entered, or intends to enter, into an agreement with an ETF Manager, on behalf of one or more ETFs, to perform certain duties in relation to the ETFs, including posting a liquid two-way market for the trading of the ETF’s listed securities on the TSX or another marketplace.

ETF Facts means a prescribed disclosure document as contemplated under the proposed amendments to Regulation 41-101 published on December 8, 2016, in respect of one or more classes or series of ETF Securities being distributed under a prospectus.

ETF Security or ETF Securities means a listed security or listed securities of an ETF in a jurisdiction of Canada.

Other Dealer means a registered dealer that acts as authorized dealer or designated broker to other exchange-traded funds that are not managed by the Filer and that have received relief under a Prospectus Delivery Decision.

Prospectus Delivery Decision means a decision granting relief from the Prospectus Delivery Requirement to a Designated Broker, Authorized Dealer, Affiliate Dealer or Other Dealer dated August 24, 2015, or, in some jurisdictions of Canada, any subsequent decision, granting similar relief to a Designated Broker, Authorized Dealer, Affiliate Dealer or Other Dealer, and in each case, that is in effect at the relevant time.

Prospectus Delivery Requirement means the requirement under the Legislation that obligates a dealer to send or deliver to the subscriber or the purchaser or its agent, within a specified time period and in a specified manner, the prospectus, and any amendment to the prospectus, in respect of an application to subscribe for or purchase securities offered in a distribution. In Québec, the Prospectus Delivery Requirement does not apply to a dealer who receives an order to subscribe for or purchase a mutual fund traded on an exchange or an alternative trading system, in accordance with the Statutory Exemption to Dealers.

Prospectus Right of Rescission means the right of action, given to a person under the Legislation, for rescission or the revision of the price or damages against a dealer, for failure of the dealer to send or deliver a prospectus to the subscriber or the purchaser of a security offered in a distribution, or its agent to whom a prospectus and any amendment was required to be sent or delivered but was not sent or delivered pursuant to the Prospectus Delivery Requirement. In Québec, this right set forth in section 214 of the Securities Act, CQLR, c. V-1.1 does not apply to an order to subscribe for or purchase a mutual fund traded on an exchange or an alternative trading system, in accordance with the Statutory Exemption to Dealers.

Right of Withdrawal means the right, given to a subscriber or a purchaser under the Legislation, to withdraw from a subscription for or a purchase of a security offered in a distribution if the dealer from which the subscriber or the purchaser subscribed or purchased the securities receives written notice evidencing the intention of the subscriber or the purchaser not to be bound by the subscription or the purchase within two business days of receipt of the latest prospectus or any amendment to the prospectus. In Québec, this right set forth in section 30 of the Securities Act, CQLR, c. V-1.1 does not apply to an order to subscribe for or purchase a mutual fund traded on an exchange or an alternative trading system, in accordance with the Statutory Exemption to Dealers.

Securityholders means beneficial and registered holders of ETF Securities.

Summary Document means a document, in respect of one or more classes or series of ETF Securities being distributed under a prospectus, prepared in accordance with Appendix A.

Statutory Exemption to Dealers means, in Québec, the exemption from the Prospectus Delivery Requirement, provided to a dealer who receives an order to subscribe for or purchase a security of a mutual fund traded on an exchange or an alternative trading system. This exemption is set forth in the third paragraph of section 29 of the Securities Act, CQLR c. V-1.1.

Take-Over Bid Requirements means the requirements applicable to take-over bids in Part 2 of Regulation 62-104.

Trade Confirmation Rights means, collectively, the rights, given to a subscriber or purchaser of an ETF Security under the Legislation in certain circumstances, to rescind the subscription or the purchase, or to demand the purchase or repurchase, within 48 hours after receiving confirmation of the subscription or the purchase. In Québec, the right to demand the purchase or repurchase is set forth in section 109.8 of the Securities Act, CQLR, c. V-1.1.

TSX means the Toronto Stock Exchange or any successor exchange to the TSX.

Representations

This decision is based on the following facts represented by the Filer:

General

1.             The Filer is a corporation established under the laws of the Province of Québec, with its head office located in Montréal, Québec.

2.             The Filer, or an affiliate of the Filer, is, or will be, the investment fund manager of the ETFs. The Filer is duly registered as an investment fund manager and as a portfolio manager in the Provinces of Québec, Ontario, Newfoundland and Labrador and in one or more other jurisdictions of Canada.

3.             The Filer has filed, or will file, a long form prospectus in accordance with Regulation 41-101 on behalf of the ETFs.

4.             The Filer has applied to list the ETF Securities on the TSX or another marketplace.

5.             The Filer is not in default of securities legislation in any jurisdictions of Canada.

6.             Each ETF will be a mutual fund created under the laws of the Province of Québec or Ontario.

7.             Each ETF will be reporting issuer in one or more of the jurisdictions of Canada and will be subject to the provisions of Regulation 81-102, subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities.

8.             ETF Securities will be distributed on a continuous basis in one or more of the jurisdictions of Canada under a prospectus.

9.             A prescribed number of ETF Securities may generally only be subscribed for or purchased directly from the ETFs by Authorized Dealers or Designated Brokers on any trading day when there is a trading session on the TSX or other marketplace (a Creation Unit). Authorized Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of ETF Securities on the TSX or another marketplace.

10.          In addition to subscribing for and re-selling Creation Units, Authorized Dealers, Designated Brokers and Affiliate Dealers will also generally be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market. Other Dealers may also be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market despite not being an Authorized Dealer, Designated Broker or Affiliate Dealer.

11.          According to the Authorized Dealers and Designated Brokers, Creation Units will generally be commingled with other ETF Securities purchased by the Authorized Dealers, Designated Brokers and Affiliate Dealers in the secondary market. As such, it is not practicable for the Authorized Dealers, Designated Brokers or Affiliate Dealers to determine whether a particular re-sale of ETF Securities involves Creation Units or ETF Securities purchased in the secondary market.

12.          Except for Authorized Dealer and Designated Broker subscriptions for Creation Units, as described above, ETF Securities generally may not be purchased directly from an ETF. ETF investors are generally expected to purchase and sell ETF Securities, directly or indirectly, through dealers executing trades through the facilities of the TSX or another marketplace.

Reasons supporting the Underwriter’s Certificate Relief

13.          The Authorized Dealers and Designated Brokers will not provide the same services in connection with a distribution of Creation Units as would typically be provided by an underwriter in a conventional underwriting.

14.          The Authorized Dealers and Designated Brokers will not be involved in the preparation of an ETF’s prospectus and would not perform any review or any independent due diligence of the contents of an ETF’s prospectus.

15.          The Filer generally conducts its own marketing, advertising and promotion of the ETFs. The Authorized Dealers and Designated Brokers will not incur any marketing costs or receive any underwriting fees or commissions from the ETFs or the Filer in connection with the distribution of Creation Units.

Reasons supporting the Prospectus Form Requirement Relief

16.          Under the applicable Prospectus Delivery Decision or as a result from the Statutory Exemption to Dealers, the Authorized Dealers, Designated Brokers and Affiliate Dealers are exempt from the Prospectus Delivery Requirement in connection with the re-sale of Creation Units to investors on the TSX or another marketplace. Other Dealers are also exempt from the Prospectus Delivery Requirement in connection with the re-sale of creation units of other exchange-traded funds that are not managed by the Filer. Consequently, the Prospectus Right of Rescission and the Right of Withdrawal are not available or remain without effect to a purchaser of an ETF Security.

17.          The Exemption Sought from the Prospectus Form Requirement is required to reflect the relief provided in each Prospectus Delivery Decision or as a result from the Statutory Exemption to Dealers. Accordingly, the Filer will include disclosure in each ETF’s prospectus explaining the impact on a purchaser’s statutory rights as a result of the Prospectus Delivery Decision or the Statutory Exemption to Dealers, in replacement of the disclosure prescribed by the Prospectus Form Requirement.

18.          The disclosure related to the Trade Confirmation Rights in applicable jurisdictions of Canada, and other rights and remedies if the prospectus and any amendment contain a misrepresentation, remain unaffected by the grant of the exemption from the Prospectus Form Requirement.

Reasons supporting the Take-over Bid Requirements Relief

19.          As equity securities that will trade on the TSX or another marketplace, it is possible for a person or company to acquire such number of ETF Securities so as to trigger the application of the Take-Over Bid Requirements. However,

(a)           it is not, or will not, be possible for one or more Securityholders to exercise control or direction over an ETF as the constating documents of each ETF will provide that there can be no changes made to such ETF which do not have the support of the Filer;

(b)           the way in which ETF Securities of an ETF will be priced generally deters anyone from either seeking to acquire control, or offering to pay a control premium, for outstanding ETF Securities because pricing for ETF Securities of an ETF will be dependent upon, among other things, the performance of the portfolio of the ETF as a whole; and

(c)           it will be difficult for purchasers of ETF Securities of an ETF to monitor compliance with the Take-Over Bid Requirements because the number of outstanding ETF Securities will always be in flux as a result of the ongoing issuance and redemption of ETF Securities by each ETF.

20.          The application of the Take-Over Bid Requirements to the ETFs may have an adverse impact on liquidity of the ETF Securities because they could cause Designated Brokers and other large Securityholders to cease trading ETF Securities once the Securityholder has reached the prescribed threshold at which the Take-Over Bid Requirements would apply.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

1.             The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted in respect of the Underwriter’s Certificate Requirement and the Prospectus Form Requirement, provided that the Filer will be in compliance with the following conditions:

(a)           the Filer files with the applicable jurisdictions of Canada on SEDAR the Summary Document for each class or series of ETF Securities concurrently with the filing of the final prospectus for that ETF;

(b)           the Filer displays on its website in a manner that would be considered prominent to a reasonable investor the Summary Document for each class or series of ETF Securities for each ETF;

(c)           the Filer amends the Summary Document at the same time it files any amendments to the ETF's prospectus that affect the disclosure in the Summary Document and files the amended Summary Document with the applicable jurisdictions of Canada on SEDAR and makes it available on its website in a manner that would be considered prominent to a reasonable investor;

(d)           the Filer provides or makes available to each Authorized Dealer, Designated Broker, Affiliate Dealer or Other Dealer, the number of copies of the Summary Document of each ETF Security that the Authorized Dealer, Designated Broker, Affiliate Dealer or Other Dealer reasonably requests;

(e)           (i) each ETF’s prospectus, as the same may be amended from time to time, will incorporate the relevant Summary Document by reference;

(ii)           each Proposed ETF's prospectus, pro forma prospectus or any amendment thereto will, and each Future ETF’s preliminary prospectus, pro forma prospectus, prospectus or any amendment thereto will, contain the disclosure referred to in paragraph 17 above; and

(iii)          each Proposed ETF's prospectus or pro forma prospectus will, and each Future ETF’s preliminary prospectus, prospectus or pro forma prospectus will, disclose the relief granted pursuant to the Exemption Sought and the Prospectus Delivery Decision under Item 34.1 of Form 41-101F2 – Information Required in an Investment Fund Prospectus, as applicable;

(f)            the Filer obtains an executed acknowledgement from each Authorized Dealer, Designated Broker and Affiliate Dealer, and uses its best efforts to obtain an acknowledgment from each Other Dealer:

(i)            indicating such dealer’s election, to send or deliver the Summary Document in accordance with a Prospectus Delivery Decision or, alternatively, to comply with the Prospectus Delivery Requirement; and

(ii)           if the Authorized Dealer, Designated Broker, Affiliate Dealer or Other Dealer agrees to deliver the Summary Document in accordance with a Prospectus Delivery Decision:

(A)           an undertaking that the Authorized Dealer, Designated Broker, Affiliate Dealer or Other Dealer will attach or bind one ETF's Summary Document with another ETF's Summary Document only if the documents are being sent or delivered under the Prospectus Delivery Decision at the same time to an investor purchasing ETF Securities of each such ETF; and

(B)           confirming that the Authorized Dealer, Designated Broker, Affiliate Dealer or Other Dealer has in place written policies and procedures to ensure that it is in compliance with the conditions of the Prospectus Delivery Decision;

(g)           the Filer will keep records of which Authorized Dealers, Designated Brokers, Affiliate Dealers and Other Dealers have provided it with an acknowledgement under a Prospectus Delivery Decision, and which intend to rely on and comply with the Prospectus Delivery Decision or intend to comply with the Prospectus Delivery Requirement;

(h)           the Filer files with its principal regulator, to the attention of the Director, Investment Funds, on or before January 31st in each calendar year, a certificate signed by an ultimate designated person certifying that, to the best of the knowledge of such person, after making due inquiry, the Filer has complied with the terms and conditions of this decision during the previous calendar year;

(i)            if the Filer files an ETF Facts instead of a Summary Document with respect to a class or series of ETF Securities, the latest ETF Facts filed in respect of such class or series of ETF Securities must be substituted for the Summary Document in order to satisfy the foregoing conditions with respect to any purchase of such class or series of ETF Securities that occurs after the date of the filing of such ETF Facts;

(j)            conditions (a), (b), (c) and (e)(i) above do not apply to the Exemption Sought with respect to a class or series of an ETF Security if the Filer files an ETF Facts for such class or series of the ETF Security;

(k)           conditions (d), (e)(ii), (e)(iii), (f), (g) and (h) above do not apply to an ETF with respect to the Exemption Sought after any new legislation or rule dealing with the Prospectus Delivery Decision takes effect and any applicable transition period has expired.

2.             The Exemption Sought from the Prospectus Form Requirement, as it relates to one or more of the jurisdictions of Canada, will terminate on the latest of: (i) the coming into force of any legislation or rule dealing with the Exemption Sought from the Prospectus Form Requirement, or (ii) the end date of any applicable transition period for any legislation or rule dealing with the Exemption Sought from the Prospectus Form Requirement.

3.             The decision of the Decision Makers under the Legislation is that the Exemption Sought in respect of the Take-Over Bid Requirements is granted.

“Gilles Leclerc”
Superintendent, Securities Markets
Autorité des marchés financiers


 

APPENDIX A

CONTENTS OF SUMMARY DOCUMENT

General Instructions

1.             Items 1 to 10 represent the minimum disclosure required in a Summary Document for a fund. The inclusion of additional information is not precluded so long as the Summary Document does not exceed a total of four pages in length (two pages double-sided).

2.             Terms defined in Regulation 81-102 respecting Investment Funds, Regulation 81-105 respecting Mutual Fund Sales Practices or Regulation 81-106 respecting Investment Fund Continuous Disclosure and used in this Summary Document have the meanings that they have in those regulations.

3.             Information in the Summary Document must be clear and concise and presented in plain language.

4.             The format and presentation of information in the Summary Document are not prescribed but the information must be presented in a manner that assists in readability and comprehension.

5.             The order of the Items outlined below is not prescribed, except for Items 1 and 2, which must be presented as the first 2 items in the Summary Document.

6.             Each reference to a fund in this Appendix A refers to an ETF as defined in the decision above.

Item 1 – Introduction

Include at the top of the first page a heading consisting of:

(a)           the title “Summary Document”;

(b)           the name of the manager of the fund;

(c)           the name of the fund to which the Summary Document pertains; and

(d)           the date of the document.

Item 2 – Cautionary Language

Include a statement in italics in substantially the following form:

“The following is a summary of the principal features of this fund. You can find more detailed information about the fund in the prospectus. The prospectus is available on [insert name of the manager of the fund] website at [insert manager of the fund website], or by contacting [insert name of the manager of the fund] at [insert manager of the fund’s email address], or by calling [insert telephone number of the manager of the fund].”

Item 3 – Fund Details

Include the following disclosure:

(a)           ticker symbol;

(b)           fund identification code(s);

(c)           index ticker (as applicable);

(d)           exchange;

(e)           currency;

(f)            inception date;

(g)           RSP eligibility;

(h)           DRIP eligibility;

(i)            expected frequency and timing of distributions, and if applicable, the targeted amount for distributions;

(j)            management expense ratio, if available; and

(k)           portfolio manager, when the fund is actively managed.

Item 4 – Investment Objectives

Include a description of the fundamental nature of the fund, or the fundamental features of the fund that distinguishes it from other funds.

INSTRUCTIONS:

Include a description of what the fund primarily invests in, or intends to primarily invest in, such as:

(a)           a description of the fund, including what the fund invests in, and if it is trying to replicate an index, the name of the index, and an overview of the nature of securities covered by the index or the purpose of the index; and

(b)           the key investment strategies of the fund.

Item 5 – Investments of the Fund

1.             Include a table disclosing:

(a)           the top 10 positions held by the fund; and

(b)           the percentage of net asset value of the fund represented by the top 10 positions.

2.             Include at least one, and up to two, charts or tables that illustrate the investment mix of the fund’s investment portfolio.

INSTRUCTIONS:

(a)           The information required under this Item is intended to give a snapshot of the composition of the fund’s investment portfolio. The information required to be disclosed under this Item must be as at a date within 60 days before the date of the Summary Document.

(b)           The information required under Item 5(2) must show a breakdown of the fund’s investment portfolio into appropriate subgroups and the percentage of the aggregate net asset value of the fund constituted by each subgroup. The names of the subgroups are not prescribed and can include security type, industry segment or geographic location. The fund should use the most appropriate categories given the nature of the fund. The choices made must be consistent with disclosure provided under “Summary of Investment Portfolio” in the fund’s MRFP.

(c)           For new funds where the information required to be disclosed under this Item is not available, provide a brief statement explaining why the required information is not available.

Item 6 – Risk

1.             Include a statement in italics in substantially the following form:

“All investments involve risk. When you invest in the fund the value of your investment can go down as well as up. For a description of the specific risks of this fund, see the fund’s prospectus.”

2.             If the cover page of the fund’s prospectus contains text box risk disclosure, also include a description of those risk factors in the Summary Document.

Item 7 – Fund Expenses

1.             Include an introduction using wording similar to the following:

“You don’t pay these expenses directly. They affect you because they reduce the fund’s returns.”

2.             Provide information about the expenses of the fund in the form of the following table:

 

Annual rate
(as a % of the fund’s value)

Management expense ratio (MER)
This is the total of the fund’s management fee and operating expenses.

 

Trading expense ratio (TER)
These are the fund’s trading costs.

 

Fund expenses
The amount included for fund expenses is the amount arrived at by adding the MER and the TER.

 

3.             If the information in (2) is unavailable because the fund is new including wording similar to the following:

“The fund’s expenses are made up of the management fee, operating expenses and trading costs. The fund’s annual management fee is [*]% of the fund’s value. Because this fund is new, its operating expenses and trading costs are not yet available.”

INSTRUCTIONS:

Use a bold font or other formatting to indicate that fund expenses is the total of all ongoing expenses set out in the chart and is not a separate expense charged to the fund.

Item 8 – Trailing Commissions

1.             If the manager of the fund or another member of the fund’s organization pays trailing commissions, include a brief description of these commissions.

2.             The description of any trailing commission must include a statement in substantially the following words:

“The trailing commission is paid out of the management fee. The trailing commission is paid for as long as you own the fund.”

Item 9 – Other Fees

1.             Provide information about the amount of fees payable by an investor, other than those already described or payable by designated brokers and underwriters.

2.             Include a statement using wording similar to the following:

“You may pay brokerage fees to your dealer when you purchase and sell units of the fund.”

INSTRUCTIONS:

(a)           Examples include any redemption charges, sales charges or other fees, if any, associated with buying and selling securities of the fund.

(b)           Provide a brief description of each fee disclosing the amount to be paid as a percentage (or, if applicable, a fixed dollar amount) and state who charges the fee.

Item 10 – Statement of Rights

State in substantially the following words:

“Under securities law in some provinces and territories, you have:

the right to cancel your purchase within 48 hours after you receive confirmation of the purchase, or

other rights and remedies if this document or the fund’s prospectus contains a misrepresentation. You must act within the time limit set by the securities law in your province or territory.

For more information, see the securities law of your province or territory or ask a lawyer.”.

Item 11 – Past Performance

If the fund includes past performance:

1.             Include an introduction using wording similar to the following:

This section tells you how the fund has performed over the past [insert the lesser of 10 years or the number of completed calendar years] years. Returns are after expenses have been deducted. These expenses reduce the fund’s returns.

It’s important to note that this doesn’t tell you how the fund will perform in the future as past performance may not be repeated. Also, your actual after-tax return will depend on your personal tax situation.

2.             Show the annual total return of the fund, in chronological order for the lesser of:

(a)           each of the 10 most recently completed calendar years; and

(b)           each of the completed calendar years in which the fund has been in existence and which the fund was a reporting issuer.

3.             Show the:

(a)           final value, of a hypothetical $1,000 investment in the fund as at the end of the period that ends within 60 days before the date of the Summary Document and consists of the lesser of:

(i)            10 years, or

(ii)           the time since inception of the fund,

and

(b)           the annual compounded rate of return that would equate the initial $1,000 investment to the final value.

INSTRUCTIONS:

In responding to the requirements of this Item, a fund must comply with the relevant sections of Part 15 of Regulation 81-102 respecting Investment Funds as if those sections applied to a Summary Document.

Item 12 – Benchmark Information

If the Summary Document includes benchmark information, ensure this information is consistent with the fund’s MRFP and presented in the same format as Item 11.