Exemption granted to a number of mutual fund management companies fromprohibition contained in subsection 5.4(1) of National Instrument 81-105 Mutual FundSales Practices to permit them to pay a portion of the costs incurred by an insurancesales industry association in organizing a local sales congress, provided certainconditions are met.
National Instrument 81-105 Mutual Fund Sales Practices
IN THE MATTER OF
THE CANADIAN ASSOCIATION OF INSURANCE AND FINANCIAL ADVISORS TORONTO CHAPTER
IN THE MATTER OF
AGF FUNDS INC. AIC LIMITED, AIM FUNDS MANAGEMENT INC., C.I. MUTUAL FUNDS, DYNAMIC MUTUAL FUNDS,FIDELITY INVESTMENTS CANADA LIMITED, MACKENZIE FINANCIAL CORPORATION, RETROCOM GROWTH FUND INC.,TALVEST FUND MANAGEMENT INC., TEMPLETON MANAGEMENT LIMITED, TRIMARK INVESTMENT MANAGEMENT INC.,(the "Management Companies")
WHEREAS the Ontario Securities Commission (the "Commission") has receivedan application from the Toronto Chapter of the Canadian Association of Insurance andFinancial Advisors ( the "Association Chapter") and the Management Companies for adecision pursuant to section 9.1 of National Instrument 81-105 Mutual Fund SalesPractices ( the "National Instrument") for an exemption from subsection 5.4(1) of theNational Instrument to permit the Management Companies to pay a portion of the costincurred by the Association Chapter in organizing the Ontario sales congress to beheld for members of the Association Chapter in March, 2000 (the "Sales Congress");
AND WHEREAS the Association Chapter and the Management Companies haverepresented to the Commission that:
1. The Association Chapter is a chapter of the Canadian Association of Insuranceand Financial Advisors (also known as CAIFA). CAIFA is a national tradeassociation for insurance salespersons in Canada.
2. The Association Chapter has approximately 3200 members covering thegeographic area Metropolitan Toronto in Ontario.
3. The Association Chapter organizes sales congresses for members and otherinvitees which are designed to provide educational information for members anda forum for the discussion of industry issues. The Association Chapter hasorganized a Sales Congress for March 29th and 30th, 2000 in Toronto, Ontario.Approximately 2,000 attendees are expected to attend the Sales Congress; mostwill be members of the Association Chapter.
4. The Sales Congress will be an educational event and attendees earn credithours towards the annual continuing education credits required by CAIFA.
5. The Management Companies are members of the organization of a mutual fundwithin the meaning of the National Instrument and are registered in or mayotherwise distribute mutual funds in Ontario.
6. The Management Companies wish to pay a portion of the costs of the SalesCongress to be incurred by the Association Chapter.
7. Subsection 5.4(1) of the National Instrument prohibits a member of theorganization of a mutual fund from sponsoring the costs or expenses relating toa conference, seminar or course that is organized and presented by TheInvestment Funds Institute of Canada ("IFIC"), the Investment DealersAssociation of Canada ( the "IDA") or another trade or industry association.Subsection 5.4(2) of the National Instrument provides an exemption to permitmembers of the organization of mutual funds to sponsor conferences, seminarsor courses organized or presented by IFIC, the IDA or their respective affiliates,on the conditions indicated.
8. The Management Companies propose to sponsor a portion of the costs of theSales Congress in accordance with the conditions set out in subsection 5.4(2) ofthe National Instrument for IFIC and IDA sponsored conferences.
AND WHEREAS the Commission is satisfied that to grant the relief requestedwould not be prejudicial to the public interest;
IT IS HEREBY DETERMINED THAT the prohibition contained in subsection5.4(1) of the National Instrument prohibiting members of the organization of a mutualfund from sponsoring the costs or expenses relating to a conference, seminar or coursethat is organized and presented by a trade or industry association, shall not apply tothe Management Companies in paying a portion of the direct costs (as defined in theNational Instrument) incurred by the Association Chapter relating to the SalesCongress, provided that the conditions set out in subsection 5.4(2) of the NationalInstrument are complied with by the Management Companies and the AssociationChapter in respect of the Sales Congress.
March 10th, 2000.
"Howard I. Wetston" "Morley P. Carscallen"