HeadnoteMutualReliance Review System for Exemptive Relief Applications - extensionof mutual fund lapse date.
SecuritiesAct, R.S.O., 1990 c. S5, as amended, ss. 62(5)
INTHE MATTER OF
THESECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA,
SASKATCHEWAN,MANITOBA, ONTARIO, QUÉBEC, NOVA SCOTIA
ANDNEWFOUNDLAND AND LABRADOR
INTHE MATTER OF
THEMUTUAL RELIANCE SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
INTHE MATTER OF
HSBCCANADIAN MONEY MARKET FUND, HSBC U.S. DOLLAR MONEY MARKET FUND,
HSBCMORTGAGE FUND, HSBC CANADIAN BOND FUND, HSBC WORLD BOND RSPFUND,
HSBCCANADIAN BALANCED FUND, HSBC DIVIDEND INCOME FUND, HSBC EQUITYFUND,
HSBCSMALL CAP GROWTH FUND, HSBC GLOBAL EQUITY FUND, HSBC GLOBALEQUITY RSP
FUND,HSBC U.S. EQUITY FUND, HSBC U.S. EQUITY RSP FUND, HSBC EUROPEANFUND, HSBC ASIAPACIFIC FUND, HSBC EMERGING MARKETS FUND, HSBCGLOBAL TECHNOLOGY FUND (INDIVIDUALLY A "FUND" AND COLLECTIVELY,THE "FUNDS")
WHEREAS the Canadian securities regulatory authorityor regulator (the "Decision Maker") in each of British Columbia,Alberta, Saskatchewan, Manitoba, Ontario, Québec, NovaScotia and Newfoundland and Labrador (the "Jurisdictions") hasreceived an application from HSBC Investment Funds (Canada)Inc. ("HIFC"), in its capacity as manager of each Fund, fora decision pursuant to the securities legislation of the Jurisdictions(the "Legislation") that the time limits pertaining to the distributionof units ("Units") under the simplified prospectus and annualinformation form of the Funds dated December 1, 2000 (collectively,the "2000 Prospectus") be extended;
AND WHEREAS pursuant to the Mutual Reliance ReviewSystem for Exemptive Relief Applications (the "System"), theBritish Columbia Securities Commission is the Principal Jurisdictionfor this application;
AND WHEREAS HIFC and the Funds have represented tothe Decision Makers that:
1.HIFC is the manager-trustee, principal distributor and promoterof the Funds and is an indirect wholly-owned subsidiary of HSBCBank Canada, a Schedule II chartered bank under the BankAct (Canada).
2.HIFC is registered under the Legislation as a mutual fund dealer(or its equivalent).
3.Each Fund is a reporting issuer under the Legislation and isnot in default of any of the requirements of the Legislationmade thereunder.
4.The Funds are open-end mutual fund trusts, each of which wasestablished under the laws of British Columbia or Ontario pursuantto a separate declaration of trust and each of which is qualifiedfor distribution in the Jurisdictions by means of a simplifiedprospectus and annual information form.
5.The lapse date for the distribution of securities of the Fundsin British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotiaand Newfoundland and Labrador is December 1, 2001, and in Ontarioand Quebec it is December 4, 2001.
6.The Applicant proposes to establish four new mutual funds, theHSBC Japan Fund, HSBC Global Healthcare Fund, HSBC Global FinancialServices Fund and HSBC Global Resources Fund (together, the"New Funds"), each of which will be an open-end mutual fundtrust established under the laws of British Columbia and eachof which will be qualified for distribution in the Jurisdictionsby means of the consolidated simplified prospectus and annualinformation form for the Funds.
7.A preliminary and pro forma simplified prospectus (the "2001Prospectus") and annual information form (the "2001 AIF") forthe Funds and the New Funds were filed with the securities regulatoryauthorities in each of the Jurisdictions on August 2, 2001.The 2001 Prospectus and 2001 AIF were "preliminary" with respectto the New Funds and "pro forma" with respect to the Funds.
8.The Applicant has in the 2001 Prospectus and 2001 AIF combineddisclosure regarding the New Funds with disclosure regardingthe Funds (the New Funds and the Funds being collectively referredto herein as the "HSBC Mutual Fund Group"). In this way, a singlesimplified prospectus and annual information form will be usedin respect of all of the mutual funds in the HSBC Mutual FundGroup.
9.In order for the New Funds to qualify as a "mutual fund trust"under the Income Tax Act (Canada) (the "Tax Act") effectivefrom the date of their formation, each New Fund must, amongother things, have 150 unitholders within 90 days of the endof its first financial year. The financial year for the Fundsends, and the financial year for the New Funds will end, onDecember 15 of each year. As a result, if the New Funds wereestablished and a (final) simplified prospectus and annual informationform for the HSBC Mutual Fund Group was filed within the prescribedtime frames under the current lapse date of December 1, 2001,the New Funds would be required to have 150 unitholders by March14, 2002. Recent events affecting capital markets occurringsubsequent to the date of filing of the 2001 Prospectus and2001 AIF have created doubt as to whether the New Funds willbe able to obtain 150 unitholders by March 14, 2002.
10.The Applicant wishes to extend the time limits for filing thefinal simplified prospectus and annual information form andfor obtaining a receipt for a renewal prospectus of the Funds.
11.The request to extend these time limits for the Funds is soughtto permit HIFC to form the New Funds after December 15, 2001and thereby provide the New Funds with additional time to obtain150 unitholders.
AND WHEREAS pursuant to the System this MRRS DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");
AND WHEREAS each of the Decision Makers is satisfiedthat the test contained in the Legislation that provides theDecision Maker with the jurisdiction to make the Decision hasbeen met;
THE DECISION of the Decision Makers pursuant to theLegislation is that the time limits provided by the Legislationfor the filing of the final annual information form and finalsimplified prospectus for the Funds and the receipting thereofin connection with the distribution of securities of the Fundsare hereby extended such that:
a) The final annual information form and simplified prospectusfor the Funds must be filed by December 17, 2001;
b) The receipts therefore must be received by December 24, 2001;and
c) The distribution of units under the 2000 Prospectus may continueuntil December 24, 2001 on condition that the requirements in(a) and (b) above are met.
December 10, 2001.