Exemption from the requirement to deliver comparative annual financial statements to registered securityholders of certain mutual funds.
Securities Act (Ontario), R.S.O. 1990 c. S.5, as am., ss. 79 and 80(b)(iii).
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, ONTARIO AND NOVA SCOTIA
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
THE FUNDS LISTED IN SCHEDULE "A"
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, Ontario and Nova Scotia (the "Jurisdictions") has received an application (the "Application") from TD Asset Management Inc. (the "Manager"), the manager of the Funds (as defined herein), for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirement to deliver comparative annual financial statements to the securityholders of the mutual funds listed in Schedule "A" and the mutual funds hereinafter established and/or managed by the Manager (the "Funds") shall not apply unless securityholders have requested to receive them.
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions;
AND WHEREAS the Manager has represented to the Decision Makers that:
(a) The Funds are either open-ended mutual fund trusts, separate classes of mutual fund corporations, or mutual fund corporations governed by the laws of Ontario.
(b) The Manager is the manager of the Funds set out in Schedule "A". The Manager is registered as an investment counsel and portfolio manager or their equivalent in all provinces and territories of Canada other than Prince Edward Island, as a mutual fund dealer in Quebec, as a limited market dealer in Ontario, Newfoundland and Labrador, and as a commodity trading manager under the Commodity Futures Act (Ontario).
(c) The Funds are reporting issuers in each Jurisdiction and are not in default of any requirements of Legislation.
(d) Securities of the Funds listed in Schedule "A" are presently offered for sale on a continuous basis in provinces and territories of Canada pursuant to a simplified prospectus.
(e) Each of the Funds is required to deliver annually, within 140 days of its financial year-end, to each holder of its securities ("Securityholders"), comparative financial statements in the prescribed form pursuant to the Legislation.
(f) The Manager will send to Securityholders who hold securities of the Funds in client name (the "Direct Securityholders") in each year, a notice advising them that they will not receive the annual financial statements of the Funds for the year then ended unless they request same, and providing them with a request form to send back, by fax or prepaid mail, if they wish to receive the annual financial statements. The notice will advise the Direct Securityholders where annual financial statements can be found on the Internet (including on the SEDAR website) and downloaded. The Manager will send such financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.
(g) Securityholders who hold their securities in the Funds through a nominee will be dealt with pursuant to National Instrument 54-101.
(h) Securityholders will be able to access annual financial statements of the Funds either on the SEDAR website or on the website of the Manager: www.tdassetmanagement.com or by calling the Manager's toll-free phone line.
(i) There would be substantial cost savings if the Funds are not required to print and mail annual financial statements to those Direct Securityholders who do not want them.
(j) The Canadian Securities Administrators ("CSA") have published for comment proposed National Instrument 81-106 ("NI 81-106") which, among other things, would permit a Fund not to deliver annual financial statements to those of its Securityholders who do not request them, if the Funds provide each Securityholder with a request form under which the Securityholder may request, at no cost to the Securityholder, to receive the mutual fund's annual financial statements for that financial year.
(k) NI 81-106 would also require a Fund to have a toll-free telephone number for, or accept collect calls from, persons or companies that want to receive a copy of, among other things, the annual financial statements of the Fund.
AND WHEREAS under the System, this MRRS Decision Document evidences the Decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each Decision Maker is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
AND WHEREAS the Decision Makers are satisfied that making the Decision will not adversely affect the rule-making process with respect to proposed NI 81-106 and is consistent with National Instrument 54-101;
THE DECISION of the Decision Makers pursuant to the Legislation is that until NI 81-106 comes into force, the Funds shall not be required to deliver their comparative annual financial statements to their Direct Securityholders other than those Direct Securityholders who have requested to receive them provided that:
(a) the Manager shall file on SEDAR, under the annual financial statements category, confirmation of mailing of the request forms that have been sent to the Direct Securityholders within 90 days of mailing the request forms;
(b) the Manager shall file on SEDAR, under the annual financial statements category, information regarding the number and percentage of requests for annual financial statements made by the return of the request forms, on a province-by-province basis within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing;
(c) the Manager shall record the number and a summary of complaints received from Direct Securityholders about not receiving the annual financial statements and shall file on SEDAR, under the annual financial statements category, this information within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing;
(d) the Manager shall, if possible, measure the number of "hits" on the annual financial statements of the Funds on the www.tdassetmanagment.com website and shall file on SEDAR, under the annual financial statements category, this information within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing; and
(e) the Manager shall file on SEDAR, under the annual financial statements category, estimates of the annual cost savings resulting from the granting of this Decision within 90 days of mailing the request forms.
(f) this decision shall terminate upon NI 81-106 coming into force.
December 16, 2003.
"Harold P. Hands"
"Robert W. Korthals"