Securities Law & Instruments

Headnote

Exemption for pooled funds from the requirement to file with the Commission interim financial statements under section 77(2) of the Act and comparative financial statements under section 78(1) of the Act, subject to conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5 as am., ss. 74(1).

National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR), s. 2.1(1)1.

Regulations Cited

Regulation made under the Securities Act, R.R.O. reg. 1015, as am.

IN THE MATTER OF

THE SECURITIES ACT (ONTARIO),

R.S.O. 1990, CHAPTER S.5, AS AMENDED (THE "ACT")

AND

IN THE MATTER OF

KINGWEST AND COMPANY

AND

KINGWEST U.S. EQUITY PORTFOLIO

KINGWEST AVENUE PORTFOLIO

(the "Existing Pooled Funds")

 

ORDER

(Section 147 of the Act)

UPON the application (the "Application") of Kingwest and Company ("Kingwest"), the manager of the Existing Pooled Funds and other mutual funds established and managed by Kingwest from time to time (collectively the "Pooled Funds"), to the Ontario Securities Commission (the "Commission") for an order pursuant to section 147 of the Act exempting the Pooled Funds from filing with the Commission the interim and annual financial statements prescribed by subsections 77(2) and 78(1), respectively, of the Act;

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND UPON Kingwest having represented to the Commission as follows:

1. Kingwest is a partnership organized under the laws of the Province of Ontario with its head office in Toronto, Ontario. Kingwest is a member of the Investment Dealers Association of Canada and is registered with the Commission as a broker and a dealer in the category of investment dealer (equities, options and managed accounts). Kingwest is, or will be, the manager of the Pooled Funds.

2. Each of the Pooled Funds is, or will be, an open-end mutual fund trust established under the laws of the Province of Ontario. The Pooled Funds are not and will not be reporting issuers in Ontario. Units of the Pooled Funds are, or will be, distributed in certain provinces of Canada without a prospectus pursuant to exemptions from the prospectus delivery requirements of applicable securities legislation.

3. The Pooled Funds are an administratively efficient construction that is designed to permit Kingwest to build larger investment models rather than reproduce those same models in individual segregated accounts.

4. Each of the Pooled Funds is considered to be a "mutual fund in Ontario" as defined in section 1(1) of the Act and is thus required to file interim financial statements under section 77(2) of the Act and comparative financial statements under section 78(1) of the Act (collectively, the "Financial Statements").

5. While the Pooled Funds are structured as mutual funds, they are not public mutual funds. The Pooled Funds are not reporting issuers and are not sold to the general public.

6. Unitholders of the Pooled Funds ("Unitholders") receive the Financial Statements for the Pooled Funds they hold. The Financial Statements are prepared and delivered to Unitholders in the form and for the periods required under the Act and the regulations or rules made thereunder (the "Regulations").

7. Section 2.1(1)1 of National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR) requires that every issuer required to file a document under securities legislation makes its filing through SEDAR. The Financial Statements filed with the Commission thus become publicly available.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED by the Commission pursuant to subsection 147 of the Act that the Pooled Funds be exempted from the requirements in subsection 77(2) and 78(1) of the Act to file the Financial Statements to the Commission, provided:

(a) The Pooled Funds will prepare and deliver to the Unitholders of the Pooled Funds the Financial Statements, in the form and for the periods required under the Act and the Regulations, as if the Financial Statements are required to be filed with the Commission;

(b) Kingwest will retain the Financial Statements indefinitely;

(c) Kingwest will provide the Financial Statements to the Commission or any member, employee or agent of the Commission immediately upon request of the Commission or any member, employee or agent of the Commission;

(d) Kingwest will provide a list of the Pooled Funds relying on this Order to the Investment Funds Branch of the Commission on an annual basis;

(e) Unitholders of the Funds will be notified that the Funds are exempted from the requirements in sections 77(2) and 78(1) of the Act to file the Financial Statements with the Commission;

(f) In all other aspects, the Pooled Funds will comply with the requirements of Ontario securities law for financial statements; and

(g) This decision, as it relates to the Commission, will terminate after the coming into force of any legislation or rule of the Commission dealing with the matters regulated by sections 77(2) and 78(1) of the Act.

January 13, 2004.

"Paul M. Moore"
"H. Lorne Morphy"