Mutual Reliance Review System for Exemptive Relief Applications -- Registered portfolio manager exempted from "annual discretionary management disclosure requirement" related to its exercise, for managed accounts, of discretionary management authority in respect of securities of mutual funds that are managed by the portfolio manager and may (in connection with their distribution) be connected issuers of the portfolio manager -- Exemption decision requires that each managed account client has received a statement of policies of the portfolio manager which identifies the relationship of the portfolio manager to the funds, and the portfolio managed client has provided specific and informed written consent to the portfolio manager's exercise of the discretionary authority -- Annual discretionary management disclosure requirement, which exists as a result of the combined operation of subsections 227(1) and section 227 of the Regulation, would require the portfolio manager to provide each management account client with its statement of policies and obtain the specific and informed written consent of the client once in each related twelve-month period.
Ontario Regulation 1015, R.R.O. 1990, as am., ss. 227(1), 227(2) and 233.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, ONTARIO, NOVA SCOTIA AND
NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
TD ASSET MANAGEMENT INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of the Provinces of Alberta, Ontario, Nova Scotia and Newfoundland and Labrador (the "Jurisdictions") has received an application from TD Asset Management Inc. ("TDAM") for a decision under the securities legislation (the "Legislation") of the Jurisdictions that the restriction in the Legislation against a registrant acting as an adviser, by exercising discretionary authority with respect to the investment portfolio or account of a client, in respect of securities that are securities of a related issuer, or in the course of an initial distribution or distribution (depending on the Jurisdiction), securities of a connected issuer of the registrant, unless, the registrant, after the registrant has initially done so, provides, on a specified periodic basis, certain disclosure to the client and obtains the requisite specific and informed written consent of the client (the "Annual Discretionary Management Disclosure Requirement") should not apply to TDAM in connection with it so acting as an adviser in respect of shares or units of TDAM Funds (as defined below), for Managed Accounts (as defined below) of Managed Account Clients (as defined below).
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS any terms used herein that are defined in National Instrument 14-101 shall, unless otherwise defined or the context otherwise requires, have the same meaning;
AND WHEREAS TDAM has represented to the Decision Makers that:
1. TDAM, a corporation incorporated under the laws of Ontario, is registered under the Legislation of each of the Jurisdictions as an adviser, in the categories of "investment counsel" and "portfolio manager" (or the equivalent).
2. TDAM is registered under the Legislation of each of Ontario and Newfoundland and Labrador as a dealer, in the category of "limited market dealer".
3. TDAM is registered under the Legislation of Nova Scotia as a dealer, in the category of "mutual fund dealer".
4. As part of its operations, TDAM provides discretionary portfolio management services to investment portfolio accounts (each, a "Managed Account") of clients (each, a "Managed Account Client"), under which TDAM, pursuant to a written agreement made between TDAM and the Managed Account Client, makes investment decisions for the Managed Account, and has full discretionary authority to purchase or sell securities for the Managed Account without obtaining the specific consent of the Managed Account Client and pursuant to which the Managed Account Client expressly authorizes TDAM to exercise its discretion to purchase or redeem, for or on behalf of the Managed Account, shares or units of one or more mutual funds (each, a "TDAM Fund") that are, at the relevant time, managed by TDAM.
5. Shares or units of a TDAM Fund that are acquired by TDAM on behalf of a Managed Account will be acquired pursuant to a prospectus or in reliance upon an exemption from the prospectus requirement.
AND WHEREAS under the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that the Annual Discretionary Management Disclosure Requirement shall not apply to TDAM for its acting as an adviser, by exercising discretionary authority for Managed Accounts, in respect of shares or units of a TDAM Fund, provided that:
(a) TDAM has previously secured the specific and informed written consent of the Managed Account Client to the exercise by TDAM of such discretionary authority; and
(b) TDAM has previously provided the Managed Account Client with a statement of policies of TDAM which identifies the relationship between TDAM and the TDAM Fund.
November 6, 2003.
"Paul K Bates"
"Wendell S. Wigle"