Securities Law & Instruments

Headnote

Exemption from the requirement to deliver comparative annual financial statements to registered securityholders of certain mutual funds.

Statutes Cited

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

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

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 the Provinces of Alberta, Ontario and Nova Scotia (the "Jurisdictions") has received an application (the "Application") from Quadravest Capital 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 any mutual funds or non-redeemable investment funds that are reporting issuers hereinafter established and/or managed by the Manager or a successor of 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 existing Funds are open-ended mutual fund corporations and trusts established under the laws of the Province of Ontario.

    (b) The Manager is a corporation incorporated under the laws of the Province of Ontario. The Manager is the manager of each of the Funds set out in Schedule A.

    (c) Each existing Fund is a reporting issuer or the equivalent thereof in each Jurisdiction and is not in default of applicable requirements of the Legislation.

    (d) Each Fund is required to deliver to each holder of its securities ("Securityholders") comparative financial statements within 140 days of its financial year-end, in the prescribed form pursuant to the Legislation.

    (e) 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 periods indicated unless they request same, and provide them with a request form to send back, by fax or prepaid mail, if they wish to receive the comparative annual financial statements. The notice will advise the Direct Securityholders where the annual financial statements can be found on the Manager's website: www.quadravest.com (or any successor website), Fund websites: www.financial15.com or www.dividend15.com, as well as on the SEDAR website, and downloaded from those sites. The Manager will send such financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.

    (f) Securityholders who hold their securities in the Funds through a nominee will be dealt with pursuant to National Instrument 54-101.

    (g) Securityholders will be able to access annual financial statements of the Funds on the SEDAR website, the Manager's website: www.quadravest.com (or any successor website), Fund websites: www. financial15.com or www.dividend15.com, or by calling the Manager's toll-free phone line at 877-478-2372.

    (h) 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.

    (i) The Canadian Securities Administrators have published 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.

    (j) 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 Funds.

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 Manager's website or the Fund's 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;

    (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; and

    (f) this decision shall terminate upon NI 81-106 coming into force.

      June 29, 2004.

      "Paul M. Moore"
      "Paul K. Bates"

       

      SCHEDULE "A"

      THE FUNDS

      Name of Fund

      Year-End

      ____________

      ________

      Split Yield Corporation

      January 31

      Income Financial Trust

      December 31

      American Income Trust

      December 31

      AmeriStar RSP Income Trust

      December 31

      Financial Services Income STREAMS Corporation

      January 31

      Capital Gains Income STREAMS Corporation

      November 30

      Income STREAMS III Corporation

      November 30

      Income Financial Plus Trust

      December 31

      Financial 15 Split Corp.

      November 30

      Dividend 15 Split Corp.

      November 30