Exemption from the requirement to deliver comparative financial statements to registered securityholders of certain labour sponsored investment funds until proposed National Instrument 81-106 comes into force.
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
GROWTHWORKS WV CANADIAN FUND INC.
GROWTHWORKS WV OPPORTUNITY FUND INC.
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 GrowthWorks WV Management Ltd. (the Manager), the manager of the GrowthWorks WV Canadian Fund Inc. and GrowthWorks WV Opportunity Fund Inc. (the Existing Funds), for a decision pursuant to the securities legislation of the Jurisdictions (the Legislation) that the requirement to deliver annual financial statements to the securityholders of the Existing Funds and the mutual funds hereinafter established and/or managed by the Manager or a successor or affiliate 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:
1. The Manager is a corporation incorporated under the laws of Canada.
2. Each Existing Fund is a labour-sponsored investment fund corporation registered under the Community Small Business Investment Funds Act (Ontario) and a mutual fund under the Jurisdictions. In addition, GrowthWorks WV Canadian Fund is a labour-sponsored venture capital corporation registered under the Income Tax Act (Canada) and the Equity Tax Credit Act (Nova Scotia) and an approved fund under the Labour-sponsored Venture Capital Corporations Act (Saskatchewan). GrowthWorks WV Opportunity Fund is also a prescribed labour-sponsored venture capital corporation under the Income Tax Act (Canada).
3. Each Existing Fund is a reporting issuer in each Jurisdiction. Each Existing Fund is not in default of the applicable requirements of the current Legislation.
4. Each Existing Fund is required to deliver annually, within 140 days of its financial year-end, to each holder of its securities (the Securityholders), comparative financial statements in the prescribed form pursuant to the Legislation. Each Existing Fund has a financial year end of August 31.
5. 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 under which the securityholder may request, at no cost to the securityholder, to receive the annual financial statements. The notice will advise the Direct Securitholders where annual financial statements can be found on the Internet (including on the SEDAR website) and downloaded. The Manager will send financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.
6. Securityholders who hold their securities in the Funds through a nominee they will be dealt with pursuant to National Instrument 54-101.
7. Securityholders will be able to access financial statements of the Funds either on the SEDAR website or on the website of the Manager: www.growthworks.ca (or any successor website) or by calling the Manager's toll-free telephone number.
8. 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.
9. The Canadian Securities Administrators (the CSA) have re-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.
10. NI 81-106 would also require the 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 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.growthworks.ca 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 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 in the Jurisdictions.
July 20, 2004.
"Wendell S. Wigle"