Securities Law & Instruments

Headnote

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

UBS GLOBAL ALLOCATION TRUST

AND

UBS (CANADA) AMERICAN EQUITY FUND

UBS (CANADA) BALANCED (CAPPED) FUND

UBS (CANADA) BALANCED FUND

UBS (CANADA) BOND FUND

UBS (CANADA) CANADA PLUS EQUITY FUND

UBS (CANADA) CANADIAN EQUITY (CAPPED) FUND

UBS (CANADA) CANADIAN EQUITY FUND

UBS (CANADA) CASH IN ACTION FUND

UBS (CANADA) CASH MANAGEMENT FUND

UBS (CANADA) DIVERSIFIED FUND

UBS (CANADA) EMERGING MARKETS EQUITY FUND

UBS (CANADA) EMERGING TECHNOLOGIES FUND

UBS (CANADA) GLOBAL BOND FUND - (CAD)

UBS (CANADA) GLOBAL EQUITY FUND

UBS (CANADA) GLOBAL LARGE CAP EQUITY FUND

UBS (CANADA) GOVERNMENT OF CANADA MONEY MARKET FUND

UBS (CANADA) INTERNATIONAL EQUITY FUND

UBS (CANADA) INTERNATIONAL LARGE CAP EQUITY FUND

UBS (CANADA) LONG TERM BOND FUND

UBS (CANADA) MONEY MARKET FUND

UBS (CANADA) SHORT TERM BOND FUND

UBS (CANADA) SMALL CAPITALIZATION FUND

UBS (CANADA) U.S. $ CASH MANAGEMENT SERIES A

UBS (CANADA) U.S. EQUITY FUND

UBS (CANADA) U.S. LARGE/MID CAP EQUITY FUND,

(collectively, the "Existing Pooled Funds")

 

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 UBS Global Asset Management (Canada) Co. (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 (i) UBS Global Allocation Trust ("UBS GAT") 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 "Public Funds"), and the requirement to deliver interim financial statements and comparative annual financial statements to the securityholders of (ii) the Existing Pooled Funds and pooled funds that are not reporting issuers hereinafter established and/or managed by the Manager or a successor of the Manager (the "Pooled Funds", together with the Public Funds, 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 Manager is a corporation amalgamated and subsisting under the laws of the Province of Nova Scotia. The Manager is, or will be, the manager of the Funds.

(b) UBS GAT is a trust created under the laws of the Province of Ontario and is a mutual fund corporation under the Income Tax Act (Canada) and a non-redeemable investment fund within the meaning of Rule 14-501 of the Ontario Securities Commission (the "Commission").

(c) UBS GAT is a reporting issuer or the equivalent thereof in each Jurisdiction. The Existing Pooled Funds are organized under the laws of Ontario. None of the Existing Pooled Funds are reporting issuers in the Jurisdictions.

(d) Pursuant to an Order of the Commission dated February 27, 2004, the Existing Pooled Funds are exempt from the requirements to file interim and comparative financial statements with the Commission, subject to certain conditions.

(e) Each of the Public Funds is required to deliver to each holder of its securities ("Securityholders") comparative annual financial statements within 140 days of its financial year-end, in the prescribed form pursuant to the Legislation. The financial year-end date for UBS GAT is December 15.

(f) In Ontario, each of the Pooled Funds is required to deliver to each holder of its securities ("Securityholders") (i) interim financial statements within 60 days of the applicable interim period, and (ii) comparative annual financial statements within 140 days of its financial year-end, in the prescribed form pursuant to the Legislation. The financial year end date for the Existing Pooled Funds is December 15 or December 31 depending on the particular Fund.

(g) The Manager will send to Securityholders who hold securities of the Public 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 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.ubs.com/e/globalam/canada.html (or any successor website), 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.

(h) The Manager will send to Securityholders who hold securities of the Pooled Funds in client name (the "Direct Securityholders") in each year, a notice advising them that they will not receive the interim or annual financial statements of the Funds for the year then ended 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 interim or comparative annual financial statements. The notice will advise the Direct Securityholders how financial statements can be obtained. The Manager will send such financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.

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

(j) Securityholders will be able to access interim and annual financial statements of the Pooled Funds, and annual financial statements of the Public Funds on the website of the Manager: www.ubs.com/e/globalam/canada.html (or any successor website) or by calling the Manager's toll-free phone line at 1-866-827-9200 and Securityholders of the Public Funds will also be able to access the annual financial statements of the Public Funds on the SEDAR website.

(k) There would be substantial cost savings if the Funds are not required to print and mail financial statements to those Direct Securityholders who do not want them.

(l) 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 or interim 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 Funds' interim and annual financial statements for that financial year.

(m) 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 Public 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;

(a) THE DECISION of the Decision Makers pursuant to the Legislation is that until NI 81-106 comes into force, in all the Jurisdictions, the Public Funds shall not be required to deliver their comparative annual financial statements, and in Ontario, the Pooled Funds shall not be required to deliver their interim financial statements or their comparative annual financial statements, to their Direct Securityholders other than those Direct Securityholders who have requested to receive them provided that: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 the 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 the 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 Funds' 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.

August 23, 2004.

"Susan Wolburgh Jenah"
"H. Lorne Morphy"