Mutual Reliance Review System for Exemptive Relief Applications -- relief from requirement to provide to clients a Statement of Policies and to obtain specific and informed written consent from clients once in each twelve-month period with respect to certain funds -- subject to conditions.
Applicable Ontario Legislation
Ontario Regulation 1015, R.R.O. 1990, s. 227(2)(b), 233.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO, ALBERTA AND NOVA SCOTIA
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
INTEGRA CAPITAL LIMITED
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the Decision Maker) in each of the Provinces of Ontario, Alberta and Nova Scotia (the Jurisdictions) has received an application from Integra Capital Limited (Integra) for a decision under the securities legislation of the Jurisdictions (the Legislation) that certain of the conflict provisions contained in applicable legislation, namely:
(a) the requirements that a registrant prepare a conflict of interest rules statement (or the equivalent) (the Conflicts Statement) in the required form, revise its Conflicts Statement in the event of any significant change in the information, provide a copy of the current version of its Conflicts Statement and any revision of its Conflicts Statement to its customers and clients and file its Conflicts Statement and any revision of its Conflicts Statement with the applicable Decision Makers (the Disclosure Requirement); and
(b) the restriction that a registrant acting as an adviser, exercising discretionary authority with respect to the investment portfolio or account of a client, must not purchase or sell 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 it provides certain disclosure to the client and obtains the requisite specific and informed written consent of the client (the Consent Requirement);
should not apply to Integra in connection with the distribution of units of mutual funds established or to be established by Integra and managed by Integra, its affiliates, or associates, subject to certain conditions.
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, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions;
AND WHEREAS Integra has represented to the Decision Makers that:
1. Integra is a corporation incorporated under the laws of Ontario and is registered in Ontario as an adviser in the categories of investment counsel and portfolio manager, and in equivalent categories in British Columbia, Alberta, New Brunswick and Nova Scotia. In addition, Integra is registered in Ontario as a limited market dealer.
2. Integra is the manager, portfolio adviser and promoter of mutual funds which are sold pursuant to a prospectus or on a private placement basis in each of the Jurisdictions.
3. Integra manages some of its clients' assets on a discretionary basis with segregated, separate portfolios of securities for each client and may trade in the securities of one or more mutual funds managed or to be managed by Integra or an affiliate or associate of Integra (the Funds). Integra may also act as an adviser to clients who have not entered into discretionary management agreements with Integra in connection with such clients' investment in one or more Funds.
4. Discretionary management clients of Integra enter into a discretionary investment management account agreement with Integra. Each discretionary investment management account agreement will contain specific disclosure of the relationship between Integra and the Funds and each discretionary management client will specifically consent in writing to Integra investing in one or more of the Funds; Integra believes that in the circumstances the consent of its discretionary management clients is informed.
5. All clients of Integra receive a Conflicts Statement which lists the related issuers of Integra. These related issuers include the Funds. In the event of a significant change in the Conflicts Statement, Integra will provide to each of its clients a copy of the revised version of, or amendment to, the Conflicts Statement.
6. Units of each of the Funds may be offered on a continuous basis and will be acquired by residents of the Jurisdictions either under a prospectus filed by the Fund or on a private placement basis.
7. Integra does not and will not act as an adviser, dealer or underwriter in respect of securities of Integra or of a related issuer of Integra, or in the course of a distribution, in respect of securities of connected issuers of Integra other than in connection with the distribution of units of the Funds; the Funds do not hold and will not hold securities of any related issuer of Integra, or in the course of a distribution, securities of a connected issuer of Integra, other than the securities of another Fund.
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 pursuant to the Legislation is that Integra is exempt from the Consent Requirement and the Disclosure Requirement under the applicable Legislation in respect of the exercise of discretionary management authority to invest in the securities of the Funds set out in Integra's Conflicts Statement provided Integra has secured the specific and informed consent of the discretionary management client in advance of the exercise of discretionary authority in respect of the Funds.
August 4, 2004.
"Paul M. Moore"
"Wendell S. Wigle"