Exemption granted to a participating dealer from the "equity interest" disclosure and consent provisions of National Instrument 81-105 Mutual Fund Sales Practices in connection with a small equity interest held by one employee of the dealer in a member of the organization of a mutual fund, subject to certain specified conditions.
National Instrument 81-105 Mutual Fund Sales Practices, subsections 8.2(3) and 8.2(4), section 9.1.
January 6, 2005
IN THE MATTER OF
NATIONAL INSTRUMENT 81-105 MUTUAL FUND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
PERFORMA FINANCIAL GROUP LIMITED
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in British Columbia, Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, the Yukon Territories, the Northwest Territories, and Nunavut (the "Jurisdictions") has received an application from the Filer on its own behalf and on behalf of its current and future representatives from time to time (the "Representatives") for a decision that the point of sale disclosure and consent requirements contained in NI 81-105 (the "Legislation") shall not apply in respect of the equity interest of an employee of the Filer in ClaringtonFunds Inc. (the "Requested Relief").
Under the Mutual Reliance Review System for Exemptive Relief Applications:
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) this MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following facts represented by the Filer:
1. The Filer is registered as a mutual fund dealer (or the equivalent), in all of the provinces of Canada, other than Manitoba, and as a limited market dealer in Ontario and may in the future become registered in more or all of the remaining jurisdictions in Canada.
2. The spouse of an employee of the Filer (the "Spouse") beneficially owns 0.01901% of the outstanding shares (the "Clarington Equity Interest") of ClaringtonFunds Inc. ("Clarington"). The said employee (the "Employee") is registered as a representative in Alberta and is engaged in the employment of the Filer in the capacity of Advisor Relations and is not an officer or director of the Filer and does not otherwise have a position of authority or supervision over the Representatives.
3. Clarington is a member of the organization (as that term is defined in NI 81-105) of the Clarington group of mutual funds (the "Clarington Funds"). The Clarington Funds are, and will continue to be, sold in all provinces and territories under one or more simplified prospectuses.
4. No Representative of the Filer holds shares of Clarington or has an equity interest (as defined in NI 81-105) of any other member of the organization of the Clarington Funds. The Spouse does not have an equity interest in any other member of the organization of the Clarington Funds.
5. NI 81-105 would require: (a) the Representatives of the Filer to give those clients who wish to acquire securities of the Clarington Funds a disclosure statement outlining the Clarington Equity Interest of the spouse of the Employee, and (b) each of the Representatives of the Filer to obtain a consent from any client wishing to acquire securities of the Clarington Funds.
Each of the Decision Makers is satisfied that the test contained in NI 81-105 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 Requested Relief is granted provided that:
1. In the event the Employee assumes a position of authority or supervision over the Representatives, the Representatives and the Filer comply with the Legislation.
2. Where clients of the Filer deal directly with the Employee in connection with the purchase of securities of Clarington Funds, the Filer and the Employee comply with the requirements of the Legislation.