Securities Law & Instruments

Headnote

Exemption for pooled funds from the requirement to file with the Commission interim financial statements under section 77(2) of the Act and comparative financial statements under section 78(1) of the Act, subject to conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. s.5 as am., ss. 74(1).

Regulations Cited

Regulation made under the Securities Act, R.R.O. Reg. 1015, as am.

Rules Cited

National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR), s. 2.1(1)1.

IN THE MATTER OF

THE SECURITIES ACT

R.S.0. 1990, CHAPTER S5, AS AMENDED (THE "ACT")

AND

IN THE MATTER OF

MAJORICA ASSET MANAGEMENT CORP.

AND

MAJORICA BOND FUND

MAJORICA SHORT TERM INCOME FUND

(TOGETHER THE "EXISTING FUNDS")

 

ORDER

(Section 147 of the Act)

UPON the application (the "Application") of Majorica Asset Management Corp. ("Majorica"), the manager of the Existing Funds, and the Existing Funds to the Ontario Securities Commission (the "Commission") for an order pursuant to section 147 of the Act exempting the Existing Funds and any other pooled fund established and managed by Majorica from time to time (collectively, the "Pooled Funds") from filing with the Commission the interim and comparative financial statements prescribed by subsections 77(2) and 78(1), respectively, of the Act.

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND UPON Majorica having represented to the Commission that:

1. Majorica is a corporation subsisting under the laws of Canada with its registered office in Toronto, Ontario. Majorica is, or will be, the manager of the Pooled Funds. Majorica is registered under the Act as an adviser in the categories of investment counsel and portfolio manager and as a dealer in the category of limited market dealer.

2. The Pooled Funds are not, and will not be, reporting issuers in any province or territory of Canada. Units of the Pooled Funds are, or will be, distributed in certain provinces of Canada without a prospectus pursuant to exemptions from the prospectus delivery requirements of applicable securities legislation.

3. Each Pooled Fund is, or will be, an open-ended mutual fund trust created under the laws of Ontario and a "mutual fund in Ontario" as defined in section 1(1) of the Act. As a result, the Pooled Funds are, or will be, required to file with the Commission interim financial statements under subsection 77(2) of the Act and comparative financial statements under subsection 78(1) of the Act (collectively, the "Financial Statements").

4. Unitholders of the Pooled Funds (the "Unitholders") receive the Financial Statements for the Pooled Funds they hold. The Financial Statements are prepared and delivered to Unitholders in the form and for the periods required under the Act and the Regulation and rules made thereunder (the "Regulation"). Majorica and the Pooled Funds will continue to rely on subsection 94(1) of the Regulation and will omit statements of portfolio transactions from the Financial Statements (such statements from which the statement of portfolio transactions have been omitted, the "Permitted Financial Statements").

5. As required by subsection 94(1) of the Regulation, the Permitted Financial Statements will contain a statement indicating that additional information as to portfolio transactions will be provided to a Unitholder without charge on request to a specified address and,

(a) the omitted information shall be sent promptly and without charge to each Unitholder that requests it in compliance with the indication; and

(b) where a person or company requests that such omitted information be sent routinely to that Unitholder, the request will be carried out while the information continues to be omitted from the subsequent Permitted Financial Statements until the Unitholder requests, or agrees to, termination of the arrangement or is no longer a Unitholder.

6. Paragraph 2(1)1 of National Instrument 13-101 - System for Electronic Document Analysis and Retrieval (SEDAR) requires that every issuer required to file a document under securities legislation make its filing through SEDAR. The Financial Statements and statements of portfolio transactions filed with the Commission thus become publicly available.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS ORDERED by the Commission pursuant to subsection 147 of the Act that the Pooled Funds be exempt from the requirements in subsections 77(2) and 78(1) of the Act to file the Financial Statements with the Commission, provided:

(a) that in the absence of other regulatory relief, the Pooled Funds will prepare and deliver to the Unitholders of the Pooled Funds the Permitted Financial Statements, in the form and for the periods required under the Act and the Regulation;

(b) the Pooled Funds will retain the Financial Statements indefinitely;

(c) the Pooled Funds will provide the Financial Statements to the Commission or any member, employee or agent of the Commission immediately upon request of the Commission or any member, employee or agent of the Commission;

(d) Majorica will provide a list of the Pooled Funds relying on this Order to the Investment Funds Branch on an annual basis;

(e) Unitholders will be notified that the Pooled Funds are exempt from the requirements in sections 77(2) and 78(1) of the Act to file the Financial Statements with the Commission;

(f) in all other aspects, the Pooled Funds will comply with the requirements of Ontario securities law for financial statements; and

(g) this decision, as it relates to the Commission, will terminate after the coming into force of any legislation or rule of the Commission dealing with the matters regulated by subsections 77(2) and 78(1) of the Act.

February 11, 2005.

"Paul M. Moore"
"David L. Knight"