MRRS Exemptive Relief Application -- Variation order varying prior order of various mutual funds to permit exemption, until proposed National Instrument 81-106 is in force, from the requirement to deliver comparative annual financial statements of those mutual funds to securityholders unless requested by the securityholders.
Securities Act (Ontario), R.S.O. 1990 c. S.5, as am., s. 144.
February 22, 2005
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
ELLIOTT & PAGE LIMITED ("EPL")
IN THE MATTER OF
ELLIOTT & PAGE MONEY FUND
ELLIOTT & PAGE ACTIVE BOND FUND
ELLIOTT & PAGE CANADIAN UNIVERSE BOND FUND
ELLIOTT & PAGE CORPORATE BOND FUND
ELLIOTT & PAGE DIVIDEND FUND
ELLIOTT & PAGE MONTHLY HIGH INCOME FUND
ELLIOTT & PAGE GROWTH & INCOME FUND
ELLIOTT & PAGE VALUE EQUITY FUND
ELLIOTT & PAGE CANADIAN EQUITY FUND
ELLIOTT & PAGE GENERATION WAVE FUND
ELLIOTT & PAGE SECTOR ROTATION FUND
ELLIOTT & PAGE GROWTH OPPORTUNITIES FUND
ELLIOTT & PAGE SMALL-CAP VALUE FUND
ELLIOTT & PAGE AMERICAN GROWTH FUND
ELLIOTT & PAGE U.S. MID-CAP FUND
ELLIOTT & PAGE GLOBAL MULTISTYLE FUND
ELLIOTT & PAGE ASIAN GROWTH FUND
E&P RSP AMERICAN GROWTH FUND
E&P RSP U.S. MID-CAP FUND AND
E&P RSP MIX SEAMARK TOTAL GLOBAL EQUITY FUND
E&P MANULIFE BALANCED ASSET ALLOCATION PORTFOLIO
E&P MANULIFE MAXIMUM GROWTH ASSET ALLOCATION PORTFOLIO
E&P MANULIFE TAX-MANAGED GROWTH PORTFOLIO
ELLIOTT & PAGE CORE CANADIAN EQUITY FUND; AND
ELLIOTT & PAGE DIVERSIFIED FUND;
(INDIVIDUALLY, A "FUND", AND COLLECTIVELY, THE "FUNDS");
MIX AIM AMERICAN MID-CAP GROWTH CLASS
MIX AIM CANADIAN FIRST CLASS
MIX ELLIOTT & PAGE GROWTH OPPORTUNITIES CLASS
MIX ELLIOTT & PAGE U.S. MID-CAP CLASS
MIX F.I. CANADIAN DISCIPLINED EQUITY CLASS
MIX F.I. GROWTH AMERICA CLASS
MIX F.I. INTERNATIONAL PORTFOLIO CLASS
MIX SEAMARK TOTAL CANADIAN EQUITY CLASS
MIX SEAMARK TOTAL GLOBAL EQUITY CLASS
MIX SEAMARK TOTAL U.S. EQUITY CLASS
MIX TRIMARK GLOBAL CLASS
MIX TRIMARK SELECT CANADIAN CLASS
MIX SHORT TERM YIELD CLASS
MIX STRUCTURED BOND CLASS
MIX CANADIAN EQUITY VALUE CLASS
MIX CANADIAN LARGE CAP CORE CLASS
MIX CANADIAN LARGE CAP GROWTH CLASS
MIX CANADIAN LARGE CAP VALUE CLASS
MIX GLOBAL EQUITY CLASS
MIX GLOBAL SECTOR CLASS
MIX GLOBAL VALUE CLASS
MIX INTERNATIONAL GROWTH CLASS
MIX INTERNATIONAL VALUE CLASS
MIX JAPANESE CLASS
MIX CHINA OPPORTUNITIES CLASS
MIX U.S. LARGE CAP CORE CLASS
MIX U.S. LARGE CAP GROWTH CLASS
MIX U.S. LARGE CAP VALUE CLASS, AND
MIX U.S. MID-CAP VALUE CLASS
(INDIVIDUALLY, A "MIX FUND", AND COLLECTIVELY, THE "MIX FUNDS")
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application from EPL for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") for a variation of the decision issued to the Funds and the MIX Funds on February 2, 2004 (the "Prior Decision"), to continue the relief from the requirement to deliver comparative annual financial statements of the Funds and the MIX Funds to certain Securityholders of the Funds and the MIX Funds unless they have requested to receive them, until such time as proposed National Instrument 81-106 - Investment Fund Continuous Disclosure ("NI 81-106") comes into force;
Under the Mutual Reliance Review System ("MRRS") 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 EPL:
1. Each Fund is an open-ended mutual fund trust established under the laws of Ontario. Each MIX Fund is a class of shares of Manulife Investment Exchange Funds Corp., an open-ended mutual fund corporation incorporated under the laws of Ontario.
2. EPL is a corporation incorporated under the laws of Ontario with its registered office located in Toronto, Ontario and is the manager, trustee, primary portfolio adviser, principal distributor, promoter and the registrar and transfer agent of the Funds. EPL is also the manager, primary portfolio adviser, principal distributor, promoter and the registrar and transfer agent of the MIX Funds.
3. The Funds and the MIX Funds are reporting issuers in each of the Jurisdictions and are not in default of any requirements of the Legislation.
4. As many as five classes of units of each Fund and as many as three series of shares of each MIX Fund are offered for sale continuously to the public in each of the provinces and territories of Canada pursuant to a combined simplified prospectus and annual information form dated August 24, 2004, as amended.
5. Each of the Funds and the MIX Funds is required to deliver annually, within 140 days of its financial year-end, to each holder of its securities ("Securityholders"), comparative financial statements in the prescribed form pursuant to the Legislation. The financial year-ends of the Funds and the MIX Funds are December 31 and April 30, respectively.
6. EPL proposes to send to Securityholders who hold securities of the Funds and the MIX Funds in client name (whether or not EPL is the dealer) (the "Direct Securityholders"), either together with their semi-annual account statement or otherwise, a notice advising them that they will not receive annual financial statements unless they complete and return a request for such documents (the "Request"). The Request will form part of the notice and may be returned by pre-paid mail. The notice will advise the Direct Securityholders that the annual financial statements of the Funds and the MIX Funds may be found on the websites referred to in paragraph 8 and downloaded. EPL would send the annual financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.
7. Securityholders who hold their securities in the Funds and the MIX Funds through a nominee will be dealt with pursuant to National Instrument 54-101 -- Communication with Beneficial Owners of Securities of a Reporting Issuer.
8. Securityholders will be able to access the annual financial statements of the Funds and the MIX Funds either on the SEDAR website or at www.manulife.ca/investments or by calling EPL's toll-free phone line. Top ten holdings which are updated on a monthly basis will also be accessible to Securityholders at www.manulife.ca/investments or by calling EPL's toll-free phone line.
9. There would be substantial cost savings if the Funds and the MIX Funds are not required to print and mail annual financial statements to those Direct Securityholders who do not want them.
10. In September, 2002, the Canadian Securities Administrators (the "CSA") published for comment proposed NI 81-106 which, among other things, would permit a mutual fund to not deliver annual financial statements to those of its Securityholders who do not request them, if the mutual fund provides 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.
11. NI 81-106 would also require a mutual 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 mutual fund.
12. The Prior Decision granted to the Funds and the MIX Funds exemptive relief from the requirement to deliver comparative annual financial statements of such funds to the Direct Securityholders unless the Direct Securityholders requested to receive them. The relief was granted for only one annual reporting period based upon the Decision Makers' assumption that NI 81-106 would be in force by the end of 2004.
13. CSA Staff Notice 81-313 states that it is anticipated that the requirements of NI 81-106 for annual financial statements will apply for financial years ending on or after June 30, 2005.
14. As a result of NI 81-106 not yet being in force, the Funds and the MIX Funds that were granted relief under the Prior Decision will require the relief to be extended until such time as NI 81-106 comes into force in order to permit during the interim period the Funds and the MIX Funds affected by the Prior Decision to not have to deliver their comparative annual financial statements to the Direct Securityholders unless the Direct Securityholders requested to receive them.
15. Extending the relief granted to the Funds and the MIX Funds in the Prior Decision would not be prejudicial to the public interest since it would be consistent with the proposed requirements under NI 81-106 and, moreover, consistent with relief that has been granted to numerous other mutual fund families.
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 under the Legislation is that
1. The Prior Decision is hereby varied such that the Funds, the MIX Funds and mutual funds created subsequent to the date hereof that are offered by way of simplified prospectus and managed by EPL or a division thereof shall not be required to deliver their comparative annual financial statements to the Direct Securityholders other than those Direct Securityholders who have requested to receive the financial statements until such time as NI 81-106 comes into force provided that the same terms and conditions as in the Prior Decision shall continue to apply.
2. This Decision shall terminate upon NI 81-106 coming into force.