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.
Securities Act, R.S.O. 1990, c. s.5 as am., ss. 74(1).
Regulation made under the Securities Act, R.R.O. Reg. 1015, as am.
National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR), s. 2.1(1)1.
IN THE MATTER OF
THE SECURITIES ACT (ONTARIO), R.S.O. 1990,
CHAPTER S.5 AS AMENDED (THE "ACT")
IN THE MATTER OF
LEGG MASON CANADA INC.
POOLED FUNDS LISTED IN SCHEDULE A
(THE "EXISTING POOLED FUNDS")
(Subsection 147 of the Act)
UPON the application (the "Application") of Legg Mason Canada Inc. ("Legg Mason"), the manager of the Existing Pooled Funds and other pooled funds established or to be established and managed by Legg Mason from time to time (collectively, the "Pooled Funds"), to the Ontario Securities Commission (the "Commission") for an order pursuant to subsection 147 of the Act exempting the Pooled Funds from filing with the Commission the interim and annual financial statements prescribed by sections 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 Legg Mason having represented to the Commission that:
1. Legg Mason is a corporation under the laws of Ontario with its head office in Toronto, Ontario. Legg Mason is, or will be, the manager of the Pooled Funds. Legg Mason is registered with the Commission as an advisor in the categories of investment counsel and portfolio manager, and as a dealer in the category of mutual fund dealer, and has an exemption from membership in the Mutual Fund Dealers Association.
2. The Pooled Funds are, or will be, open-end mutual fund trusts established under the laws of Ontario. The Pooled Funds will not be reporting issuers in any province or territory of Canada. Units of the Pooled Funds are, or will be, distributed in each of the provinces and territories of Canada without a prospectus pursuant to exemptions from the prospectus delivery requirements of applicable securities legislation.
3. The Pooled Funds fit within the definition of "mutual fund in Ontario" in section 1(1) of the Act and are thus required to file with the Commission interim financial statements under section 77(2) of the Act and comparative annual financial statements under section 78(1) of the Act (collectively, the "Financial Statements").
4. While the Pooled Funds are structured as mutual funds, they are not public mutual funds. The Pooled Funds are not reporting issuers and are not sold to the general public.
5. Unitholders of the Pooled Funds ("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 or rules made thereunder (the "Regulation"). Legg Mason and the Pooled Funds may 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 statements of portfolio transactions have been omitted, the "Permitted Financial Statements").
6. 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 the Unitholder, the request shall be carried out while the information continues to be omitted from the subsequent Financial Statements until the Unitholder requests, or agrees to, termination of the arrangement or is no longer a Unitholder.
7. Section 2.1(1)1 of National Instrument 13-101 - System for Electronic Document Analysis and Retrieval (SEDAR) ("Rule 13-101") requires that every issuer required to file a document under securities legislation make its filing through SEDAR. The Financial Statements 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 exempted from the requirements in sections 77(2) and 78(1) of the Act to file the Financial Statements with the Commission provided:
(a) In the absence of other regulatory relief, the Pooled Funds will prepare and deliver to the Unitholders, 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) Legg Mason will provide a list of the Pooled Funds relying on this Order to the Investment Funds Branch of the Commission on an annual basis;
(e) Unitholders will be notified that the Pooled Funds are exempted 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 in 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 sections 77(2) and 78(1) of the Act.
February 18, 2005.
"David L. Knight"
Legg Mason Canada Liquidity Plus Pool
Legg Mason Brandywine Small/Mid Cap U.S. Value Equity Pool
Legg Mason Brandywine Small/Mid Cap U.S. Value Equity RP Pool
Legg Mason Private Capital Management U.S. Equity Pool
Legg Mason Canada Treasury Plus Pool
Legg Mason Canada Income Plus Pool
Legg Mason Fixed Income Alpha Pool
Legg Mason Canadian Equity Alpha Pool
Legg Mason Balanced Alpha Pool
Legg Mason U.S. Value RP Pool
Legg Mason Absolute Return Master Trust
Legg Mason Absolute Return Fund