Mutual Reliance Review System for Exemptive Relief Applications -- Relief granted from the requirement for income trust to file certain interim financial statements with a business acquisition report provided that the business acquisition report will include the financial statements pertaining to the acquired business that were included in the income fund's final prospectus, and provided that the interim financial statements are filed separtely.
National Instrument 51-102, Continuous Disclosure Obligations, Part 8.
Ontario Securities Commission Rule 41-501, General Prospectus Requirements.
March 7, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO,
QUÉBEC, NEW BRUNSWICK, NOVA SCOTIA
AND NEWFOUNDLAND AND LABRADOR (THE JURISDICTIONS)
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
THE DATA GROUP INCOME FUND (THE FILER)
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for: (i) a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption from the requirement that certain financial statements prescribed by section 8.4 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) be filed with the business acquisition report prepared by the Filer in connection with the Filer's acquisition of all of the securities and assets of Data Business Forms Limited (DBFL) (the Acquisition), and (ii) in Quebec, for a revision of the general order that will provide the same result as an exemption order (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) the 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 a trust established and governed pursuant to a declaration of trust dated November 15, 2004, as amended and restated on December 14, 2004.
2. The Filer's head office is located at 9195 Torbram Road, Brampton, Ontario, L6S 6H2.
3. An Application is not being made with the securities regulatory authorities in British Columbia, Prince Edward Island, Yukon, the Northwest Territories or Nunavut (together with the Decision Makers, the Regulators) as British Columbia Instrument 51-801 exempts issuers from Part 8 of NI 51-102 in British Columbia, and NI 51-102 has not been adopted in the other jurisdictions.
4. The Filer is a reporting issuer, or the equivalent, in all the provinces and territories of Canada and the trust units of the Filer (Units) are listed on the Toronto Stock Exchange.
5. To the best of its knowledge, the Filer is not in default of any applicable requirement of the Securities Act (Ontario) (the Act) or equivalent legislation of the other Jurisdictions and is not on the list of defaulting reporting issuers maintained pursuant to subsection 72(9) of the Act or equivalent provisions of the other Jurisdictions.
6. On November 15, 2004, the Filer filed a preliminary prospectus (the Preliminary Prospectus) for its initial public offering of Units (the IPO) which disclosed, among other things, that the Filer has been established to acquire and hold all of the common shares of DBFL. A mutual reliance review system decision document evidencing the issue of preliminary receipts for the Preliminary Prospectus by the Regulators was issued by the Ontario Securities Commission on November 15, 2004.
7. On November 26, 2004, the Filer filed an amended and restated preliminary prospectus for the IPO, which contained substantially the same disclosure as the Preliminary Prospectus. A mutual reliance review system decision document evidencing the issue of receipts for the amended and restated preliminary prospectus by the Regulators was issued by the Ontario Securities Commission on November 29, 2004.
8. On December 14, 2004, the Filer filed a final prospectus (the Prospectus) for the IPO, which contained substantially the same disclosure as the Preliminary Prospectus. A mutual reliance review system decision document, evidencing the issue of final receipts for the Prospectus by the Regulators, was issued by the Ontario Securities Commission on December 15, 2004.
9. The Prospectus contained full, true and plain disclosure with respect to the Filer, DBFL and the Acquisition and the prescribed financial statement disclosure, including the following financial statement disclosure for "significant probable acquisitions" pursuant to section 6.4 of Ontario Securities Commission Rule 41-501 General Prospectus Requirements in respect of the Acquisition (the Prospectus Financial Statements):
(i) audited financial statements of DBFL for the years ended April 30, 2004, 2003 and 2002 (with balance sheets as at April 30, 2004 and 2003), together with an auditors' report thereon;
(ii) unaudited financial statements of DBFL for the three months ended July 31, 2004 and 2003 (with a balance sheet as at July 31, 2004); and
(iii) pro forma consolidated financial statements of the Filer, including (a) a consolidated balance sheet as at July 31, 2004, and (b) consolidated statements of operations for the year ended April 30, 2004 and for the period from May 1, 2004 to July 31, 2004, together with a compilation report.
10. On December 21, 2004, the IPO was completed and the Filer used the proceeds of the IPO to complete the Acquisition as contemplated by the Prospectus.
11. The Acquisition constitutes a "significant acquisition" of the Filer for the purposes of NI 51-102, requiring the Filer to file a BAR on or before March 7, 2005 pursuant to section 8.2 of NI 51-102.
12. Unless otherwise exempt, the Filer is required, pursuant to section 8.2 of NI 51-102, to file a BAR within 75 days after December 21, 2004, which would include the financial statement disclosure set out in section 8.4 of NI 51-102 in respect of the Acquisition.
13. Compliance with the financial statement disclosure requirements of OSC Rule 41-501 does not necessarily satisfy the financial statement disclosure requirements under Part 8 of NI-51-102.
14. No material change to the Filer, the Acquisition or DBFL occurred between the date of the Prospectus and the date of the Acquisition.
Each of the Decision Makers is satisfied that the test contained in the Legislation 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 the business acquisition report filed by the Filer includes the Prospectus Financial Statements and provided that the Filer files in the Jurisdictions unaudited comparative financial statements of DBFL for the six months ended October 31, 2004 by March 31, 2005.