Mutual Reliance Review System for Exemptive Relief Application -- Extension of distribution beyond lapse date for certain funds until the effective date of the mergers of the funds.
Applicable Statutory Provisions
Securities Act, R.S.O 1990, c. S.5, as am., s. 147.
July 15, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION
OF BRITISH COLUMBIA, ALBERTA,
SASKATCHEWAN, MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,
NOVA SCOTIA, PRINCE EDWARD ISLAND, NEWFOUNDLAND AND LABRADOR,
YUKON AND NUNAVUT (THE JURISDICTIONS)
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
CI CANADIAN SMALL CAP FUND,
CI ASIAN DYNASTY FUND, BPI GLOBAL EQUITY CORPORATE CLASS,
BPI INTERNATIONAL EQUITY FUND, BPI INTERNATIONAL EQUITY RSP FUND,
BPI INTERNATIONAL EQUITY CORPORATE CLASS (collectively, the CI Funds),
CLARICA PREMIER BOND FUND,CLARICA SUMMIT DIVIDEND GROWTH FUND,
CLARICA CANADIAN BLUE CHIP FUND, CLARICA CANADIAN DIVERSIFIED FUND,
CLARICA SUMMIT CANADIAN EQUITY FUND,
CLARICA SUMMIT GROWTH AND INCOME FUND, CLARICA SUMMIT FOREIGN EQUITY FUND,
CLARICA CANADIAN EQUITY FUND, CLARICA PREMIER INTERNATIONAL FUND AND
CLARICA US SMALL CAP FUND (collectively, the Clarica Funds)
(the CI Funds and Clarica Funds, collectively, the Funds)
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from CI Mutual Funds Inc. (CI), the manager of the Funds for a decision under the securities legislation of the Jurisdictions (the Legislation) for
• an exemption that the time limits pertaining to the distribution of securities under the simplified prospectus and annual information form dated July 23, 2004 of CI Mutual Funds Inc., as amended from time to time, (collectively, the CI Prospectus), and the simplified prospectus and annual information form dated July 15, 2004 of the Clarica Funds, as amended from time to time, (collectively, the Clarica Prospectus) be extended to permit the continued distribution of securities of the Funds until the Effective Date of the Mergers, which date shall be no later than August 8, 2005 (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. Each CI Fund currently distributes its securities in each of the Jurisdictions pursuant to the CI Prospectus that was prepared and filed in accordance with Canadian securities regulatory requirements. The earliest lapse date of the CI Prospectus under the Legislation is July 23, 2005.
2. Each Clarica Fund currently distributes its securities in each of the Jurisdictions pursuant to the Clarica Prospectus that was prepared and filed in accordance with Canadian securities regulatory requirements. The earliest lapse date of the Clarica Prospectus under the Legislation is July 15, 2005.
3. Each Fund is a reporting issuer as defined in the Legislation and is not in default of any of the requirements of such Legislation.
4. There have been no material changes in the affairs of any CI Fund since the filing of the CI Prospectus, other than those for which amendments have been filed. Accordingly, the CI Prospectus represents current information regarding each CI Fund.
5. There have been no material changes in the affairs of any Clarica Fund since the filing of the Clarica Prospectus, other than those for which amendments have been filed. Accordingly, the Clarica Prospectus represents current information regarding each Clarica Fund.
6. On or about July 30, 2005 (the "Effective Date"), CI intends to merge the 16 Funds into other mutual funds managed by CI in order to rationalize the line-up of funds managed by CI and thereby eliminate duplicative funds and reduce carrying costs. Such mergers are referred to as the "Mergers". CI issued a press release on May 30, 2005 and filed a material change report and amendments to the CI Prospectus and Clarica Prospectus announcing the proposed Mergers, as contemplated by sections 5.6(1)(g) and 5.10 of National Instrument 81-102 ("NI 81-102").
7. The Mergers will be effected in accordance with the requirements of NI 81-102 including, without limitation, obtaining the approval of securityholders of the Funds as contemplated by section 5.1(f) of NI 81-102 and the approval of the Decision Makers to the extent not already provided by section 5.6(1) of NI 81-102.
8. The requested lapse date extension will not affect the accuracy of the information in the CI Prospectus or the Clarica Prospectus and therefore will not be prejudicial to the public interest.
9. A renewal prospectus was filed by CI for the mutual funds distributing securities under the CI Prospectus and Clarica Prospectus not the subject matter of the Mergers. A final renewal prospectus for these mutual funds was receipted June 23, 2005.
10. If the Requested Relief in respect of the Funds is not granted, CI will be required to file a renewal prospectus for the Funds, notwithstanding that the Funds will be terminated on or about the Effective Date of the Mergers. The financial costs and time involved in producing, filing and printing a prospectus for the Funds would be unduly costly. It may also cause confusion among investors who may assume that the Funds continue to be available for purchase after the Effective Date of the Mergers.
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 the Requested Relief is granted.