Approval of fund mergers of RSP funds pursuant to subsection 5.5(1)(b) of National Instrument 81-102 Mutual Funds. Mergers not satisfying all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.
National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6.
September 23, 2005
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA,
ONTARIO, QUEBEC,NEW BRUNSWICK, NOVA SCOTIA,
PRINCE EDWARD ISLAND, NEWFOUNDLAND ANDLABRADOR,
YUKON TERRITORY, NORTHWEST TERRITORIES
AND NUNAVUT TERRITORY
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
UNITED FINANCIAL CORPORATION
RSP GLOBAL FIXED INCOME POOL
RSP US EQUITY DIVERSIFIED POOL
RSP INTERNATIONAL EQUITY DIVERSIFIED POOL
(the Terminating Funds)
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Manager and the Terminating Funds (together, the Filer) for a decision under the securities legislation of the Jurisdictions (the Legislation) for approval under section 5.5(1)(b) of National Instrument 81-102 Mutual Funds (NI 81-102) to merge each Terminating Fund into its Continuing Fund (as set out below) as contemplated by applicable Legislation (the Requested Approval).
Under the Mutual Reliance Review System for Exemptive Relief Applications
(a) The Manitoba 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. United Financial Corporation is the manager (the "Manager") of each of the mutual funds ndividually, a "Fund" and, collectively, the "Funds") set out in paragraph 2.
2. The Manager intends to merge the Funds identified below under "Terminating Fund" (individually, a "Terminating Fund" and, collectively, the "Terminating Funds") into the respective Funds (individually, a "Continuing Fund" and, collectively, the "Continuing Funds") identified opposite their names below.
Terminating Fund Continuing Fund RSP Global Fixed Income Pool Global Fixed Income Pool RSP US Equity Diversified Pool US Equity Diversified Pool RSP International Equity Diversified Pool International Equity Diversified Pool
(individually a "Merger" and, collectively, the "Mergers").
3. The Manager believes that each Merger may not satisfy all of the criteria for pre-approved reorganizations and transfers set forth in section 5.6 of NI 81-102.
4. As the principal office of the Manager is in Manitoba, The Manitoba Securities Commission has been selected as the principal regulator for purposes of this application in accordance with the provisions of section 3.2(1) of National Policy 12-201.
5. Each Fund is a reporting issuer as defined in the securities legislation of each province and territory of Canada. Each Terminating Fund currently distributes its securities in each province and territory of Canada pursuant to a simplified prospectus and annual information form dated October 4, 2004, as amended, previously filed with the CSA as SEDAR project no. 682691 (the "Assante Prospectus"). The Manager has filed press releases, material change reports and amendments to the Assante Prospectus to announce the Mergers.
6. The Mergers are being proposed in order to rationalize the line-up of Funds for the benefit of securityholders of the Funds. The anticipated benefits of the Mergers are as follows:
(a) each Terminating Fund and its Continuing Fund are largely duplicative of one another as a result of the elimination of the foreign property restrictions and there will be a savings in brokerage charges through a merger rather than liquidating the portfolio of securities of the Terminating Fund;
(b) securityholders of both the Terminating Funds and Continuing Funds will benefit frombecoming investors in larger mutual funds which will be better able to maintain diversified, well-managed portfolios with a smaller proportion of assets set aside to fund redemptions.
7. Each Terminating Fund will be wound-up as soon as reasonably possible following its Merger.
8. In the opinion of the Manager, each Terminating Fund and its Continuing Fund have substantially similar valuation procedures and, except as noted in the Application, substantially similar fundamental investment objectives and fee structures.
9. Investors in the Terminating Funds will be asked to approve the Mergers at special meetings ofsecurityholders to be held on September 22, 2005 (the "Meetings"). If securityholders approve the Mergers, the Manager intends to effect each Merger after the close of business on September 23, 2005 (the "Effective Date"), subject to regulatory approvals. The cost of effecting the Mergers (consisting primarily of proxy solicitation, printing, mailing, legal and regulatory fees) will be borne by the Manager.
10. Purchases of and transfers to securities of each Terminating Fund will be suspended on or prior to the Effective Date. Following each Merger, periodic investment plans and systematic withdrawal plans which were established with respect to the Terminating Fund will be re-established with respect to its Continuing Fund unless securityholders who are affected by the Merger advise the Manager otherwise. Securityholders may change any periodic investment plan or systematic withdrawal plan at any time and investors in a Terminating Fund who wish to establish a periodic investment plan or systematic withdrawal plan in respect of their holdings of the Continuing Fund may do so following its Merger.
Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make this decision has been met.
The decision of the Decision Makers under the Legislation is that the Requested Approval is granted provided that the Mergers are implemented no later than October 31, 2005.