Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Hybrid Review -- Extension of the lapse date of the simplified prospectus for 52 days until completion of the Funds Reorganization.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure, s. 2.5(7).

Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).

December 16, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE FÉDÉRATION DES CAISSES DESJARDINS

DU QUÉBEC

(the "Filer")

AND

IN THE MATTER OF

THE FUNDS LISTED IN SCHEDULE "A"

(each a "Fund", together the "Funds")

DECISION

Background

The securities regulatory authority in Quebec has received an application from the Filer, on behalf of the Funds, for a decision under the securities legislation of the jurisdiction of the principal regulator (the "Legislation") for relief under section 2.5(7) of National Instrument 81-101 that the time limits be extended to enable the Funds to continue the distribution of their securities to the time limits that would apply if the lapse date of the simplified prospectus and annual information form of the Funds was March 8, 2010 (the "Passport Exemption").

The securities regulatory authority or regulator in Ontario (the "Coordinated Exemptive Relief Decision Maker") has received an application from the Filer, on behalf of the Funds, for a decision under the securities legislation of Ontario for relief under section 62(5) of the Securities Act (Ontario) (the "Act") that the time limits be extended to enable the Funds to continue the distribution of their securities to the time limits that would apply if the lapse date of the simplified prospectus and annual information form of the Funds was March 8, 2010 (the "Coordinated Exemptive Relief").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for hybrid applications):

a) the Autorité des marchés financiers du Québec is the principal regulator for this application;

b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in each of the other provinces and territories of Canada except Ontario;

c) the decision is the decision of the principal regulator; and the decision evidences the decision of the Coordinated Exemptive Relief Decision Maker.

Interpretation

Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

"NI 81-101" means National Instrument 81-101 Mutual Fund Prospectus Disclosure

"NI 81-102" means National Instrument 81-102 Mutual Funds

"NI 81-106" means National Instrument 81-106 Investment Fund Continuous Disclosure

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is the manager and trustee of the Funds.

2. The Funds are open-ended mutual fund trusts established under the laws of Québec pursuant to a declaration of trust.

3. The Funds have been authorized to distribute their securities in each of the provinces and territories of Canada under a simplified prospectus and annual information form dated January 15, 2009 as amended by amendments dated June 2, 2009.

4. The Funds are reporting issuers under the laws of each of the provinces and territories of Canada. None of the Funds is in default of any of the requirements of the Legislation.

5. Pursuant to the Legislation and the Act, the lapse date for the distribution of securities of the Funds is currently January 15, 2010. In each jurisdiction, provided a pro forma simplified prospectus is filed 30 days prior to January 15, 2010 (by December 16, 2009), a final version of the simplified prospectus is filed by January 25, 2010, and a receipt for the simplified prospectus is issued by the securities regulatory authorities by February 4, 2010, securities of the Funds may be distributed without interruption throughout this prospectus renewal period.

6. The Filer is contemplating mergers of funds and mandate changes that will affect the Funds (the "Reorganization"), and which, should they occur, will be considered by the directors of the Filer at a meeting to be held on or about January 12, 2010 and, when approved by the directors of the Filer, by securityholders of the applicable Funds at meetings to be called for such purposes on or about March 8, 2010 and would take effect no later than March 18, 2010.

7. Any Fund mergers and mandate changes that occur will be effected in accordance with the requirements of NI 81-102 and NI 81-106 including, without limitation, filing appropriate amendments to the simplified prospectus and annual information form of the Funds and seeking Independent Review Committee, securityholders and regulatory approval where necessary.

8. The Filer wishes to extend the lapse date for the Funds to March 8, 2010 in order to provide time for the Reorganization to be considered, planned and implemented such that the renewed simplified prospectus and annual information can be filed on or about March 18, 2010 and will include appropriate post-Reorganization disclosure.

9. The Filer proposes to file a pro forma simplified prospectus and annual information form in respect of all the Funds by February 6, 2010 and the final simplified prospectus and annual information form in respect of all the Funds on or about March 18, 2010, with the final receipt to issue on or about that date.

10. In the absence of this decision, NI 81-101 and section 62(2) of the Act require that the Funds would have to file a final simplified prospectus and annual information form by January 25, 2010 and receive a final receipt by February 4, 2010.

11. Since June 2, 2009, the date of the most recently filed amendments to the simplified prospectus and annual information form for the Funds, no undisclosed material change has occurred in respect of the Funds. Accordingly, such prospectus and annual information form, as amended, represent the current information regarding each of the Funds. The extension requested will not affect the currency or accuracy of the information contained in the simplified prospectus and annual information form. Up to date financial information about the Funds will be available to investors within the audited annual financial statements and management report of fund performance for the period ended September 30, 2009, which will be filed by December 29, 2009. As a result, the extension of the lapse date will not be prejudicial to the public interest.

Decision

Each of the principal regulator and the Coordinated Review Decision Maker is satisfied that the decision meets the test set out in the Legislation and the Act, respectively, for the relevant regulator or securities regulatory authority to make the decision.

The decision of the principal regulator under the Legislation is that the Passport Exemption is granted.

The decision of the Coordinated Review Decision Maker under the Act is that the Coordinated Exemptive Relief is granted.

"Josée Deslauriers"
Director, Investment Funds and Continuous Disclosure
Autorité des marchés financiers

 

SCHEDULE "A"

The Funds

Desjardins Money Market Fund
Desjardins Short-Term Income Fund
Desjardins Canadian Bond Fund
Desjardins Enhanced Bond Fund
Desjardins Capital Yield Bond Fund
Desjardins Northwest Specialty Global High Yield Bond Fund
Desjardins Canadian Balanced Fund
Desjardins Québec Balanced Fund
Desjardins Dividend Income Fund
Desjardins Dividend Growth Fund
Desjardins Canadian Equity Value Fund
Desjardins Canadian Equity Fund
Desjardins Fidelity True North® Fund
Desjardins Canadian Small Cap Equity Fund
Desjardins Northwest Specialty Equity Fund
Desjardins American Equity Value Fund
Desjardins American Equity Growth Fund
Desjardins Global Equity Value Fund
Desjardins Global All Cap Equity Fund
Desjardins Overseas Equity Value Fund
Desjardins Global Real Estate Fund
Desjardins Global Small Cap Equity Fund
Desjardins Emerging Markets Fund
Desjardins Alternative Investments Fund
Desjardins Enhanced Alternative Investments Fund
Desjardins Environment Fund
SocieTerra Secure Market Portfolio
SocieTerra Balanced Portfolio
SocieTerra Growth Portfolio
SocieTerra Growth Plus Portfolio