National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, s. 3.1 -- A registrant to early adopt IFRS for purposes of preparing its financial statements required to be delivered to the regulator or regulatory authority pursuant to National Instrument 31-103 Registration Requirements and Exemptions -- The registrant has assessed the readiness of its staff, board, audit committee, and auditors.
Applicable Legislative Provisions
National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency, s. 3.1.
December 7, 2010
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
MAN INVESTMENTS CANADA CORP.
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Filer from the requirements in section 3.1 of National Instrument 52-107 -- Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107) that the financial statements be prepared in accordance with Canadian GAAP (the Exemption Sought), for so long as the Filer prepares its financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS-IASB) except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in International Accounting Standard 27 Consolidated and Separate Financial Statements, as amended from time to time (IAS 27) for the financial periods beginning on or after April 1, 2010 to March 31, 2011.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (together with the Jurisdiction, collectively, the Jurisdictions).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the Canada Business Corporations Act on March 22, 2006.
2. The Filer is not a reporting issuer in any jurisdiction in Canada, as such term is defined in subsection 1(1) of the Securities Act (Ontario).
3. The Filer is registered as an adviser in the category of portfolio manager in Ontario and Alberta. The Filer is also registered as a dealer in the category of exempt market dealer in each of the Jurisdictions. The Filer is also registered in the category of investment fund manager in Ontario.
4. The principal office of the Filer is located at 70 York Street, Suite 1202, Toronto, Ontario M5J 1S9.
5. The Filer is part of the Man Investments division of Man Group plc (Man Group). Man Group is a world-leading alternative investment management business listed on the London Stock Exchange and is a member of the FTSE 100 Index with US$38.5 billion in assets under management and a market capitalization of approximately US$5.7 billion as of June 30, 2010. Man Group is a member of the Dow Jones Sustainability World Index and the FTSE4Good Index. Man Group employs more than 1,400 people in 15 locations, with key centres in London (UK) and Pfäffikon (Switzerland) and offices in Australia, Bermuda, Canada, Guernsey, Hong Kong, Ireland, Japan, Luxembourg, Netherlands, Singapore, Switzerland, UAE, UK, Uruguay and USA.
6. The Filer is an indirect subsidiary of Man Group. Man Group beneficially owns all of the issued and outstanding shares in the capital of the Filer. In preparing its financial statements, Man Group follows a comprehensive consolidation process which involves the consolidation of multiple subsidiary financial statements into a single set of consolidated financial statements prepared in accordance with IFRS-IASB. The consolidation process facilitates Man Group's compliance with regulated activities in the United Kingdom by the Financial Services Authority of the United Kingdom.
7. The Filer's financial year-end is March 31.
8. The Filer is not transitioning to the IFRS-IASB financial reporting framework because for the financial years ended prior to and including March 31, 2010, the Filer has prepared its audited financial statements in accordance with IFRS-IASB for purposes of consolidated financial reporting by Man Group and, thereafter, amended its audited financial statements with the additional disclosure required in accordance with Canadian GAAP for purposes of compliance with applicable regulatory requirements under NI 52-107.
9. NI 52-107 sets out acceptable accounting principles for financial reporting by domestic issuers, foreign issuers, registrants and other market participants. Under NI 52-107, domestic registrants are required to prepare financial statements in accordance with Canadian GAAP applicable to publicly accountable enterprises.
10. The Canadian Accounting Standards Board has confirmed that publicly accountable enterprises will be required to prepare their financial statements in accordance with IFRS-IASB for financial statements relating to fiscal years beginning on or after January 1, 2011.
11. In CSA Staff Notice 52-321 -- Early Adoption of International Financial Reporting Standards, Use of US GAAP and Reference to IFRS-IASB (CSA Staff Notice 52-321), staff of the Canadian Securities Administrators recognized that some issuers may wish to prepare their financial statements in accordance with IFRS-IASB for periods beginning prior to January 1, 2011 and indicated that staff were prepared to recommend exemptive relief on a case by case basis to permit a domestic issuer to do so, notwithstanding the requirements under section 3.1 of NI 52-107.
12. The Filer believes that adoption of IFRS-IASB will eliminate complexity and cost for the Filer's financial statement preparation process.
13. The Filer has the necessary technology and administrative processes in place to prepare IFRS-IASB financial statements as it already prepares its audited financial statements in accordance with IFRS-IASB for purposes of consolidated financial reporting by Man Group.
14. The Filer has carefully assessed the readiness of its staff, board of directors and auditors for the adoption by the Filer of IFRS-IASB for financial periods beginning on or after April 1, 2010 and has concluded that the Filer and all parties are adequately prepared for the Filer's immediate adoption of IFRS-IASB for the financial periods beginning on April 1, 2010.
15. The Filer has considered the implications of adopting IFRS-IASB beginning on or after April 1, 2010 on its obligations under Canadian securities legislation and concluded the early adoption is in the best interests of the Filer and users of its financial statements.
1. The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
2. The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:
(a) the Filer prepares its financial statements required to be delivered to the regulator or regulatory authority in accordance with IFRS-IASB except that any investments in subsidiaries, jointly controlled entities and associates must be accounted for as specified for separate financial statements in IAS 27 for the financial periods beginning on or after April 1, 2010; and
(b) the Filer's financial statements include:
(i) the following statement:
These financial statements are prepared in accordance with the IFRS-IASB except that any investments in subsidiaries, jointly controlled entities and associates are accounted for as specified for separate financial statements in IAS 27; and
(ii) an auditor's report that expresses an unqualified opinion that:
These financial statements are prepared in accordance with the financial reporting framework that is IFRS-IASB except that any investments in subsidiaries, jointly controlled entities and associates are accounted for as specified for separate financial statements in IAS 27.