Securities Law & Instruments


MI 11-102 -- Exemption from requirement to register as investment fund manager -- accumulation of assets of individual subsidiary insurance companies resulted in a mutual fund -- insurance companies regulated under separate legislation, no offer to the public of units of limited partnership -- Section 25(4) Securities Act (Ontario) and Section 7.3 of NI 31-103.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements and Exemptions, s. 7.3.

Securities Act (Ontario), ss. 25(4), 74.

December 14, 2010




(the "Jurisdiction")








(the "Filer")



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") for an exemption from Section 25(4) of the Ontario Securities Act (the "Act") and Section 7.3 of National Instrument 31-103, Registration Requirements and Exemptions ("NI 31-103") exempting the Filer from the registration requirement contained in the Act and NI 31-103 that would require the Filer to register as an investment fund manager with respect Intact Investment Limited Partnership (the "Exemption Sought"). The exemption is being sought pursuant to Section 74(1) of the Act and Section 15.1 of NI 31-103.

Under the Process for Exemptive Relief Applications:

(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 the Province of Québec.


Defined terms contained in the Act and National Instrument 14-101 -- Definitions 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. The head office of the Filer is located in Toronto, Ontario.

2. The Filer, a wholly-owned subsidiary of Intact Financial Corporation ("IFC"), is the general partner for Intact Investment Limited Partnership (the "Limited Partnership"), a limited partnership established under the Limited Partnerships Act (Ontario) whose principal place of business is located in Toronto, Ontario.

3. The Limited Partnership is a "mutual fund in Ontario" as that term is defined in the Act.

4. IFC is a reporting issuer in all provinces and territories in Canada (the "Jurisdictions"). IFC's registered and principal business office is located in Toronto, Ontario. IFC is a holding company incorporated under the Canada Business Corporations Act which, through its operating subsidiaries, provides property and casualty insurance in Canada.

5. Intact Insurance Company, Novex Insurance Company, The Nordic Insurance Company of Canada, Trafalgar Insurance Company of Canada and Belair Insurance Company Inc., each of which is a subsidiary of IFC, (collectively, the "Limited Partners") are the limited partners of the Limited Partnership.

6. Intact Investment Management Inc. (the "Adviser"), a corporation incorporated under the Canada Business Corporations Act, is a wholly-owned subsidiary of IFC and is registered under NI 31-103 in Ontario, Quebec, British Columbia and Alberta as an adviser in the category of portfolio manager. The head office of the Adviser is located in Toronto, Ontario.

7. The Adviser is, pursuant to an Advisor Agreement between the Adviser and IFC, the portfolio manager of the investment portfolios of IFC and its affiliates, including the Limited Partners and the Limited Partnership.

8. The Limited Partners, through IFC, pay to the Adviser, as full compensation for investment management services rendered, a quarterly fee based on assets under management, whether in their own respective investment portfolio or in the investment portfolio of the Limited Partnership.

9. The Limited Partnership was formed for the purpose of restructuring the manner in which the investments of the Limited Partners are held and managed. The initial restructuring involved each of the Limited Partners contributing part of its portfolio of the marketable securities they owned to the Limited Partnership. Going forward, the Limited Partners contribute cash to the Limited Partnership which is collectively employed to purchase marketable securities for the investment portfolio of the Limited Partnership. The pooling of the investment portfolios of the Limited Partners was intended to achieve improved risk management, capital management and operating performance.

10. The Filer, Limited Partnership, Adviser and IFC are not in default of securities legislation in any of the Jurisdictions.

11. The Limited Partnership, the Filer and the Limited Partners are (and in the case of any future Limited Partners, will be) all members of the IFC group of companies.

12. Pursuant to the limited partnership agreement which governs the relationship between the Limited Partners and the Limited Partnership (the "Partnership Agreement"), the ownership interests of the Limited Partners are not transferable and the only parties that may become limited partners are other regulated insurance companies in Canada that are affiliated with IFC. The Limited Partnership currently has six (6) beneficial security holders made up of the Filer and the Limited Partners. The Limited Partnership does not intend to ever have more than fifty (50) beneficial security holders.

13. Given the fact that all the Limited Partners are regulated insurance companies in Canada, the structure of the Limited Partnership required approval from the Office of the Superintendent of Financial Institutions Canada ("OSFI") and from the Autorité des marchés financiers. Such approvals were received in July and September 2008 respectively.

14. As a condition to the approval of the structure, the investment portfolio of the Limited Partnership must be managed by the Adviser in compliance with the requirements of the Insurance Companies Act (Canada), the regulations made thereunder, guidance issued by OSFI and the investment policies applicable to the Limited Partners.

15. Under the Partnership Agreement, the Filer acts in the best interest of the Limited Partners with the degree of care, diligence and skill that a reasonably prudent investment fund administrator would exercise in comparable circumstances.

16. The Limited Partnership has never sought and does not intend to seek to borrow money from the public.

17. The Limited Partnership is not, and does not intend to become, a reporting issuer, as such term is defined in the Act, and its securities will not be listed on any stock exchange. As such, the Limited Partnership does not distribute and has never distributed its securities to the public.


The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

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

"Carol S. Perry"
Ontario Securities Commission
"James D. Carnwarth"
Ontario Securities Commission