National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from requirement to file interim financial statements and management report of fund performance in accordance with NI 81-106 based on the fact that the issuer file an interim financial report and management's discussion & analysis in accordance with NI 51-102 -- relief granted in connection with the issuer's transition from the regulatory regime for reporting issuers that are investment funds to the regulatory regime for reporting issuers that are not investment funds -- upon completion of the transition, issuer will be subject to NI 51-102 -- National Instrument 81-106 Investment Fund Continuous Disclosure.
Applicable Legislative Provisions
National Instrument 81-106 Investment Fund Continuous Disclosure, Parts 2 and 3 and ss. 4.2, 5.1, 5.4, 5.5, 17.1.
August 26, 2013
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
TIMBERCREEK SENIOR MORTGAGE
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") pursuant to section 17.1 of National Instrument 81-106 Investment Fund Continuous Disclosure ("NI 81-106") exempting the Filer from the following provisions of NI 81-106:
i) Parts 2 and 3, such that the Filer will not be required to prepare its interim financial statements in respect of the period ended June 30, 2013 (the "2013 81-106 Interim Financial Statements") in accordance with Canadian GAAP as applicable to public enterprises;
ii) section 4.2, such that the Filer will not be required to prepare and file its interim management report of fund performance in respect of the period ended June 30, 2013 (the "2013 Interim MRFP"); and
iii) the delivery obligations in respect of the 2013 81-106 Interim Financial Statements and 2013 Interim MRFP contained in sections 5.1, 5.4 and 5.5;
(collectively, the "Exemptive Relief Sought").
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 section 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, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Nunavut and Yukon.
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:
(a) The Filer is currently an investment fund and the manager of the Filer is Timbercreek Asset Management Ltd. (the "Manager"). The head office of the Manager is located in Toronto, Ontario.
(b) The Filer is a federal corporation incorporated on December 1, 2011 under the Canada Business Corporations Act. Its head office and registered office is at 1000 Yonge Street, Suite 500, Toronto, Ontario M4W 2K2.
(c) The Filer's Class A shares are listed on the Toronto Stock Exchange under the symbol "MTG" and it is a reporting issuer in all provinces and territories of Canada.
(d) The Filer is not in default of any securities legislation in any province or territory of Canada.
(e) As an investment fund, the Filer is subject to the continuous disclosure requirements of NI 81-106.
(f) The Filer's financial year-end is December 31.
(g) Pursuant to sections 2.4 and 2.6 of NI 81-106, the Filer is required to file the 2013 Interim 81-106 Financial Statements on or before the 60th day after June 30, 2013 and the 2013 Interim 81-106 Financial Statements must be prepared in accordance with Canadian GAAP as applicable to public enterprises.
(h) Pursuant to sections 4.2 and 4.4 of NI 81-106, the Filer is required to file the 2013 Interim MRFP at the same time that it files the 2013 81-106 Interim Financial Statements, and the 2013 Interim MRFP must be prepared in accordance with Part C of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance.
(i) The Filer is currently contemplating a transition (the "Proposed Transition") from its status as an investment fund that is subject to the Canadian securities regulatory regime for investment funds that are reporting issuers to a public company that is subject to the Canadian securities regulatory regime for reporting issuers that are not investment funds, and intends to hold a shareholders' meeting on September 12, 2013 to approve, among other resolutions, the Proposed Transition (the "Shareholders' Meeting").
(j) The Filer filed a management information circular (the "Circular") in respect of the Shareholders' Meeting on August 19, 2013 which contains a description of the Proposed Transition.
(k) If the Proposed Transition is approved at the Shareholders' Meeting and the directors of the Filer decide to proceed with the Proposed Transition, the Filer will become subject to National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102") and, pursuant to NI 51-102, the Filer will be required to file its interim financial reports and MD&A (as defined in NI 51-102) on or before the 45th day after the first quarter ended after the Proposed Transition has been effected (currently anticipated to be the quarter ending September 30, 2013) and thereafter on a quarterly basis, and such interim financial reports must be prepared in accordance with IFRS.
(l) The Filer prepared and included in the Circular comparative annual financial statements and MD&A for the years ended December 31, 2012 and 2011, interim financial report and MD&A for the interim period ended March 31, 2013, and interim financial report and MD&A for the interim period ended June 30, 2013 (together, the "Financial Disclosure"), all prepared in accordance with the requirements of NI 51-102.
(m) Given that the Financial Disclosure has been prepared in accordance with IFRS and has been made available to the public together with the Circular on August 19, 2013, the Filer wishes to avoid any confusion to the public arising from any inconsistency between (i) the Financial Disclosure and (ii) the 2013 81-106 Interim Financial Statements and the 2013 Interim MRFP, and is seeking the Exemptive Relief Sought.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make this decision.
The decision of the principal regulator under the Legislation is that the Exemptive Relief Sought is granted provided that:
1. In addition to filing the Circular, the Filer also files the interim financial report and MD&A for the interim period ended June 30, 2013 that were prepared in accordance with the requirements of NI 51-102 on SEDAR on or before August 29, 2013; and
2. in the event that the Proposed Transition is not approved at the Shareholders' Meeting or is, for any other reason, not implemented, the Filer prepares the 2013 81-106 Interim Financial Statements and the 2013 Interim MRFP in accordance with NI 81-106, such 2013 81-106 Interim Financial Statements and 2013 Interim MRFP to be filed no later than the date falling 60 days after the date of the Shareholders' Meeting.