National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief to permit a non-redeemable investment fund to merger into a mutual fund without securityholder approval -- relief granted on particular facts, including that the fund's prospectus was filed prior to the publications of amendments to NI 81-102 that would require securityholder approval of mergers -- fund's prospectus disclosed the merger as well as the mutual fund into which the fund would merge.
Applicable Legislative Provisions
National Instrument 81-102 Investment Funds, ss. 5.1(f), 5.5(1)(b), 19.1.
Citation: Re Global Infrastructure Dividend Fund, 2015 ABASC 665
May 1, 2015
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF GLOBAL INFRASTRUCTURE DIVIDEND FUND (Global) AND MIDDLEFIELD LIMITED (the Manager and, together with Global, the Filers)
The securities regulatory authority or regulator (the SRA or Regulator) in each of the Jurisdictions (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting Global from the requirement to obtain with respect to the Conversion (as defined below) (i) securityholder approval as required by paragraph 5.1(1)(f) of National Instrument 81-102 Investment Funds (NI 81-102), and (ii) approval of the SRA or Regulator as required by paragraph 5.5(1)(b) of NI 81-102 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Alberta Securities Commission is the principal regulator for this application,
(b) the Filers have 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, Saskatchewan, Manitoba, Québec, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon, and
(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions or in MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein.
This decision is based on the following facts represented by the Filers:
1. Global is an unincorporated closed-end investment trust established under the laws of Alberta pursuant to a declaration of trust dated June 27, 2014 (the Declaration of Trust).
2. Global is a "non-redeemable investment fund" as defined in the Legislation.
3. The Manager is a corporation existing under the Business Corporations Act (Alberta), has its head office in Calgary, Alberta and is the manager and the trustee of Global. The Manager is not in default of securities legislation in any jurisdiction.
4. Global is a reporting issuer or equivalent in each of the provinces and territories of Canada and is not in default of securities legislation in any jurisdiction.
5. Global's trust units (the Units) are listed and posted for trading on the Toronto Stock Exchange.
6. Units may be surrendered for redemption on the second last business day of any month for an amount equal to (i) in the case of redemptions in July 2015, the Redemption Price per Unit (as defined in the Declaration of Trust), or (ii) in the case of any other month, the Monthly Redemption Price per Unit (as defined in the Declaration of Trust).
7. Global filed a preliminary long form prospectus (the Preliminary Prospectus) dated May 29, 2014 regarding the initial public offering of the Units in all of the provinces and territories of Canada, and subsequently filed a prospectus (Prospectus) in respect of such offering. The Prospectus disclosed that on or about August 15, 2016, Global would, subject to applicable laws and receipt of any regulatory approvals required by legislation then in force, without a vote of holders of Units (Unitholders), be merged on a tax-deferred basis into Middlefield Global Infrastructure Fund (MGIF), an open-end mutual fund managed by the Manager (the Conversion). The Prospectus also disclosed the higher management fee payable in respect of the relevant series of units of MGIF in comparison to the management fee for the units of Global, and in addition disclosed that all expenses associated with the Conversion would be paid by the Manager.
8. On June 19, 2014, following the date of filing of the Preliminary Prospectus, amendments to NI 81-102 were published that would require all investment funds to obtain securityholder and SRA or Regulator approval in respect of transactions such as the Conversion. The amendments came into force on September 22, 2014.
9. If the Exemption Sought is granted, Global will issue a news release describing the Conversion, including that the Conversion will be effected without a vote of Unitholders, in advance of the deadline for Unitholders to tender Units in respect of the July 2015 redemption date. The news release will assist Unitholders in making an informed decision regarding whether to redeem their Units or continue as Unitholders and become unitholders of MGIF pursuant to the Conversion.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that both of the following are satisfied:
(a) the Conversion is effected substantially as described in the Prospectus;
(b) a news release is disseminated as described in paragraph 9.