National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Mutual funds granted relief from preparing and filing annual management report of fund performance -- Portfolios had not commenced operations -- Manager is the sole unitholder.
Applicable Legislative Provisions
National Instrument 81-106 Investment Fund Continuous Disclosure, s. 4.2.
March 4, 2016
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF CIBC ASSET MANAGEMENT INC. (the Filer) AND CONSERVATIVE INCOME PORTFOLIO, BALANCED INCOME PORTFOLIO, ENHANCED INCOME PORTFOLIO (the Portfolios)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Portfolios for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption, pursuant to section 17.1 of National Instrument 81-106 -- Investment Fund Continuous Disclosure (NI 81-106) from the requirement contained in section 4.2 of NI 81-106 to prepare and file a management report of fund performance (MRFP) for the annual period ended December 31, 2015 (the Requested Relief).
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 to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (the Passport Jurisdictions; collectively, the Jurisdiction and the Passport Jurisdictions, 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 in this decision.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the laws of Canada and has its head office in Toronto, Ontario.
2. The Filer is registered as a portfolio manager in all provinces and territories of Canada, an investment fund manager in Ontario, Quebec and Newfoundland and Labrador, a commodity trading manager in Ontario and a derivatives portfolio manager in Quebec.
3. The Filer is the investment fund manager and trustee of the Portfolios.
4. The Portfolios are open-ended mutual fund trusts established and organized under the laws of the Province of Ontario on December 16, 2015 pursuant to an amended and restated master declaration of trust dated as of December 14, 2015.
5. The Portfolios became reporting issuers on December 17, 2015, following the issuance of a receipt by the Principal Regulator for the final simplified prospectus and annual information form of the Portfolios dated December 16, 2015.
6. None of the Portfolios or the Filer is in default of the securities legislation in any of the Jurisdictions.
7. The Portfolios have a fiscal year end as of December 31. The initial annual period end for the Portfolios is December 31, 2015.
8. As of December 31, 2015, no securities were issued to the public. The Filer was the sole unitholder of the Portfolios.
9. In the absence of the Requested Relief, the Portfolios would be required to prepare and file in the Jurisdictions an annual MRFP for its first fiscal year ended December 31, 2015 (the Annual MRFP).
10. As the Annual MRFP would be the first MRFP filed by the Portfolios, it would not contain financial highlights and past performance, in accordance with Part B of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance. The summary of investment portfolio would only show the cash held by the Portfolios, and the management discussion of fund performance would have been minimal as the Portfolios have not commenced operations.
11. Given the minimal amount of information that the Portfolios would provide in the Annual MRFP, the cost of preparing, reviewing and filing the Annual MRFP would outweigh any benefit.
12. The Portfolios are fund-of-fund products that invest in an underlying funds managed by the Filer.
13. The Filer will prepare and file the audited annual financial statements for the Portfolios for the period ended December 31, 2015 as required by NI 81-106.
14. Given the limited activities of the Portfolios for the period of December 17, 2015 to December 31, 2015 and given no securities, other than for seed capital purposes, were issued as of December 31, 2015, no significant information can be provided in the Annual MRFP.
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 Requested Relief is granted.