National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to mutual funds for extension of lapse date of their prospectuses – Filer will incorporate offering of the mutual funds under the same offering documents as other funds in the same family when they are renewed – Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectuses.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
July 29, 2016
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
1832 ASSET MANAGEMENT L.P.
DYNAMIC GLOBAL INFRASTRUCTURE CLASS
DYNAMIC GLOBAL ALL-TERRAIN FUND
(DGATF) (DGIC and DGATF, each a Fund and collectively, the Funds)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limits for the renewal of the simplified prospectus and annual information form of each Fund (currently dated September 1, 2015 for DGIC and September 3, 2015 for DGATF) be extended to those time limits that would apply if the lapse date was November 18, 2016 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission (OSC) 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 each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).
Terms defined in 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. Each Fund was established under and is governed by the laws of the Province of Ontario, DGIC as a mutual fund class of a corporation and DGATF as a mutual fund trust. Each Fund is a mutual fund and a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
2. DGIC currently distributes its securities in the Jurisdictions pursuant to a simplified prospectus (SP) dated September 1, 2015, as amended (the DGIC Current SP).
3. DGATF currently distributes its securities in the Jurisdictions pursuant to a SP dated September 3, 2015, as amended (the DGATF Current SP, together with the DGIC Current SP, the Current SPs).
4. The lapse date of the DGIC Current SP under the Legislation is September 1, 2016 and the lapse date of the DGATF Current SP under the Legislation is September 3, 2016 (each, the Current Lapse Date).
5. Under the Legislation, the distribution of securities of each Fund may continue for a further twelve months after its Current Lapse Date if: (i) the Fund files a pro forma SP at least 30 days prior to its Current Lapse Date; (ii) the final SP is filed no later than 10 days after its Current Lapse Date; and (iii) a receipt for the final SP is obtained within 20 days after its Current Lapse Date.
6. The Filer is the manager of the Funds. The Filer is also the manager of 95 other “Dynamic Funds” mutual funds (collectively, the Other Funds) that are offered in the Jurisdictions under a multi-fund SP dated November 18, 2015, as amended.
7. The Filer is an Ontario limited partnership, which is wholly-owned, indirectly, by The Bank of Nova Scotia (BNS). The general partner of the Filer is 1832 Asset Management G.P. Inc., an Ontario corporation wholly-owned directly by BNS with its head office in Ontario.
8. The Filer is registered as: (i) a portfolio manager in all of the provinces of Canada and in the Northwest Territories and the Yukon; (ii) an exempt market dealer in all of the provinces of Canada (except Prince Edward Island and Saskatchewan); (iii) an investment fund manager in Ontario, Québec, Newfoundland and Labrador and the Northwest Territories; and (iv) a commodity trading manager in Ontario.
9. Neither the Filer nor any of the Funds is in default of securities legislation in any of the Jurisdictions.
10. The Filer wishes to combine the SPs of the Funds with the SP of the Other Funds in order to reduce the cost of renewing the SPs of the Funds and on-going printing and related costs. Offering the Funds under the same offering documents as the Other Funds would facilitate the distribution of the Funds in the Jurisdictions under the same SP and would also assist in disseminating information with respect to the Funds and the Other Funds in such matters such as switching between the Funds and the Other Funds. The Other Funds share many common operational and administrative features with the Funds and combining them in the same SP will allow investors to more easily compare the features of the Other Funds and the Funds.
11. It would be impractical at this time to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal SP, annual information form and Fund Facts of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the renewal SP of the Other Funds can be filed earlier with the renewal SPs of the Funds. As the SP of the Other Funds is a large document and there is an in-depth internal review process that the Filer undertakes when renewing that document, the Filer would not have sufficient time to finalize and file the pro forma SP of the Other Funds by at least 30 days prior to either of the Current Lapse Dates.
12. The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds' SP in November 2016. The ability to file the SPs of the Funds with the SP of the Other Funds will ensure that the Filer can make the operational and administrative features of the Funds and the Other Funds consistent with each other.
13. If the Exemption Sought is not granted, it will be necessary to renew the SPs and associated documents of the Funds twice within a short period of time in order to consolidate the SPs of the Funds with the SP of the Other Funds.
14. New investors of the Funds will receive delivery of the most recently filed Fund Facts of the Funds (dated September 1, 2015 for series of DGIC and September 3, 2015 for series of DGATF). The SP of each Fund will still be available upon request.
15. There have been no material changes in the affairs of DGIC since the date of the DGIC Current SP, other than those for which amendments have been filed in accordance with the Legislation. Accordingly, the DGIC Current SP and Fund Facts represent current information of DGIC.
16. There have been no material changes in the affairs of DGATF since the date of the DGATF Current SP, other than those for which amendments have been filed in accordance with the Legislation. Accordingly, the DGATF Current SP and Fund Facts represent current information of DGATF.
17. Given the disclosure obligations of the Funds, should any material changes occur, the SP and Fund Facts of the respective Fund will be amended as required in accordance with the Legislation.
18. The Exemption Sought will not affect the accuracy of the information contained in the disclosure documents, including the Current SP and Fund Facts, of each Fund and therefore will not be prejudicial to the public interest.
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.
Investment Funds and Structured Products Branch
Ontario Securities Commission