Securities Law & Instruments


Headnote

Order pursuant to section 158(1.1) of the Business Corporations Act (Ontario) that an offering corporation is permitted to dispense with its audit committee – Issuer is an investment fund – Issuer not required to have an audit committee under securities laws.

Applicable Legislative Provisions

Business Corporations Act, R.S.O. 1990, c. B.16, s. 158(1.1).
National Instrument 52-110 Audit Committees.
National Instrument 81-106 Investment Fund Continuous Disclosure.
National Instrument 81-107 Independent Review Committee for Investment Funds.

August 23, 2016

IN THE MATTER OF
THE BUSINESS CORPORATIONS ACT,
R.S.O. 1990, CHAPTER B. 16, AS AMENDED
(the “OBCA”)

AND

IN THE MATTER OF
FIRST ASSET FUND CORP.

ORDER
(Subsection 158(1.1) of the OBCA)

                UPON the application of First Asset Fund Corp. (the “Applicant”) to the Ontario Securities Commission (the “Commission”) for an order pursuant to subsection 158(1.1) of the OBCA for a determination that the Applicant be authorized to dispense with an audit committee;

                AND UPON considering the application and the recommendation of staff of the Commission;

                AND UPON the Applicant having represented to the Commission that:

1.             The Applicant is a mutual fund corporation amalgamated under the laws of the Province of Ontario pursuant to articles of amalgamation dated May 3, 2016, and is a reporting issuer in all provinces and territories of Canada.

2.             The authorized capital of the Applicant includes an unlimited number of non-cumulative, redeemable, non-voting classes of shares (each a “Corporate Class”), issuable in an unlimited number of series, and one class of voting shares designated as “Class J Shares”.

3.             Each Corporate Class is a separate investment fund (each a “First Asset ETF”) having specific investment objectives and is specifically referable to a separate portfolio of investments. Each First Asset ETF currently consists of a single series of exchange traded fund shares (“Shares”).

4.             As at August 4, 2016, there are eight (8) First Asset ETFs as follows:

First Asset ETF

TSX Ticker Symbol

First Asset Short Term Government Bond Index Class ETF

FGB

First Asset Global Momentum Class ETF

FGL

First Asset Global Momentum (CAD Hedged) Class ETF

FGM

First Asset Global Value Class ETF

FGU

First Asset Global Value (CAD Hedged) Class ETF

FGV

First Asset CanBanc Income ETF

CIC

First Asset Core Canadian Equity Income Class ETF

CSY

First Asset MSCI Canada Quality Index Class ETF

FQC

Each First Asset ETF is hereinafter referred to by its ticker symbol.

5.             As at August 4, 2016, the issued and outstanding capital of each First Asset ETF is as follows:

First Asset ETF

Units Issued and Outstanding

FGB

2,300,000

FGL

50,000

FGM

50,000

FGU

50,000

FGV

50,000

CIC

12,821,193

CSY

1,846,954

FQC

916,265

 

6.             The Shares of each First Asset ETF are offered on a continuous basis pursuant to a prospectus dated February 23, 2016 (in respect of FGB, FGL, FGM, FGU, FGV) or a prospectus dated April 1, 2016 (in respect of CIC, CSY and FQC).

7.             First Asset Investment Management Inc. (“First Asset”) is the manager of the Applicant pursuant to a management agreement between First Asset and the Applicant. First Asset is a corporation formed under the laws of the Province of Ontario.

8.             First Asset is registered as a portfolio manager in Ontario and as an investment fund manager under the securities legislation of each of Ontario, Quebec and Newfoundland and Labrador. First Asset is a subsidiary of CI Financial Corp.

9.             Neither the Applicant nor First Asset is in default of the applicable securities legislation of any province or territory of Canada.

10.          The Applicant is a mutual fund as defined in Section 1.1 of National Instrument 81-106 Investment Fund Continuous Disclosure (“NI 81-106”).

11.          National Instrument 52-110 Audit Committees does not apply to reporting issuers that are investment funds.

12.          The Applicant is subject to the investment fund specific continuous disclosure and conflict of interest rules found in NI 81-106 and National Instrument 81-107 Independent Review Committee for Investment Funds.

13.          In accordance with NI 81-106, the board of directors of the Applicant approves, or will approve, the financial statements of the First Asset ETFs before such financial statements are filed or made available to investors.

                AND UPON the Commission being satisfied that to do so would not be prejudicial to the Applicant’s shareholders.

                IT IS ORDERED, pursuant to subsection 158(1.1) of the OBCA, that the Applicant is authorized to dispense with an audit committee for so long as applicable securities legislation does not require the Applicant to have an audit committee.

“Christopher Portner”
Commissioner
Ontario Securities Commission

“Tim Moseley”
Commissioner
Ontario Securities Commission