Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- fund family relief from the requirement to send a printed information circular to registered holders of the securities of an investment fund -- relief subject to a number of conditions, including sending an explanatory document in lieu of the printed information circular and giving securityholders the option to request and obtain at no charge a printed information circular -- notice-and-access for investment funds -- National Instrument 81-106 Investment Fund Continuous Disclosure.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 12.2(2)(a), 17.1.

September 8, 2016

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF DESJARDINS INVESTMENTS INC., FIERA CAPITAL CORPORATION, IA CLARINGTON INVESTMENTS INC., NATIONAL BANK INVESTMENTS INC. (the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filers, on behalf of existing and future investment funds that are or will be managed from time to time by a Filer or by an affiliate or successor of a Filer (the Funds), for a decision under the securities legislation of the Jurisdictions (the Legislation) granting an exemption from the requirement contained in paragraph 12.2(2)(a) of Regulation 81-106 respecting Investment Fund Continuous Disclosure (c. V-1.1, r.42) (Regulation 81-106) for a person or company that solicits proxies, by or on behalf of management of a Fund, to send an information circular to each registered holder of securities of a Fund whose proxy is solicited, and instead allow the Funds to send a Notice-and-Access Document (as defined in condition 1 of this decision) using the Notice-and-Access Procedure (as defined in condition 2 of this decision) (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application,

(b) the Filers have provided notice that subsection 4.7(1) of Regulation 11-102 respecting Passport System (c. V-1.1, r.1) (Regulation 11-102) is intended to be relied upon in the jurisdictions of Canada other than the Jurisdictions; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions (c. V-1.1, r.3), Regulation 11-102, Regulation 51-102 respecting Continuous Disclosure Obligations (Regulation 51-102) (c. V-1.1, r.24) and Regulation 54-101 respecting Communication with Beneficial Owners of Securities of a Reporting Issuer (c. V-1.1, r. 29) (Regulation 54-101) have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filers:

The Filers and the Funds

1. The head office of each Filer is located in Montréal, Québec, except that of IA Clarington Investments Inc., which is located in Québec City, Québec.

2. Each jurisdiction where each Filer is registered and the specific categories of registration for each Filer are provided in Schedule A.

3. The Funds are, or will be, managed by one of the Filers or by an affiliate or successor of a Filer.

4. The Funds are, or will be, investment funds and are, or will be, reporting issuers in one or more of the jurisdictions.

5. None of the Filers, nor any of their existing Funds, is in default of any of the requirements of securities legislation in any jurisdiction.

Meetings of Securityholders of the Funds

6. Pursuant to applicable legislation, each Filer must call a meeting of securityholders of each Fund from time to time to consider and vote on matters requiring securityholder approval.

7. In connection with a meeting, a Fund is required to comply with the requirements in Regulation 81-106 regarding the sending of proxies and information circulars to registered holders of its securities, which include a requirement that each person or company that solicits proxies by or on behalf of management of a Fund send, with the notice of meeting, to each registered holder of securities of a Fund whose proxy is solicited, an information circular, prepared in compliance with the requirements of Form 51-102F5 of Regulation 51-102, to securityholders of record who are entitled to receive notice of the meeting.

8. A Fund is also required to comply with Regulation 51-102 for communicating with registered holders of its securities, and to comply with Regulation 54-101 for communicating with beneficial owners of its securities.

Notice-and-Access Procedure -- Corporate Finance Issuers

9. Section 9.1.1 of Regulation 51-102 permits, if certain conditions are met, a reporting issuer that is not an investment fund to use the notice-and-access procedure and send, instead of an information circular, a notice to each registered holder of its securities that contains certain specific information regarding the meeting and an explanation of the notice-and-access procedure.

10. Section 2.7.1 of Regulation 54-101 permits a reporting issuer that is not an investment fund to use a similar procedure to communicate with each beneficial owner of its securities.

Reasons supporting the Exemption Sought

11. A meeting of investment fund securityholders is no different than a meeting of corporate finance securityholders. As a result, if the notice-and access procedure set forth in Regulation 51-102 and in Regulation 54-101 can be used by a corporate finance issuer for a meeting of its securityholders in order to send a notice-and-access document instead of an information circular, it would not be detrimental to the protection of investors to allow an investment fund to also use the Notice-and-Access Procedure to send a Notice-and-Access Document, instead of the information circular.

12. With the Exemption Sought, securityholders will maintain the same access to the same quality of disclosure material currently available. Without limiting the generality of the foregoing:

a. all securityholders of record entitled to receive an information circular will receive instructions on how to access the information circular and will be able to receive a printed copy, without charge, if they so desire; and

b. the conditions to the Exemption Sought mandate that the Notice-and-Access Document will be sent to securityholders sufficiently in advance of a meeting so that if a securityholder wishes to receive a printed copy of the information circular, there will be sufficient time for each Filer, directly or through the Filer's agent, to send the information circular.

13. With the Notice-and-Access Procedure, no securityholder will be deprived of their ability to access the information circular in his/her preferred manner of communication.

14. In accordance with the Filer's standard of care owed to the relevant Fund pursuant to applicable legislation, a Filer will only use the Notice-and-Access Procedure for a particular meeting where it has concluded it is appropriate and consistent to do so, also taking into account the purpose of the meeting and whether the Fund would obtain a better participation rate by sending the information circular with the other proxy-related materials.

15. There are significant costs involved in the printing and delivery of the proxy-related materials, including information circulars, to securityholders in the Funds.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted, provided that, in respect of each Fund or Filer that solicits proxies by or on behalf of management of a Fund:

1. The registered holders or beneficial owners, as applicable, of securities of the Fund are sent a document that contains the following information and no other information (the Notice-and-Access Document):

a. the date, time and location of the meeting for which the proxy-related materials are being sent;

b. a description of each matter or group of related matters identified in the form of proxy to be voted on unless that information is already included in a Form 54-101F6 or Form 54-101F7 as applicable, that is being sent to the beneficial owner of securities of the Fund under condition (2)(c) of this decision;

c. the website addresses for SEDAR and the non-SEDAR website where the proxy-related materials are posted;

d. a reminder to review the information circular before voting;

e. an explanation of how to obtain a paper copy of the information circular and, if applicable, the financial statements;

f. a plain-language explanation of the Notice-and-Access Procedure that includes the following information:

i. the estimated date and time by which a request for a paper copy of the information circular and, if applicable, the financial statements of the Fund, is to be received in order for the registered holder or beneficial owner, as applicable, to receive the paper copy in advance of any deadline for the submission of voting instructions for the meeting;

ii. an explanation of how the registered holders or the beneficial owners, as applicable, of securities of the Fund are to return voting instructions, including any deadline for return of those instructions;

iii. the sections of the information circular where disclosure regarding each matter or group of related matters identified in the Notice-and-Access Document can be found; and

iv. a toll-free telephone number the registered holders or the beneficial owners, as applicable, of securities of the Fund can call to get information about the Notice-and-Access Procedure.

2. The Filer, on behalf of the Fund, sends the Notice-and-Access Document in compliance with the following procedure (the Notice-and-Access Procedure), in addition to any and all other applicable requirements:

a. the proxy-related materials are sent a minimum of 30 days before a meeting and a maximum of 50 days before a meeting;

b. if the Fund sends proxy-related materials:

i. directly to a NOBO using the Notice-and-Access Procedure, then the Fund must send the Notice-and-Access Document and, if applicable, any paper copies of information circulars and the financial statements, at least 30 days before the date of the meeting; and

ii. indirectly to a beneficial owner using the Notice-and-Access Procedure, then the Fund must send the Notice-and-Access Document and, if applicable, any paper copies of information circulars and the financial statements to the proximate intermediary (A) at least 3 business days before the 30th day before the date of the meeting, in the case of proxy-related materials that are to be sent on by the proximate intermediary by first class mail, courier or the equivalent, or (B) at least 4 business days before the 30th day before the date of the meeting, in the case of proxy-related materials that are to be sent using any other type of prepaid mail;

c. using the procedures referred to in section 2.9 or 2.12 of Regulation 54-101, as applicable, the beneficial owner of securities of the Fund is sent, by prepaid mail, courier or the equivalent, the Notice-and-Access Document and a Form 54-101F6 or Form 54-101F7, as applicable;

d. the Filer, on behalf of the Fund, files on SEDAR the notification of meeting and record dates on the same date that it sends the notification of meeting date and record date pursuant to subsection 2.2(1) of Regulation 54-101 (as such time may be abridged);

e. public electronic access to the information circular and the Notice-and-Access Document is provided on or before the date that the Notice-and-Access Document is sent to registered holders or to beneficial owners, as applicable, of securities of the Fund in the following manner:

i. the information circular and the Notice-and-Access Document are filed on SEDAR; and

ii. the information circular and the Notice-and-Access Document are posted until the date that is one year from the date that the documents are posted, on a website of the Filer or the Fund;

f. a toll-free telephone number is provided for use by the registered holders or beneficial owners, as applicable, of securities of the Fund to request a paper copy of the information circular and, if applicable, the financial statements of the Fund, at any time from the date that the Notice-and-Access Document is sent to the registered holders or the beneficial owners, as applicable, up to and including the date of the meeting, including any adjournment;

g. if a request for a paper copy of the information circular and, if applicable, the financial statements of the Fund, is received at the toll-free telephone number provided in the Notice-and-Access Document or by any other means, a paper copy of any such document requested is sent free of charge to the registered holder or beneficial owner, as applicable, at the address specified in the request in the following manner:

i. in the case of a request received prior to the date of the meeting, within 3 business days after receiving the request, by first class mail, courier or the equivalent; and

ii. in the case of a request received on or after the date of the meeting, and within one year of the date the information circular is filed on SEDAR, within 10 calendar days after receiving the request, by prepaid mail, courier or the equivalent;

h. a Notice-and-Access Document is only accompanied by:

i. a form of proxy;

ii. if applicable, the financial statements of the Fund to be presented at the meeting; and

iii. if the meeting is to approve a reorganization of the Fund with a mutual fund, as contemplated by paragraph 5.1(1)(f) of Regulation 81-102 respecting Investment Funds, the Fund Facts document for the continuing mutual fund;

i. a Notice-and-Access Document may only be combined in a single document with a form of proxy;

j. if the Filer, directly or through the Filer's agent, receives a request for a copy of the information circular and if applicable, the financial statements of the Fund, using the toll-free telephone number referred to Notice-and-Access Document or by any other means, it must not do any of the following:

i. ask for any information about the registered holder or beneficial owner, other than the name and address to which the information circular and, if applicable, the financial statements of the Fund are to be sent; and

ii. disclose or use the name or address of the registered holder or beneficial owner for any purpose other than sending the information circular and, if applicable, the financial statements of the Fund;

k. the Filer, directly or through the Filer's agent, must not collect information that can be used to identify a person or company who has accessed the website address to which it posts the proxy-related materials pursuant to condition (2)(e)(ii) of this decision.

l. in addition to the proxy-related materials posted on a website in the manner referred to in condition (2)(e)(ii) of this decision, the Filer must also post on the website the following documents:

i. any disclosure document regarding the meeting that the Filer, on behalf of the Fund, has sent to registered holders or beneficial owners of securities of the Fund; and

ii. any written communications the Filer, on behalf of the Fund, has made available to the public regarding each matter or group of matters to be voted on at the meeting, whether or not they were sent to registered holders or beneficial owners of securities of the Fund;

m. materials that are posted on a website pursuant to condition (2)(e)(ii) of this decision must be posted in a manner and be in a format that permit an individual with a reasonable level of computer skill and knowledge to do all of the following easily:

i. access, read and search the documents on the website; and

ii. download and print the documents;

n. despite subsection 2.1(b) of Regulation 54-101, if the Fund relies upon this Decision, it must set a record date for notice that is no fewer than 40 days before the date of the meeting;

o. in addition to section 2.20 of Regulation 54-101, the Fund may only abridge the time prescribed in subsection 2.1(b), 2.2(1) or 2.5(1) of Regulation 54-101 if the Fund fixes the record date for notice to be at least 40 days before the date of the meeting and sends the notification of meeting and record dates at least 3 business days before the record date for notice;

p. the notification of meeting date and record date sent pursuant to subsection 2.2(1)(b) of Regulation 54-101 shall specify that the Fund is sending proxy-related materials to registered holders or beneficial owners, as applicable, of securities of the Fund using the Notice-and-Access Procedure pursuant to the terms of this Decision;

q. the Filer, on behalf of the Fund, provides disclosure in the information circular to the effect that the Fund is sending proxy-related materials to registered holders or beneficial owners, as applicable, of securities of the Fund using the Notice-and-Access Procedure pursuant to the terms of this Decision; and

r. the Filer pays for delivery of the information circular and, if applicable, the financial statements of the Fund, to registered holders or to beneficial owners, as applicable, of securities of the Fund if a copy of such material is requested following receipt of the Notice-and-Access Document.

The Exemption Sought terminates on the coming into force of any legislation or regulation allowing an investment fund to use a notice-and-access procedure.

"Hugo Lacroix"
Senior Director, Investment Funds

 

Schedule A

Filer Registration Information

 

Name of Investment Fund Manager (Filer)

Category of Registration

Jurisdiction

 

1.

Desjardins Investments Inc.

Investment Funds Manager

Newfoundland and Labrador, Ontario and Québec

 

2.

Fiera Capital Corporation

Investment Fund Manager

Newfoundland and Labrador, Ontario and Québec

 

 

 

Portfolio Manager Exempt Market Dealer

All jurisdictions of Canada

 

 

 

Derivatives Portfolio Manager

Québec

 

 

 

Commodity Trading Manager

Ontario

 

 

 

Adviser, pursuant to the Commodity Futures Act (Manitoba)

Manitoba

 

3.

IA Clarington Investments Inc.

Investment Fund Manager

Newfoundland and Labrador, Ontario and Québec

 

 

 

Portfolio Manager

All provinces of Canada

 

4.

National Bank Investments Inc.

Investment Fund Manager

Newfoundland and Labrador, Ontario and Québec

 

 

 

Mutual Fund Dealer

All jurisdictions of Canada