National Policy 11-203 Process for Exemptive Relief in Multiple Jurisdictions -- Relief granted to scholarship plan and mutual fund for extension of prospectus lapse date -- additional time requested in order to align lapse date of plan prospectus with filer's existing scholarship plans due to anticipated merger -- extension of the lapse date will not impact currency of disclosure relating to the funds.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5 as am., s. 62(5).
July 19, 2018
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (THE JURISDICTION) AND IN THE MATTER OF KNOWLEDGE FIRST FINANCIAL INC. (the Filer) AND HERITAGE PLANS AND IMPRESSION PLAN (the Plans)
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption that the time limits pertaining to filing the renewal prospectus of the Plans be extended as if the lapse date of each of the Plans' prospectuses dated August 4, 2017 (together, the Current Prospectuses) is August 24, 2018 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions,
(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 intended to be relied upon in each of the other provinces and territories of Canada (the Passport Jurisdictions, and together with the Jurisdiction, the Jurisdictions).
Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the Canada Business Corporations Act.
2. The Filer is registered as a scholarship plan dealer under applicable securities legislation in each province and territory of Canada. The Filer is also registered as an investment fund manager under applicable securities legislation in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, Newfoundland and Nova Scotia. The Filer is a subsidiary of the Knowledge First Foundation.
3. Each of the Plans is sponsored by Heritage Educational Foundation and are currently administered by Heritage Education Funds Inc. which also is currently, the investment fund manager of the Plans. Heritage Education Funds Inc. is registered as an investment fund manager under applicable securities legislation in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, Newfoundland and Nova Scotia.
4. Each of the Plans is a reporting issuer in each of the provinces and territories in Canada.
5. Securities of the Plans are currently qualified for distribution in each of the provinces and territories of Canada under the Current Prospectuses.
6. None of the Plans, Heritage Education Funds Inc. nor the Filer are in default of securities legislation in any of the Jurisdictions.
7. The lapse date of the Current Prospectuses is August 4, 2018. Accordingly, under the Legislation, the distribution of securities of each Plan would have to cease on the Current Lapse Date unless (a) each Plan files a pro forma prospectus at least 30 days prior to the Current Lapse Date; (b) the final prospectus is filed no later than 10 days after the Current Lapse Date; and (c) a receipt for the final prospectus for each Plan is obtained within 20 days of the Current Lapse Date.
8. On May 28, 2018, a pro forma prospectus (the Pro Forma Prospectus) was filed for each Plan in connection with the continuous public offering of the securities of each Plan.
9. Since the date of the Current Prospectuses, Heritage Education Funds Inc. and Heritage Educational Foundation were acquired by the Filer on January 2, 2018 (the Acquisition) and are wholly owned by the Filer.
10. The Filer intends to amalgamate with Heritage Education Funds Inc. and to legally merge Heritage Education Funds Inc.'s business operations, including the role of the investment fund manager, into the Filer's business by or about August 28, 2018. As such, and as the successor investment fund manager of the Plans, the Filer seeks to have the Current Lapse Date for the Current Prospectuses match the lapse date of the current prospectuses for the Filer's other scholarship plans, which is August 24, 2018.
11. If the Exemption Sought is not granted, each of the Plans will be required to file a final prospectus within 10 days of their Current Lapse Date, however, such prospectuses will not provide disclosure of the anticipated merger. In such case, after the filing of final prospectuses for the Plans and completion of the merger on or about August 28, 2018, the Filer would then be required to amend the Plans' final prospectuses to reflect the merger of Heritage Education Funds Inc. with the Filer. This additional step would add unnecessary cost and time to the prospectus renewal process.
12. Since the date of the Current Prospectuses, there has been no undisclosed material change in the Plans. Accordingly, each Current Prospectus continues to provide accurate information regarding each Plan as appropriate.
13. Should any material changes be proposed in the interim, the prospectus of each Plan will be amended accordingly. Therefore, the Exemption Sought will not affect the currency or accuracy of the information contained in the Current Prospectuses, and there 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.