Investment Funds


Rights Offerings


An investment fund may distribute rights to purchase additional securities of the fund to its existing securityholders using a long form or short form prospectus or by employing the prospectus exemption for rights offerings in National Instrument 45-106 Prospectus and Registration Exemptions. To do so, it must comply with the requirements of National Instrument 45-101 Rights Offerings.

An investment fund cannot file a prospectus for a rights offering unless the prospectus is filed for both the distribution of the rights and the distribution of the securities that are issuable on the exercise of the rights.

The rights offering exemption is not available for offerings that would result in an increase of more than 25% in the number of the investment fund’s outstanding securities, including amounts raised in other rights offerings completed within the previous 12 months.

The investment fund must give prior written notice to the OSC that it is relying on the rights offering exemption. In addition, a rights offering circular containing the information in Form 45-101F Information Required in a Rights Offering Circular must be prepared and filed in draft and final form with the OSC via SEDAR. For more information on how to file documents on SEDAR, see Filing Procedures.

The OSC will inform the investment fund in writing within 10 days of the written notice whether it objects to the offering or accepts it. The investment fund must satisfactorily address any objections raised before an acceptance letter will be issued.

If an acceptance letter is issued, the investment fund must send the rights offering circular to every securityholder who will receive rights under the offering.

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