National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- mutual funds granted relief from preparing annual management report of fund performance as only in existence for twelve days prior to first fiscal year end.
Applicable Legislative Provisions
National Instrument 81-106 Investment Fund Continuous Disclosure, s. 4.2.
Citation: CGF MFC Management Ltd., Re, 2009 ABASC 30
February 4, 2009
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
CGF MFC MANAGEMENT LTD.
(CGF MFC OR THE MANAGER)
CGF INCOME & EQUITY CLASS, CGF MONEY
MARKET CLASS, CGF FIXED INCOME CLASS,
CGF CANADIAN HEAVYWEIGHT EQUITY CLASS,
CGF US HEAVYWEIGHT EQUITY CLASS,
CGF GLOBAL HEAVYWEIGHT EQUITY CLASS,
CGF INTERNATIONAL HEAVYWEIGHT EQUITY
CLASS, CGF CANADIAN RESOURCE CLASS,
CGF VALUE FUND CLASS AND
CGF INCOME FUND CLASS
(the Manager and the Funds, collectively, the Filer)
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption, pursuant to section 17.1 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106), from the requirement in section 4.2 of NI 81-106 to file a management report of fund performance (MRFP) for each Fund for the period ended December 31, 2008 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Alberta Securities Commission (the Commission) is the principal regulator for this application;
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in the jurisdictions of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Nunavut and Yukon (the Non-Principal Passport Jurisdictions); and
(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Defined terms contained in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision unless otherwise defined.
This decision is based on the following facts represented by the Manager on behalf of the Funds:
1. CGF MFC is a corporation operating under the laws of the Province of Alberta, with its head office in Calgary, Alberta.
2. CGF MFC is the administrator for the Funds, all of which are sold in every province and territory of Canada through independent financial advisors. CGF MFC will prepare and file annual and interim MRFPs for all Funds as required by NI 8I-106, except to the extent modified by this decision.
3. Neither CGF MFC nor the Funds are in default of securities legislation in the Jurisdictions or the Non-Principal Passport Jurisdictions.
4. The Funds became reporting issuers on December 19, 2008, the date on which a receipt for the final simplified prospectus in respect of each of the Funds was issued by the Commission, as principal regulator, on its own behalf and evidencing the receipt of the securities regulatory authority or regulator in Ontario and each of the Non-Principal Passport Jurisdictions.
5. The fiscal year end of each Fund is December 31. Pursuant to section 4.2 of NI 81-106, the Funds must prepare an annual MRFP for the period ended December 31, 2008.
6. The Funds have not been or will not be offered for sale to the public until January 1, 2009, March 1, 2009 or July 1, 2009, depending on the Fund. No securities, other than for seed capital purposes, were issued between the date of formation of the Funds and December 31, 2008. Accordingly, there are no measures of performance to report on in the management discussion portion of the MRFP for the reporting period.
7. The limited activities of the Funds for the period from December 19, 2008 to December 31, 2008 do not provide any meaningful information in the financial highlights for the purposes of the preparation of a MRFP.
8. Form 81-106F1 requires that a MRFP contain a discussion of how changes to the investment fund over the financial year affected the overall level of risk associated with an investment in the investment fund, a summary of the results of operations of the investment fund for the financial year to which the management discussion of fund performance pertains, a discussion of the recent developments affecting the investment fund, a discussion of any transactions involving related parties to the investment fund, disclosure of selected financial highlights for the investment fund and a summary of the investment fund's portfolio as at the end of the financial year of the investment fund to which the MRFP pertains. Given that the Funds were, or are to be, as the case may be, only offered for sale to the public following their fiscal year ends and therefore the Funds had not commenced building their respective portfolios as at December 31, 2008, and the fact that the Funds filed their final simplified prospectus only 13 days prior to their fiscal year end, no disclosure on these items can be meaningfully provided in the MRFP.
9. The expense to the Funds of preparing and filing MRFPs would not be justified in view of the benefit to be derived from receiving the MRFPs.
10. The Filer will prepare and file annual audited financial statements for the Funds as at December 31, 2008 as required by NI 81-I06.
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.