Securities Law & Instruments

Headnote

NP 11-203 -- section 2.8 of NI 44-101 -- notice of intention to be qualified to file a short form prospectus -- issuer will be a successor issuer under NI 44-101 through conversion from an income fund to a share corporation -- relief granted as disclosure regarding the predecessor issuer will effectively be the disclosure of the successor issuer -- predecessor issuer is qualified to file a short form prospectus

Applicable Legislative Provisions

National Instrument 44-101 Short Form Prospectus Distributions, ss. 2.8(1), 8.1.

December 29, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

CI FINANCIAL CORP.

(the "Filer")

 

DECISION

Background

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 relief pursuant to section 8.1 of National Instrument 44-101 -- Short Form Prospectus Distributions ("NI 44-101") from the requirement to file a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the filing of its first preliminary short form prospectus after the notice (the "Exemption Sought").

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

(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 British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (the "Passport Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer was incorporated under the laws of Ontario on November 12, 2008 for the purpose of becoming the successor issuer to CI Financial Income Fund (the "Fund") upon its conversion to a corporate structure, as described in more detail below.

2. The principal office of the Filer is located at 2 Queen Street East, Twentieth Floor, Toronto, Ontario.

3. The authorized share capital of the Filer consists of an unlimited number of common shares (the "Common Shares") and an unlimited number of preferred shares issuable in series. As of December 16, 2008, the Filer had 1 Common Share outstanding which is owned by the Fund.

4. The Fund is an unincorporated, open-ended trust governed by the laws of Ontario. The Fund was established in May 2006 in connection with the conversion of the former CI Financial Inc. to an income trust structure under a plan of arrangement completed on June 30, 2006.

5. Canadian International LP ("CI LP") is a limited partnership formed under the laws of Manitoba. The general partner of CI LP is an Ontario corporation called CI Financial General Partner Corp., which is wholly owned by the Fund. The operating subsidiaries of the CI group are owned by CI LP.

6. Both the Fund and CI LP are reporting issuers under applicable securities laws in each of the Provinces of Canada.

7. The Fund is qualified to file a prospectus in the form of a short form prospectus pursuant to Section 2.2 of NI 44-101 and filed a Notice of Intention to be qualified to file a short form prospectus with the Ontario Securities Commission dated February 12, 2007.

8. The Fund and CI LP are proposing to undertake a conversion (the "Conversion") of the Fund into a corporate structure by way of a statutory plan of arrangement. Under the Conversion, the holders of units of the Fund ("Fund Unitholders") and holders of exchangeable Class B limited partnership units of CI LP ("Exchangeable LP Unitholders") will, if certain conditions are satisfied or waived, exchange their respective units for Common Shares of the Filer. If implemented, it is expected that the Conversion will be effective on or about January 1, 2009.

9. The Conversion from a unit trust structure to a share corporation was subject to voting unitholder and court approval and is subject to other conditions. A management information circular was prepared and mailed to unitholders in connection with the Conversion. The Conversion will be completed pursuant to a statutory plan of arrangement under the Business Corporations Act (Ontario) that was approved by unitholders at a joint special meeting held on December 19, 2008 and by the Ontario Superior Court of Justice on December 22, 2008.

10. Upon completion of the Conversion, the Filer will become the successor reporting issuer in each of the provinces in Canada, and it is intended that the Filer's Common Shares will be listed on the Toronto Stock Exchange.

11. The Filer anticipates that it may wish to file a preliminary prospectus (either in the form of a short form prospectus or a short form base shelf prospectus) (a "Preliminary Prospectus") early in January 2009, relating to the offering or potential offering of securities (including Common Shares, debt securities or subscription receipts) of the Filer.

12. Following the receipt of regulatory approvals in respect of such a filing, the Filer would file a final prospectus (in the form of a short form prospectus or a short form base shelf prospectus, as applicable).

13. In anticipation of the filing of a Preliminary Prospectus, and assuming the Conversion has been completed, the Filer intends to file the Notice of Intention to be qualified to file a short form prospectus on or about January 2, 2009. In the absence of the Exemption Sought, the Filer will not be qualified to file a Preliminary Prospectus until 10 business days from the date upon which the Notice of Intention is filed.

14. Pursuant to the qualification criteria set forth in Section 2.2 of NI 44-101, following the Conversion, the Filer will be qualified to file a short form prospectus on the basis that it will satisfy the requirements of Section 2.2 of NI 44-101 and, as successor issuer, can make use of the exemption provided under Section 2.7(2) of NI 44-101 to qualify to file a prospectus in the form of a short form prospectus. As such, the Filer would also be eligible to file a short form prospectus in the form of a base shelf prospectus under Section 2.2 of NI 44-102.

15. Notwithstanding Section 2.2 of NI 44-101, Section 2.8(1) of NI 44-101 provides that an issuer is not qualified to file a short form prospectus unless it has filed a notice declaring its intention to be qualified to file a short form prospectus at least 10 business days prior to the issuer filing its first preliminary short form prospectus.

16. The Filer will not satisfy the requirement in Section 2.8(1) of NI 44-101 until 10 business days after it files a Notice of Intention in early January 2009, and will not be qualified to file a Preliminary Prospectus during that time, unless the Exemption Sought is granted.

17. The short form prospectus or a short form base shelf prospectus of the Filer will incorporate by reference the documents that would be required to be incorporated by reference under item 11 of Form 44-101F1 in a short form prospectus or short form base shelf prospectus of the Fund.

Decision

The Decision Maker 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 pursuant to the Legislation is that the Exemption Sought is granted, provided that, at the time the Filer files its Notice of Intention, the Filer meets the requirements of (i) Section 2.2(a), (b), (c) and (e) of NI 44-101, and (ii) the exemption for successor issuers set forth in Section 2.7(2) of NI 44-101.

"Jo-Anne Matear"
Assistant Manager, Corporate Finance, Team #3