Titan Funds Incorporated and Titan Conservative Portfolio

Decision

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.

NI 81-106 Investment Fund Continuous Disclosure, s. 17.1 - exemption from the requirements in items 3.1, 4.1 and 4.3 of Form 81-106F1, Part B to permit the Portfolio to present information in the Management Report of Fund Performance in a manner applicable to money market funds.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 17.1, items 3.1, 4.1 and 4.3 of Form 81-106F1, Part B.

Citation: Titan Funds Incorporated, Re, 2008 ABASC 654

November 28, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA AND ONTARIO

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

TITAN FUNDS INCORPORATED

(the Filer or Titan)

AND

TITAN CONSERVATIVE PORTFOLIO

(the Portfolio or the Fund)

 

DECISION

Background

The securities regulatory authority or regulator in each of Alberta and Ontario (Decision Maker) has received an application from the Filer on behalf of the Portfolio for a decision under the securities legislation of Alberta and Ontario (the Legislation) for exemptive relief from the following requirements of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) (the Exemption Sought) in order to permit the Portfolio to present disclosure in its interim and annual management reports of fund performance in a manner applicable to money market funds:

1. Item 3.1 of Form 81-106F1, Part B to enable the Fund to provide only that disclosure applicable to money market funds;

2. Item 4.1 of Form 81-106F1, Part B to exempt the Fund from having to comply with subsection 15.3(6) and section 15.10 of NI 81-102 Mutual Funds (NI 81-102) based on the relief sought above; and

3. Item 4.3 of Form 81-106F1, Part B to exempt the Fund from including data on the annual compound returns of the Fund.

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

(a) the Alberta Securities Commission is the principal regulator for this application,

(b) the Filer has provided notice that section 4.7 of Multilateral Instrument 11-102 Passport System is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut (together with Alberta and Ontario, 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 NI 81-106, NI 81-102 and National Instrument 14-101 Definitions have the same meaning in this decision unless otherwise defined.

Representations

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

1. Titan is a corporation incorporated under the laws of Ontario and is the manager of the Portfolio. Titan's head office is in Calgary, Alberta.

2. The current investment objective of the Portfolio is to generate a high level of current income while preserving capital and providing the potential for growth in income over time by investing primarily in other mutual funds, fixed income securities or equity securities.

3. To achieve its investment objective, the Portfolio invests all of its assets, other than those required for management fees, operating expenses and redemptions, in units of the CC&L Conservative Portfolio (the Underlying Fund).

4. At a special meeting of unitholders of the Portfolio to be held on December 3, 2008, unitholders of the Portfolio will be asked to approve a proposed change to the investment objective of the Portfolio such that the Portfolio will become a money market fund (the Proposed Change).

5. The manager of the underlying fund is asking the unitholders of the underlying fund to approve, at a meeting to be held on December 11, 2008, a similar change to the investment objective of the underlying fund such that the underlying fund will also become a money market fund. The manager of the underlying fund is Connor, Clark & Lunn Managed Portfolios Inc. and is not an affiliate or associate of Titan.

6. Subject to receipt of unitholder approval, it is expected that the Proposed Change will be effective on or about December 15, 2008, or such other date as determined by Titan. In connection with the implementation of the Proposed Change, the Portfolio will change its name to "Titan Money Market Fund".

7. To achieve its investment objective, the Fund will, subject to the underlying fund's investment objective being changed to that of a money market fund, continue to invest all of its assets, other than those required for management fees, operating expenses and redemptions, in units of the underlying fund, or another money market fund selected by Titan. Any assets not invested in the underlying fund or another money market fund will be held in cash or instruments that are included in the definition of "money market fund" in section 1.1 of NI 81-102.

8. On October 10, 2008, Titan issued a press release announcing the Proposed Change and the meeting date and record date for the special meeting of unitholders of the Portfolio. On October 20, 2008, Titan filed, with respect to the Proposed Change, a material change report and amendments to the simplified prospectus and annual information form of the Portfolio in the Jurisdictions.

9. Following the approval and implementation of the proposed change to its investment objectives, the underlying fund will be a "money market fund" as defined in Section 1.1 of NI 81-102.

10. Because substantially all of the assets of the Fund will be invested in units of the underlying fund, the Fund will not be a "money market fund" as defined in Section 1.1 of NI 81-102.

11. The Fund and the underlying fund will be reporting issuers in all of the Jurisdictions.

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.

"Blaine Young"
Associate Director, Corporate Finance