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Navigator American Value Investment Fund et al.
Headnote
MRRS for Exemptive Relief Applications - Extension of lapse date to permit theintegration of the operation and administration of three groups of mutual funds and theconsolidation of the disclosure materials of such funds.
Statutes Cited
Securities Act, R.S.O. 1990, c. S. 5, as am., ss 62(1), 62(2), and 62(5)
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
NAVIGATOR AMERICAN VALUE INVESTMENT FUND, NAVIGATOR ASIA-PACIFIC FUND,NAVIGATOR CANADIAN FOCUSED GROWTH PORTFOLIO, NAVIGATOR CANADIAN GROWTH FUND,NAVIGATOR CANADIAN INCOME FUND, NAVIGATOR CANADIAN TECHNOLOGY FUND, NAVIGATOR EUROPEAN EQUITY FUND,NAVIGATOR JAPAN FUND, NAVIGATOR MONEY MARKET FUND, NAVIGATOR SAMI FUND, (collectively, the "Navigator Funds")
MRRS DECISION DOCUMENT
WHEREAS the Canadian securities regulatory authority or regulator (the"Decision Maker") in each of the Provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia (the "Jurisdictions") hasreceived an application from Navigator Fund Company Ltd. (the "Applicant") on behalfof the Navigator Funds for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that the time limits prescribed by the Legislation forfiling a simplified prospectus and annual information form in respect of the NavigatorFunds be extended;
AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application:
AND WHEREAS the Applicant has represented to the Decision Makers that:
1. The Applicant is the manager of the Navigator Funds and is an indirectsubsidiary of Nova Bancorp Group (Canada) Ltd.
2. The Navigator Funds comprise ten open-end mutual fund trusts, some of whichwere established under the laws of the Province of Manitoba and some of whichwere established under the laws of the Province of British Columbia.
3. Each of the Navigator Funds is a reporting issuer in the Jurisdictions, and is notin default of any requirements of the Legislation or the rules or regulations madethereunder.
4. Nova Bancorp Investment Management Ltd. ("NBIML"), an affiliate of theApplicant, is the manager of the Nova Funds which comprise five open-endmutual fund trusts, each of which was established under the laws of the Provinceof Ontario. The funds are the Nova Canadian Equity Fund, Nova InternationalEquity Fund, Nova Balanced Fund, Nova Bond Fund and Nova Short Term Fund(collectively, the "Nova Funds").
5. On June 8, 2000, the arrangement among Strategic Value Corporation, NovaBancorp Wealth Management Inc. and Nova Bancorp Group (Canada) Ltd. wascompleted, as a result of which StrategicNova Funds Management Inc. (thennamed SVC O'Donnell Funds Management Inc.) became an indirect subsidiaryof Nova Bancorp Group (Canada) Ltd. and an affiliate of the Applicant.
6. StrategicNova Funds Management Inc. ("StrategicNova"), an affiliate of theApplicant, is the manager of the SVC O'Donnell Funds (hereinafter defined)which comprise thirty open-end mutual funds of which five are mutual fundcorporations incorporated under the federal laws of Canada and twenty-five aretrusts established under the laws of the Province of Ontario. The funds areO'Donnell American Sector Growth Fund, O'Donnell Balanced Fund, O'DonnellCanadian Emerging Growth Fund, O'Donnell Canadian Large-Cap Fund,O'Donnell Growth Fund, O'Donnell High Income Fund, O'Donnell Money MarketFund, O'Donnell U.S. High Income Fund, O'Donnell U.S. Mid-Cap Fund,O'Donnell U.S. Mid-Cap RSP Fund, O'Donnell World Equity Fund, O'DonnellWorld Equity RSP Fund, and O'Donnell World Precious Metals Fund, StrategicValue American Equity Fund Ltd., Strategic Value Asia and Emerging MarketsFund, Strategic Value Canadian Balanced Fund, Strategic Value CanadianEquity Fund Ltd., Strategic Value Canadian Equity Value Fund, Strategic ValueCanadian Small Companies Fund, Strategic Value Commonwealth Fund Ltd.,Strategic Value Dividend Fund Ltd., Strategic Value Europe Fund, StrategicValue Europe RSP Fund, Strategic Value Global Balanced RSP Fund, StrategicValue Government Bond Fund, Strategic Value Income Fund, Strategic ValueInternational Fund Ltd., Strategic Value Money Market Fund, Strategic ValueWorld Balanced Fund and Strategic Value World Balanced RSP Fund.
7. Each of the Navigator Funds is qualified for distribution in the Jurisdictions bymeans of a simplified prospectus and annual information form dated August 24,1999 (the "Prospectus").
8. Pursuant to the Legislation, the earliest lapse date in the Jurisdictions for thedistribution of units under the Prospectus for the Navigator Funds is August 24,2000.
9. Nova Bancorp Group (Canada) Ltd. and the Applicant, together with its otheraffiliates, NBIML and StrategicNova, are in the process of integrating theoperation and administration of the Navigator Funds, the Nova Funds and theSVC O'Donnell Funds and propose to consolidate the disclosure materials of theNavigator Funds with those of the Nova Funds and the SVC O'Donnell Funds.The changes proposed to the operation and administration of such funds, whichare anticipated to make the Part A sections of the simplified prospectus for thefunds substantially similar thus permitting the simplified prospectuses to beconsolidated under National Instrument 81-101 Mutual Fund ProspectusDisclosure, include the change of managers of the Navigator Funds and theNova Funds from the Applicant and NBIML, respectively, in each case to theiraffiliate StrategicNova, the manager of the SVC O'Donnell Funds. In the case ofthe Nova Funds, it is anticipated that such change will be effected on or aboutAugust 15, 2000. In the case of the Navigator Funds, such change of managerrequires not less than 90 days prior notice to unitholders under the constatingdocuments of the Navigator Funds. It is anticipated that such change ofmanager will occur on or about November 4, 2000 after the expiry of the noticeperiod to unitholders, unless the constating documents of the Navigator Fundsare amended with the approval of the unitholders to abridge such time period. Aproposed amendment to the constating documents of the Navigator Funds topermit the manager of the Navigator Funds to be changed to StrategicNovawithout the expiry of the 90 day notice period is to be voted upon by unitholdersof the Navigator Funds at meetings of unitholders of the Navigator Fundsscheduled for August 28, 2000. The relevant results of the unitholder meetingsscheduled for August 28, 2000 will be included in the renewal prospectus andannual information form for the Navigator Funds.
10. The Applicant seeks to extend the lapse date for the Prospectus for theNavigator Funds to October 31, 2000 in order to facilitate the simultaneousrenewal of the simplified prospectuses and annual information forms for all of theNavigator Funds, the Nova Funds and the SVC O'Donnell Funds, and therebyallow the unitholders of the Navigator Funds, the Nova Funds and the SVCO'Donnell Funds to benefit from the reduced costs attributable to the economiesof scale associated with such a renewal.
11. A press release has been issued disclosing the forthcoming change of themanager of the Navigator Funds and the matters that would be significantchanges (as defined in National Instrument 81-102 Mutual Funds) for theNavigator Funds that are being voted upon at unitholders meetings of theNavigator Funds scheduled for August 28, 2000. An amendment to theProspectus for the Navigator Funds will shortly be filed describing such matters.There have been no other significant changes to the affairs of the NavigatorFunds since the date of the Prospectus which requires an amendment to theProspectus and in respect of which an amendment to the simplified prospectushas not been prepared and filed in accordance with the Legislation.
12. The Applicant will comply with the requirements in connection with theoccurrence of a significant change with respect to the affairs of the NavigatorFunds.
AND WHEREAS pursuant to the System this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS the Decision Makers are of the opinion that it would not beprejudicial to the public interest to make the Decision;
AND WHEREAS each of the Decision Makers is satisfied that the test containedin the Legislation that provides the Decision Makers with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that thetime limits provided by the Legislation as they apply to the distribution of units underthe Prospectus for the Navigator Funds are hereby extended to the time limits thatwould be applicable if the lapse date for the distribution of units under the Prospectuswas October 31, 2000.
August 21st, 2000.
"William R. Gazzard"