Securities Law & Instruments

Headnote
Exemption from the requirement to deliver comparative annual financial statements for the year-ending September 30, 2003, to registered securityholders of certain mutual funds.

Statutes Cited
Securities Act (Ontario), R.S.O. 1990 c. S.5, as am., ss. 79 and 80(b)(iii).



IN THE MATTER OF

THE SECURITIES LEGISLATION OF
ALBERTA, ONTARIO, NOVA SCOTIA,
NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

THE FUNDS LISTED IN SCHEDULE "A"
(the "Funds")

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta, Ontario, Nova Scotia, Newfoundland and Labrador (the "Jurisdictions") has received an application (the "Application") from the Funds and AGF Funds Inc. ("AGF"), the manager of the Funds and funds to be established by AGF in the future (the "Future Funds"), for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirement to deliver comparative annual financial statements of the Funds to certain securityholders of the Funds shall not apply unless they have requested to receive them.

AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS, unless otherwise defined, the terms herein have the meaning set out in National Instrument 14-101 Definitions;

AND WHEREAS AGF has represented to the Decision Makers that:

(a) The Funds are either open-ended mutual fund trusts, separate classes of mutual fund corporations, or mutual fund corporations governed by the laws of Ontario.

(b) AGF acts as manager of the Funds set out in Schedule "A" and, in the case of its Funds which are trusts, it is the trustee of such Funds.

(c) The Funds are reporting issuers in each of the Jurisdictions and are not in default of any requirements of the Legislation.

(d) Securities of the Funds, except AGF Managed Futures Fund, are presently offered for sale on a continuous basis in provinces and territories of Canada pursuant to a simplified prospectus. Securities of AGF Managed Futures Fund are presently offered for sale on a continuous basis in provinces and territories of Canada pursuant to a long form prospectus.

(e) Each of the Funds is required to deliver annually, within 140 days of its financial year-end, to each holder of its securities ("Securityholders"), comparative financial statements in the prescribed form pursuant to the Legislation.

(f) AGF will send to Securityholders who hold securities of the Funds in client name (whether or not AGF is the dealer) (the "Direct Securityholders") in each year, a notice advising them that they will not receive the annual financial statements of the Funds for the year then ended unless they request same, and providing them with a request form to send back, by fax or prepaid mail, if they wish to receive the annual financial statements. The notice will advise the Direct Securityholders where annual financial statements can be found on the Internet (including on the SEDAR website) and downloaded. AGF would send such financial statements to any Direct Securityholder who requests them in response to such notice or who subsequently requests them.

(g) Securityholders who hold their securities in the Funds through a nominee will be dealt with pursuant to National Instrument 54-101.

(h) Securityholders will be able to access annual financial statements of the Funds either on the SEDAR website or on the website of AGF or by calling AGF's toll-free phone line. Top ten holdings which are updated on a monthly basis will also be accessible to Securityholders on AGF's website or by calling AGF's toll-free phone line.

(i) There would be substantial cost savings if the Funds are not required to print and mail annual financial statements to those Direct Securityholders who do not want them.

(j) The Canadian Securities Administrators ("CSA") have published for comment proposed National Instrument 81-106 ("NI 81-106") which, among other things, would permit a Fund not to deliver annual financial statements to those of its Securityholders who do not request them, if the Funds provide each Securityholder with a request form under which the Securityholder may request, at no cost to the Securityholder, to receive the mutual fund's annual financial statements for that financial year.

(k) NI 81-106 would also require a Fund to have a toll-free telephone number for, or accept collect calls from, persons or companies that want to receive a copy of, among other things, the annual financial statements of the Fund.

AND WHEREAS under the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

AND WHEREAS the Decision Makers are satisfied that making the Decision will not adversely affect the rule-making process with respect to proposed National Instrument 81-106 and is consistent with National Instrument 54-101;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

(i) the Funds; and

(ii) the Future Funds

shall not be required to deliver their comparative annual financial statements for the year ended September 30, 2003 to their Direct Securityholders other than those Direct Securityholders who have requested to receive them provided that:

(a) AGF shall file on SEDAR, under the annual financial statements category, confirmation of mailing of the request forms that have been sent to the Direct Securityholders as described in clause (f) of the representations within 90 days of mailing the request forms;

(b) AGF shall file on SEDAR, under the annual financial statements category, information regarding the number and percentage of requests for annual financial statements made by the return of the request forms, on a province-by-province basis within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing;

(c) AGF shall record the number and summary of complaints received from Direct Securityholders about not receiving the annual financial statements and shall file on SEDAR, under the annual financial statements category, this information within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing;

(d) AGF shall, if possible, measure the number of "hits" on the annual financial statements of the Funds on AGF's website and shall file on SEDAR, under the annual financial statements category, this information within 30 days after the end of each quarterly period beginning from the date of mailing the request forms and ending 12 months from the date of mailing; and

(e) AGF shall file on SEDAR, under the annual financial statements category, estimates of the cost savings resulting from the granting of this Decision within 90 days of mailing the request forms.

April 17, 2003.

"Paul M. Moore"
"Robert L. Shirriff"

 

SCHEDULE "A"

Equity Funds

Canadian

AGF Canadian AggressiveTM All-Cap Fund

AGF Canadian Dividend Fund

AGF Canadian Growth Equity Fund Limited

AGF Canadian Small Cap Fund

AGF Canadian Stock Fund

AGF Canadian Value Fund

International

AGF AggressiveTM Global Stock Fund

AGF AggressiveTM Growth Fund

AGF AggressiveTM Japan Class

AGF American Growth Class

AGF Asian Growth Class

AGF Canada Class

AGF China Focus Class

AGF Emerging Markets Value Fund

AGF European Equity Class

AGF Germany Class

AGF Global Equity Class

AGF India Fund

AGF International Stock Class

AGF International Value Class

AGF International Value Fund

AGF Japan Class

AGF Latin America Fund

AGF MultiManagerTM Class

AGF RSP American Growth Fund

AGF RSP European Equity Fund

AGF RSP International Equity Allocation Fund

AGF RSP International Value Fund

AGF RSP Japan Fund

AGF RSP MultiManagerTM Fund

AGF RSP World Companies Fund

AGF RSP World Equity Fund

AGF Special U.S. Class

AGF U.S. Value Class

AGF World Companies Fund

AGF World Equity Fund

AGF World Opportunities Fund

Specialty

AGF Canadian Resources Fund Limited

AGF Global Financial Services Class

AGF Global Health Sciences Class

AGF Global Real Estate Equity Class

AGF Global Resources Class

AGF Global Technology Class

AGF Precious Metals Fund

Balanced and Asset Allocation Funds

Canadian

AGF Canadian Balanced Fund

AGF Canadian Tactical Asset Allocation Fund

International

AGF American Tactical Asset Allocation Fund

AGF RSP American Tactical Asset Allocation Fund

AGF RSP World Balanced Fund

AGF World Balanced Fund

Fixed Income Funds

Canadian

AGF Canadian Bond Fund

AGF Canadian Conservative Income Fund

(formerly, AGF Canadian High Income Fund)

AGF Canadian Money Market Fund

AGF Canadian Total Return Bond Fund

International

AGF Global Government Bond Fund

AGF Global Total Return Bond Fund

AGF RSP Global Bond Fund

AGF Short-Term Income Class

AGF U.S. Dollar Money Market Account

Managed Futures

AGF Managed Futures Fund

Harmony Investment Pools

Harmony Americas Small Cap Equity Pool

Harmony Canadian Equity Pool

Harmony Canadian Fixed Income Pool

Harmony Money Market Pool

Harmony Overseas Equity Pool

Harmony RSP Americas Small Cap Equity Pool

Harmony RSP Overseas Equity Pool

Harmony RSP U.S. Equity Pool

Harmony U.S. Equity Pool

Class of AGF All World Tax Advantage Group Limited.