Mutual Reliance Review System for Exemptive Relief Applications -- Extension of lapse date for mutual fund prospectus for a specified period of time.
Applicable Ontario Statute
Securities Act, R.S.O., 1990, c. S.5, as amended, ss. 62(1).
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA,
ONTARIO, QUEBEC, NOVA SCOTIA, PRINCE EDWARD ISLAND,
NEW BRUNSWICK, AND NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
AGF FUNDS INC.
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
(each a "Pool", collectively the "Pools")
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Makers") in the provinces and territories of Canada set out above (the "Jurisdictions") has received an application (the "Application") from AGF Funds Inc. ("AGF"), the manager of the Pools, on behalf of each Pool, for a decision (the "Decision") pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the time periods prescribed by the Legislation for filing the pro forma simplified prospectus and pro forma annual information form (together, the "Renewal Prospectus") of the Pools be extended to the time periods that would be applicable if the lapse date for the distribution of the units of the Pools was December 26, 2003;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the "System"), the Ontario Securities Commission is the principal regulator for this Application;
AND WHEREAS AGF has represented to the Decision Makers that:
1. AGF is a corporation amalgamated under the laws of Ontario and is the trustee and manager of each Pool. The head office of AGF is located in Ontario. AGF is registered in Ontario as a dealer in the category of mutual fund dealer, as an adviser in the category of investment counsel and portfolio manager, and as a commodity trading manager.
2. Each of the Pools is an open-ended mutual fund trust established under the laws of Ontario by a Declaration of Trust.
3. Each of the Pools is a reporting issuer under the Legislation and is not in default of any requirement of the Legislation.
4. Units of the Pools are currently qualified for distribution in each of the Jurisdictions pursuant to a simplified prospectus and annual information form dated December 20, 2002 (the "Current Prospectus"). The MRRS decision document evidencing final receipts of the securities regulatory authorities in each of the Jurisdictions in respect of the Current Prospectus was issued on December 23, 2002. The earliest lapse date under the Legislation for distribution of units of the Pools under the Current Prospectus is December 20, 2003.
5. There have been no material changes in the affairs of the Pools since the date of the Current Prospectus in respect of which an amendment to the Current Prospectus has not been prepared and filed in accordance with the Canadian securities laws.
6. AGF intends to establish new mutual funds (the "New Top Funds") designed to provide investors with a professionally managed portfolio to suit individual investment objectives, risk tolerance and investment time horizons. Each New Top Fund will invest its assets (other than cash and cash equivalents) in underlying funds, which will consist of the Pools, offered by AGF.
7. AGF will seek the approval of the Decision Makers to allow the fund-of-fund structures of the New Top Funds to reflect the fund-of-fund structures permitted in the proposed amendments to National Instrument 81-102 Mutual Funds, anticipated to be in effect December 31, 2003.
8. AGF would like to qualify the New Top Funds for distribution in each of the Jurisdictions by including the New Top Funds in the Renewal Prospectus of the Pools.
9. If the New Top Funds are established in January, 2004, the New Top Funds will have a longer period to qualify as "mutual fund trusts" for the purposes of the Income Tax Act (Canada).
10. Without an extension to the Pools' lapse date, AGF will have to file in final form the Renewal Prospectus not later than ten days following December 20, 2003 and obtain a receipt for the Renewal Prospectus within 20 days following December 20, 2003, which prevents AGF from including the New Top Funds in the Renewal Prospectus for the reason discussed in paragraph 9, and shortly thereafter AGF will have to file a preliminary and amended and restated simplified prospectus and annual information form to incorporate the New Top Funds and the Pools in one document, paying the costs of preparing, printing and distributing the prospectuses twice.
AND WHEREAS pursuant to the System this MRRS Decision Document evidences the Decision of each Decision Maker;
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Makers with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers pursuant to the Legislation is that the lapse date for filing the Renewal Prospectus of the Pools be extended to the time period that would be applicable if the lapse date for the distribution of the units of the Pools was December 26, 2003, provided:
(a) the Renewal Prospectus of the Pools is filed in final form no later than January 5, 2004, and
(b) a final receipt is issued for the Renewal Prospectus no later than January 15, 2004.
November 18, 2003.