Securities Law & Instruments


National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- reporting relief granted from the monthly reporting requirement under the Act -- the portfolio manager, on behalf of a mutual fund, will purchase and sell mortgages from and to affiliates of the portfolio manager -- relief granted to permit alternative reporting of related party transactions.

Applicable Legislative Provisions

Securities Act (Ontario), ss. 117(1)(a), 117(1)(c).

June 28, 2011




(the Jurisdiction)








(the Filer)



The principal regulator of 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 an exemption from the obligation to file a report of every transaction of purchase or sale of securities between Investors Canadian Corporate Bond Fund (the Fund) and any related person or company, and of every purchase or sale effected by the Fund with respect to which the related person or company received a fee either from the Fund or from the other party to the transaction, or both, within 30 days after the end of the month in which it occurs (the Exemption Sought).

Under the Process of 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, New Brunswick, Nova Scotia, and Newfoundland and Labrador.


Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this Decision unless otherwise defined. The following additional terms shall have the following meanings:

"Applicable Jurisdictions" means British Columbia, Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia and Newfoundland and Labrador.

"Manager" means I.G. Investment Management, Ltd. and any of its affiliates registered in the category of an Investment Fund Manager or Advisor under NI 31-103;

"NI 31-103" means National Instrument 31-103 -- Registration Requirements, Exemptions and Ongoing Registrant Obligations;

"NI 81-102" means National Instrument 81-102 Mutual Funds;

"NI 81-106" means National Instrument 81-106 Investment Fund Continuous Disclosure;

"NI 81-107" means National Instrument 81-107 Independent Review Committee for Investment Funds;

"NP 29" means National Policy Statement No. 29 Mutual Funds Investing in Mortgages; and

"Related Party" means Investors Group Trust Co. Ltd. and its affiliates.


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

1. The Filer is the Manager, portfolio advisor and trustee of the Fund. The head office of the Filer is located in Winnipeg, Manitoba, and it also has offices in Ontario and Quebec. The Ontario Securities Commission is the principal regulator for the Exemption Sought because there are no equivalent provisions in the legislation of Manitoba (or Quebec)

2. The Fund is a trust established under the laws of Manitoba. The Fund's investment objective and strategies permit it to invest in mortgages on improved real estate in Canada. To achieve its objective, the Fund intends to invest up to 10% of its net assets in a diversified portfolio of first insured and non-insured mortgages. Most of the Fund's mortgage portfolio will be invested in single family residential mortgages, as well as in mortgages on condominiums, multi-unit dwellings and commercial properties, all as permitted under NP 29.

3. The Fund follows the standard investment restrictions and practices applicable to mutual funds pursuant to NI 81-102 and applicable Legislation, except to the extent that the Fund has obtained (or is in the process of obtaining) regulatory relief to deviate from such requirements and, in particular, relief from the self-dealing restrictions under section 4.2 of NI 81-102 and the mortgage investment restrictions under paragraphs 2.3(b) and (c) of NI 81-102. Also, as the Manager is registered as an advisor under NI 31-103 and is a "responsible person" as defined in the Legislation, the Filer is seeking relief from section 13.5(2) of NI 31-103 which prohibits certain trades between the Fund and a responsible person. The Manitoba Securities Commission is the principal regulator for purposes of these applications.

4. The Fund is an open-end mutual fund, and is a reporting issuer in each province and territory of Canada and is not on the list of defaulting issuers maintained under the legislation of the Applicable Jurisdictions.

5. The Related Party is an associate or affiliate of the Manager. The Fund wishes to purchase mortgages for up to 10% of its portfolio from the Related Party.

6. The Fund may acquire mortgages from both the Manager and from arm's length sources. Most often, however, it is expected that all, or substantially all, of its mortgages will be acquired from or through the Manager. The valuation methods for mortgages acquired by the Fund are stipulated in section III of NP 29, which will be applicable to the Fund.

7. The Manager (or its affiliates) has agreed to repurchase from the Fund any mortgage that is not a valid first mortgage or if a mortgage purchased from the Related Party is in default.

8. Neither the Related Party, nor any of its directors, officers or employees participates in the formulation of investment decisions made on behalf of, or advice given to, the Fund by the Manager, and in the circumstances where the Related Party holds mortgages beneficially on behalf of the Fund, no director officer or employee actively involved in the formulation of investment decisions for the Fund is involved in the mortgage business of the Related Party. In all circumstances, the decisions to purchase mortgages from the Related Party for the Fund's portfolio are made based on the judgement or responsible persons uninfluenced by considerations other than the best interests of the Fund.

9. The Manager and its Related Party are "affiliates" within the meaning of the Legislation and accordingly, the Manager is deemed to own securities beneficially owned by the Related Party.

10. The Manager has appointed an independent review committee (IRC) under NI 81-107 for the Funds. The IRC of the Fund has considered the policies and procedures of the Filer and has determined that the proposed Related Party transactions in mortgages achieve a fair and reasonable result for the Fund in accordance with section 5.2(2) of NI 81-107.

11. To the extent that the Fund is purchasing mortgages from, or selling mortgages to, a Related Party, this fact is set out, and will continue to be set out, in the annual information form of the Fund.

12. The legislation in the Applicable Jurisdictions requires the filing of a report by the Filer with respect to each transaction in mortgages between the Fund and a Related Party and with respect to each transaction in mortgages effected by the Manager in respect of which the Related Party receives a fee either from the Manager or from the other party to the transaction or from both.

13. Such report is to be filed within 30 days after the end of the month in which the transaction occurs, disclosing the issuer of the securities purchased or sold, the class or designation of the securities, the amount and number of securities and the consideration paid, together with the name of any related person receiving a fee on the transaction, the name of the person or company that paid the fee and the amount of the fee paid.

14. NI 81-106 requires that the Fund prepare and file annual and interim management reports of fund performance that include a discussion of transactions involving the Related Parties to the Fund. When discussing portfolio transactions with Related Parties, NI 81-106 requires the Fund to include the dollar amount of commission, spread, or any other fee paid to any Related Party in connection with a portfolio transaction.


The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that Exemption Sought is granted provided that:

(1) the annual and interim management reports of fund performance for the Fund disclose:

(i) the name of the Related Party;

(ii) the amount of fees paid to each Related Party; and

(iii) the person or company who paid the fees if they were not paid by the Fund; and

(2) the records of portfolio transactions maintained by the Fund include, separately for every portfolio transaction effected by the Fund through a Related Party:

(i) the name of the Related Party;

(ii) the amount of fees paid to each Related Party; and

(iii) the person or company who paid the fees.

"C.W. Scott"
Ontario Securities Commission
"James Turner"
Ontario Securities Commission