National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to mutual funds for extension of lapse date of prospectus for 5 days -- Lapse date extended due to Filer's failure to file a pro forma prospectus not less than thirty days prior to the lapse date as per section 62(2) of the Securities Act (Ontario).
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
March 28, 2014
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF PORTFOLIO STRATEGIES SECURITIES INC. (the Filer) AND IN THE MATTER OF THE FUNDS LISTED IN SCHEDULE A (the Funds)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption that the time limits pertaining to filing the renewal prospectus of the Funds be extended as if the lapse date of the amended and restated simplified prospectus of the Funds dated July 31, 2013, amending and restating the amended and restated simplified prospectus dated May 13, 2013, which amended and restated the simplified prospectus dated March 28, 2013 (the Current Prospectus) is April 2, 2014 (the Requested Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission (OSC) 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 is intended to be relied upon in each of the provinces of Alberta, British Columbia, Manitoba, and Saskatchewan (together with Ontario, the Jurisdictions).
Terms defined in National Instrument 14-101 -- Definitions and National Instrument 81-101 -- Mutual Funds Prospectus Disclosure (NI 81-101) have the same meaning if used in this decision, unless otherwise defined in this decision.
The decision is based on the following facts as represented by the Filer:
1. The Filer is the manager of the funds listed in Schedule A hereto.
2. The Filer is a corporation existing under the laws of the Province of Alberta, is registered with the OSC as an investment fund manager, and is a dealer member of the IIROC. The head office of the Filer is in Ontario and so the OSC is the principal regulator.
3. Units of the Funds are currently qualified for distribution in each of the Jurisdictions under the Current Prospectus and the Funds are reporting issuers in each of the Jurisdictions.
4. Neither the Funds, nor the Filer, are in default of securities legislation in any of the Jurisdictions.
5. Pursuant to the Legislation, the "lapse date" for the Current Prospectus is March 28, 2014 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of units of the Funds would have to cease on the Current Lapse Date unless (i) the Funds file a pro forma simplified prospectus for the Funds at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the simplified prospectus is obtained within 20 days of the Current Lapse Date. However, the Filer is unable to rely on the foregoing since the pro forma simplified prospectus for the Funds was filed on February 28, 2014 instead of February 26, 2014. Accordingly, under the Legislation, the distribution of units of the Funds would have to cease on the Current Lapse Date unless the final simplified prospectus (the Final Renewal Prospectus) is filed by the Current Lapse Date and a receipt for the final simplified prospectus is obtained by the Current Lapse Date.
6. Given the ongoing review of the pro forma simplified prospectus and subsequent comments by the OSC, the Filer is requesting additional time by means of an extension of the Current Lapse Date from March 28, 2014 to April 2, 2014 to permit the Filer to respond to the OSC's comments and file the Final Renewal Prospectus for the Funds without resulting in the Funds being forced to cease distribution of units because the Current Prospectus has lapsed.
7. The Filer will file the Final Renewal Prospectus not later than ten days after April 2, 2014.
8. There have been no undisclosed material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus represents current information regarding each Fund.
9. The Requested Relief will not materially affect the currency or accuracy of the information contained in the Current Prospectus and therefore will not be prejudicial to the public interest.
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 the Requested Relief is granted.