Securities Law & Instruments


Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to open-ended mutual fund trusts for extensions of the lapse date of their prospectus – Filer will incorporate offering of the mutual funds under the same offering documents as related family of funds when they are renewed – Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectus.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).

July 15, 2019

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
1832 ASSET MANAGEMENT L.P.
(the Filer)

AND

1832 AM INVESTMENT GRADE U.S. CORPORATE BOND POOL
SCOTIA PRIVATE DIVERSIFIED INTERNATIONAL EQUITY POOL
SCOTIA PRIVATE INTERNATIONAL GROWTH EQUITY POOL
SCOTIA ARIA EQUITY BUILD PORTFOLIO
SCOTIA ARIA EQUITY DEFEND PORTFOLIO
SCOTIA ARIA EQUITY PAY PORTFOLIO

(the Funds)

DECISION

Background

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 (the Legislation) that the time limits for the renewal of the simplified prospectus of the Funds dated October 9, 2018 (the Current Prospectus) be extended to those time limits that would be applicable as if the lapse date of the Current Prospectus was November 9, 2019 (the Exemption Sought).

Under the Process for 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 each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 – Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations

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

1.             Each Fund is an open-ended mutual fund trust governed by the laws of Ontario and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.

2.             Each Fund currently distributes its securities in the Jurisdictions pursuant to the Current Prospectus.

3.             The lapse date of the Current Prospectus under the Legislation is October 9, 2019 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of securities of a Fund would have to cease on the Current Lapse Date unless: (i) the Fund files a pro forma simplified prospectus at least 30 days prior to its Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after its Current Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days after its Current Lapse Date.

4.             The Filer is the manager of the Funds. The Filer is also the manager of 97 other mutual funds (collectively, the Other Funds), that are currently offered in each of the provinces and territories of Canada under a simplified prospectus with a lapse date of November 9, 2019 (the Other Funds Prospectus).

5.             The Filer is an Ontario limited partnership, which is wholly-owned, indirectly, by The Bank of Nova Scotia (BNS). The general partner of the Filer is 1832 Asset Management G.P. Inc., an Ontario corporation wholly-owned directly by BNS with its head office in Ontario.

6.             The Filer is registered as: (i) a portfolio manager in all of the provinces of Canada and in the Northwest Territories and the Yukon; (ii) an exempt market dealer in all of the provinces of Canada (except Prince Edward Island and Saskatchewan); (iii) an investment fund manager in Ontario, Québec, Newfoundland and Labrador and the Northwest Territories; and (iv) a commodity trading manager in Ontario.

7.             Neither the Filer nor any of the Funds is in default of securities legislation in any of the Jurisdictions.

8.             The Filer wishes to combine the simplified prospectus of the Funds with the simplified prospectus of the Other Funds in order to reduce renewal, printing and related costs. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of such funds in the Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer’s fund platform. As the Funds and the Other Funds are managed by the Filer and are part of the same fund family, offering them under the same prospectus will allow investors to more easily compare their features.

9.             It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal simplified prospectus, annual information form and fund facts documents (collectively, the Renewal Documents) of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the Renewal Documents of the Other Funds can be filed earlier with the Renewal Documents of the Funds.

10.          The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds Prospectus. The ability to file the simplified prospectus of the Funds with those of the Other Funds will ensure that the Filer can make the operational and administrative features of the Funds and the Other Funds consistent with each other, if necessary.

11.          If the Exemption Sought is not granted, it will be necessary to renew the Renewal Documents of the Funds twice within a short period of time in order to consolidate the simplified prospectus of the Funds with the simplified prospectus of the Other Funds.

12.          There have been no material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus and current fund facts document(s) of each Fund represents current information regarding such Fund.

13.          Given the disclosure obligations of the Funds, should any material change in the affairs of any of the Funds occur, the Current Prospectus and current fund facts document of the applicable Fund(s) will be amended as required under the Legislation.

14.          New investors of the Funds will receive delivery of the most recently filed fund facts documents of the applicable Fund(s). The Current Prospectus will still be available upon request.

15.          The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectus or the respective fund facts documents and therefore will not be prejudicial to the public interest.

Decision

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 Exemption Sought is granted.

“Darren McKall”
Manager,
Investment Funds and Structured Products Branch
Ontario Securities Commission