National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to fund for extension of the lapse date of prospectus -- Filer will incorporate a new fund into an existing prospectus that qualifies units of an existing fund for distribution -- Extension of lapse date will not affect the currency or accuracy of the information contained in the prospectuses.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 62(5).
September 28, 2020
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 PURPOSE INVESTMENTS INC. (the Filer or Manager) AND IN THE MATTER OF PURPOSE STRUCTURED EQUITY YIELD PORTFOLIO (the Fund)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Fund 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 Fund (the Prospectus) be extended to those time limits that would apply if the lapse date was October 23, 2020 (the Requested Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(i) the Ontario Securities Commission is the principal regulator for this application; and
(ii) the Filer has provided notice that subsection 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).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision unless otherwise defined.
This decision is based on the following facts represented by the Filer.
1. The Manager is a corporation amalgamated under the laws of the Province of Ontario. The Manager's head office is located in Toronto, Ontario.
2. The Manager is registered as a portfolio manager in British Columbia, Ontario and Québec, an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan, a commodity trading manager in Ontario and an investment fund manager in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan. The Manager is the investment fund manager of the Fund.
3. The Fund is an open-end mutual fund established under the laws of Ontario, and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
4. Neither the Manager nor the Fund are in default of securities legislation in any of the Jurisdictions.
5. The Fund currently distributes securities in the Jurisdictions under the Prospectus.
6. Pursuant to subsection 62(1) of the Act, the lapse date of the Prospectus is October 2, 2020 (the Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Fund would have to cease on the Lapse Date unless: (i) the Fund files a pro forma prospectus at least 30 days prior to the Lapse Date; (ii) the final prospectus is filed no later than 10 days after the Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days following the Lapse Date.
7. The Manager is proposing to create a new fund (the New Fund and together with the Fund, the Funds) and to file a combined preliminary and pro forma simplified prospectus and annual information form for the Funds that will be a pro forma filing for securities of the Fund and a preliminary filing for securities of the New Fund. The Manager considered issues associated with the structure of the New Fund and needed additional time to complete its internal review of these issues before filing the preliminary simplified prospectus and annual information form. The Manager filed a combined preliminary and pro forma simplified prospectus and annual information form for the Funds on September 14, 2020.
8. The Manager wishes to offer the Funds under one simplified prospectus in order to reduce renewal and related costs of the Funds. Offering the Funds under one simplified prospectus would facilitate the distribution of the securities of the Funds in the Jurisdictions under the same prospectus and enable the Manager to streamline disclosure across the Funds. As the Fund and the New Fund are both managed by the Manager, offering the Funds under the same prospectus will allow investors to compare their features more easily.
9. The Requested Relief will permit the renewal simplified prospectus of the Fund to include the New Fund.
10. There have been no material changes in the affairs of the Fund since the date of the Prospectus other than those for which amendments have been filed. Accordingly, the Prospectus, annual information form and current Fund Facts of the Fund represent current information regarding the Fund.
11. Given the disclosure obligations of the Filer and the Fund, should any material change in the business, operations or affairs of the Fund occur, the Prospectus, annual information form and current Fund Facts of the Fund will be amended as required under the Legislation.
12. New investors in the Fund will receive delivery of the most recently filed Fund Facts of the Fund. The current Prospectus will remain available to investors upon request.
13. The Requested Relief will not affect the accuracy of the information contained in the Prospectus, annual information form or Fund Facts of the Fund, and will therefore 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.