National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted under subsection 62(5) of the Securities Act to permit extension of fund's prospectus lapse date by 66 days to accommodate timing of a proposed fund merger -- no conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
October 20, 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 NEXT EDGE CAPITAL CORP. (the Filer) AND NEXT EDGE BIO-TECH PLUS FUND (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 dated October 25, 2020 (the Current Prospectus) be extended to the time limits that would apply if the lapse date of the Current Prospectus was December 31, 2020 (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 subsection 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Quebec and Prince Edward Island (together with Ontario, the Canadian 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 Filer is a corporation incorporated under the laws of Canada with a head office in Toronto.
2. The Filer is registered as: (i) an Investment Fund Manager in Ontario, Québec and Newfoundland and Labrador; (ii) a Portfolio Manager in Alberta and Ontario; and (iii) as an Exempt Market Dealer in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan.
3. The Filer is the investment fund manager of the Fund.
4. The Fund is an open-ended mutual fund trust established under the laws of each of the Canadian Jurisdictions. The Fund is a reporting issuer as defined in the securities legislation of each of the Canadian Jurisdictions.
5. Neither the Filer nor the Fund are in default of securities legislation in any of the Canadian Jurisdictions.
6. The Fund currently distributes securities in the Canadian Jurisdictions under the Current Prospectus.
7. Pursuant to subsection 62(1) of the Act, the lapse date of the Current Prospectus is October 25, 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 simplified prospectus at least 30 days prior to the Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days of the Lapse Date.
8. The pro forma prospectus of the Fund was required to have been filed by September 25, 2020 in order for securities of the Fund to continue to be distributed after the Lapse Date.
9. The Filer is considering merging the Fund into Next Edge Biotech and Life Sciences Opportunities Fund (the Continuing Fund), a related mutual fund (the Proposed Merger).
10. The Continuing Fund will be an open-ended mutual fund trust, established under the laws of Ontario by the Declaration of Trust and will be governed by the provisions of National Instrument 81-102 -- Investment Funds (NI 81-102). The Continuing Fund will also be an "alternative mutual fund" under NI 81-102
11. Securities of the Continuing Fund are expected to be qualified for sale in each of the provinces of Canada pursuant to a simplified prospectus, annual information form and related Fund Facts. To this end, a preliminary simplified prospectus, preliminary annual information form and preliminary Fund Facts each dated October 15, 2020 were filed on behalf of the Continuing Fund with the applicable securities regulatory authorities in each province of Canada. A final simplified prospectus, final annual information form and final Fund Facts for the Continuing Fund will be filed, and a final receipt will be issued in respect thereof, prior to the Effective Date (as defined below).
12. It is anticipated that the effective date of the Proposed Merger would be no later than December 31, 2020 so as to coincide with the Fund's year-end (the Effective Date).
13. A press release in respect of the Proposed Merger was disseminated on October 15, 2020, along with a related material change report.
14. In addition, if the Proposed Merger is implemented, the Fund will be wound up as soon as possible after the Effective Date.
15. If the Filer proceeds with the Proposed Merger, in the opinion of the Filer, it would be unduly costly to file pro forma renewal documents for the approximately two-month period prior to the Effective Date.
16. If the Exemption Sought is not granted by October 25, 2020, securities of the Fund will no longer be permitted to be distributed.
17. Given the disclosure obligations of the Fund, should a material change in the affairs of the Fund occur, the Current Prospectus and current fund fact documents of the Fund will be amended as required under applicable legislation. Consequently, as a result of the announcement of the Proposed Merger, the Filer will comply with all applicable securities law requirements, including, without limitation, filing appropriate amendments to the Current Prospectus (within the time frames required by applicable securities requirements) and seeking unitholder and regulatory approval where necessary.
18. New investors in the Fund will receive delivery of the most recently filed fund facts of the Fund. The Current Prospectus will still be available upon request.
19. The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectus or the respectively filed fund facts of the Fund, 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 Exemption Sought is granted.