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NATIONAL INSTRUMENT 81-101
MUTUAL FUND PROSPECTUS DISCLOSURE
FORM 81-101F2
CONTENTS OF FUND PROSPECTUS
TABLE OF CONTENTS

PART TITLE PAGE

Item 1: Front Page Disclosure 3
Item 2: Table of Contents and Headings 4
Item 3: Name, Formation and History of the Mutual Fund 5
Item 4: Investment Objectives and Strategies 6
Item 5: Suitability 7
Item 6: Risk Factors 7
Item 7: Past Performance 9
Item 8: Financial Highlights 9
Item 9: Description of Securities Offered by the Fund 9
Item 10: Description of Other Securities Offered 10
Item 11: Calculation of Net Asset Value 10
Item 12: Purchases and Transfers 11
Item 13: Redemption of Securities 12
Item 14: Optional Services Provided by the Mutual Fund Organization 12
Item 15: Valuation of Portfolio Securities 13
Item 16: Responsibility for Fund Operations 13
Item 17: Conflicts of Interest 17
Item 18: Fund Governance 20
Item 19: Fees and Expenses 21
Item 20: Dealer Compensation 22
Item 21: Distribution Policy 23
Item 22: Income Tax Considerations 23
Item 23: Remuneration of Directors, Officers and Trustees 23
Item 24: Material Contracts 24
Item 25: Legal and Administrative Proceedings 25
Item 26: Other Material Information 25
Item 27: Purchasers' Statutory Rights 26
Item 28: Certificate of the Mutual Fund 26
Item 29: Certificate of the Manager of the Mutual Fund 27
Item 30: Certificate of Each Promoter of the Mutual Fund 28
Item 31: Certificate of the Principal Distributor of the Mutual Fund 28
Item 32: Exemptions and Approvals 28
Item 33: Back Cover 29

 


NATIONAL INSTRUMENT 81-101
MUTUAL FUND PROSPECTUS DISCLOSURE
FORM 81-101F2
CONTENTS OF FUND PROSPECTUS(1)

GENERAL INSTRUCTIONS:

 

  • This Form describes the disclosure that is required in a fund prospectus of a mutual fund. Each Item of this Form outlines disclosurerequirements. Instructions to help you provide this disclosure are printed in italic type.
  • Terms defined in National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Mutual Funds or NationalInstrument 81-105 Mutual Fund Sales Practices and used in this Form have the meanings that they have in those national instruments.
  • The fund prospectus is intended to be a free-standing document that can be read without reference to the related fund summary. The fundprospectus does not include the financial statements of the mutual fund. The financial statements are required by National Instrument 81-101to be delivered to any person or company that requests them.
  • The fund prospectus shall include all of the information contained in the related fund summary. Disclosure of that information is expected tobe expanded in the fund prospectus either as a result of the requirements of this Form or because the mutual fund wants to provide fullerdescriptions of matters than can be accommodated in the fund summary in order to satisfy its obligation to provide purchasers of its securitieswith full, true and plain disclosure of all material facts relating to those securities. Where this Form requires a mutual fund to provide thedisclosure required by a specified Item of Form 81-101F1 (the "Fund Summary Form"), the mutual fund should consider whether theinformation needs to be expanded beyond what is contained in the related fund summary in order to satisfy its statutory obligations. A mutualfund may also include information, including educational material, in the fund prospectus not specifically contemplated by the Items in thisForm.
  • Unless otherwise required by this Form, the information contained in the related fund summary may be presented in a different format andstyle in the fund prospectus than in the fund summary. The fund prospectus is required by National Instrument 81-101 to be presented in aformat that assists in readability and comprehension. Whereas this Form does not mandate the use of a specific format to achieve this goal,mutual funds are encouraged to use, as appropriate, tables, captions, bullet points or other organizational techniques that assist in presentingthe disclosure clearly.
  • The fund prospectus may contain photographs and artwork only if they are relevant to the business of the mutual fund, mutual fund family ormembers of the organization of the mutual fund and are not misleading.
  • As with the fund summary, the fund prospectus is to be prepared using plain language. Reference should be made to Part 3 of CompanionPolicy 81-101CP for a discussion concerning plain language and presentation.
  • This Form generally sets out requirements for the fund prospectus of a "mutual fund". Even though this Form speaks of one mutual fund, afund prospectus may describe more than one mutual fund. One fund prospectus can be prepared for all mutual funds in a mutual fund family,even where the mutual fund family has chosen to prepare more than one fund summary for its mutual funds. A fund prospectus that describesmore than one mutual fund shall be organized as follows:
  • one part of the fund prospectus shall contain fund-specific information; in that part of the fund prospectus, information about eachmutual fund shall be provided on a fund by fund or "catalogue" basis, with the information for each mutual fund set out separately, andstarting on a separate page, in a manner similar to that required for a fund summary; and
  • the rest of the fund prospectus shall contain general information that is common to all, or substantially all, of the mutual funds towhich the fund prospectus pertains.
  • The back cover shall contain the information required by Item 33.
  • Except as required in paragraphs (8) and (9) of these Instructions, and despite requirements contained in the Fund Summary Form, it is notnecessary to disclose the Items required by this Form in a fund prospectus in any particular order or under any particular heading. This isunlike the rule for a fund summary, which provides that information contained in a fund summary must be in the order and under the headingsrequired by the Fund Summary Form.
  • At the option of the mutual fund, any footnotes provided for under any Item of this Form may be deleted if the substance of the footnotes isotherwise provided.

    Item

  • : Front Page Disclosure

     

  • Indicate on the front cover whether the document is a preliminary fund prospectus, a pro forma fund prospectus, a combined pro forma andpreliminary fund prospectus or a fund prospectus.
  • Indicate on the front cover the name of the mutual fund, mutual funds or the mutual fund family for which information is provided in thedocument.
  • Despite securities legislation, state on the front cover of a preliminary fund prospectus the following, with the bracketed information completed:

    "A copy of this Fund Prospectus has been filed with [the securities authority(ies) in each of/certain of the provinces/provinces and territories of Canada] buthas not yet become final for the purpose of a distribution. Information contained in this Fund Prospectus may not be complete and may have to be amended.The securities described in this Fund Prospectus may not be distributed to you until a receipt for the Fund Prospectus is obtained by the mutual fund from thesecurities regulatory [authority(ies)]."

  • If a commercial copy of the preliminary fund prospectus is prepared, print the legend referred to in subsection (3) in red ink.
  • For a preliminary fund prospectus, combined pro forma and preliminary fund prospectus or fund prospectus, indicate the date of the document,which shall be the date of the certificates for the document. This date shall be within three business days of the date it is filed with the securitiesregulatory authority. Write the date of the document in full, writing the name of the month in words. A pro forma fund prospectus need not bedated, but may reflect the anticipated date of the fund prospectus.
  • For a combined pro forma and preliminary fund prospectus, indicate the mutual fund or mutual funds for which the document is a pro formafund prospectus and the mutual fund or mutual funds for which the document is a preliminary fund prospectus.
  • State, in substantially the following words:

    "No securities regulatory authority has expressed an opinion about these [units/shares] and it is an offence to claim otherwise."

    Item

  • : Table of Contents and Headings

     

  • Despite securities legislation, include a table of contents that includes the name of each mutual fund covered by the fund prospectus, with thenumber of the page where information about that mutual fund can be found.
  • Distinguish by means of headings those parts of the fund prospectus that provide fund-specific information and those parts that provide generalinformation applicable to all of the mutual funds described in the fund prospectus.

    Item

  • : Name, Formation and History of the Mutual Fund

     

  • State the full name of the mutual fund and the address of its head or registered office.
  • State the laws under which the mutual fund was formed and the date and manner of its formation.
  • Identify the constating documents of the mutual fund and, if material, state whether the constating documents have been amended since theformation of the mutual fund and describe the amendments.
  • If the mutual fund's name has been changed since its formation, state the mutual fund's former name and the date on which it was changed.
  • Disclose, and provide details about, any major events affecting the mutual fund in the last 10 years, or for a mutual fund that has not been inexistence for 10 years, since its formation. Include information, if applicable, about
  • the mutual fund having participated in, or been formed from, an amalgamation or merger with one or more other mutual funds;
  • the mutual fund having participated in any reorganization or transfer of assets in which the securityholders of another issuer becamesecurityholders of the mutual fund;
  • any changes in investment objectives or material investment strategies;
  • any changes in the portfolio adviser or changes in, or of control of, the manager; and
  • the mutual fund, before it filed a prospectus as a mutual fund, having existed as a closed-end investment fund, non-public mutual fund orother entity.

    Item

  • : Investment Objectives and Strategies

     

  • Provide the disclosure of "Type of Fund" required to be included in the table required by Item 6 of the Fund Summary Form.
  • Provide the information required by Items 8 and 9 of the Fund Summary Form.
  • Include a statement to the effect that the mutual fund is subject to certain restrictions and practices contained in securities legislation, includingNational Instrument 81-102, which are designed in part to ensure that the investments of the mutual fund are diversified and relatively liquid andto ensure the proper administration of the mutual fund, and state that the mutual fund is managed in accordance with these restrictions andpractices.
  • If the mutual fund has adopted any additional restrictions on investments beyond what is required under securities legislation, briefly describethose additional restrictions in general terms.
  • If the mutual fund has received the approval of the securities regulatory authorities to vary any of the investment restrictions and practicescontained in securities legislation, including National Instrument 81-102, provide details of the permitted variations.
  • Describe the nature of any securityholder or other approval that may be required in order to change the investment objectives and any of thematerial investment strategies to be used to achieve the investment objectives.
  • State
  • whether the securities of the mutual fund are or will be a qualified investment within the meaning of the Income Tax Act (Canada) forretirement savings plans, deferred profit sharing plans or other savings plans registered under that Act;
  • whether the securities of the mutual fund are or will be recognized as a registered investment within the meaning of that Act;
  • whether the securities of the mutual fund will constitute foreign property within the meaning of that Act; and
  • the effect that the matters disclosed in paragraphs (a), (b) and (c) have on the investments to be made by the mutual fund.
  • State whether the mutual fund has deviated in the last year from the rules under the Income Tax Act(Canada) that apply to the status of itssecurities as
  • registered investments within the meaning of that Act for retirement savings plans, deferred profit sharing plans or other savings plansregistered under that Act;
  • registered investments within the meaning of that Act; or
  • non-foreign property under that Act.
  • State the consequences of any deviation described in response to subsection (8).

    Item

  • : Suitability

     

    Provide the information required by Item 7 of the Fund Summary Form.

    Item

  • : Risk Factors

     

  • Provide the information required by Items 4 and 10 of the Fund Summary Form.
  • If the mutual fund intends to use permitted derivatives, describe the risks associated with any use or intended use by the mutual fund ofpermitted derivatives and the policies and practices of the mutual fund to manage those risks.(2)
  • In the disclosure provided under subsection (2), include disclosure of
  • whether there are written policies and procedures in place that set out the objectives and goals for permitted derivatives trading and therisk management procedures applicable to permitted derivatives trading;
  • who is responsible for setting and reviewing the policies and procedures, how often are the policies and procedures reviewed, and theextent and nature of the involvement of the board of directors or trustee in the risk management process;
  • whether there are trading limits or other controls on permitted derivative trading in place and who is responsible for authorizing thetrading and placing limits or other controls on the trading;
  • whether there are individuals or groups that monitor the risks independent of those who trade; and
  • whether risk measurement procedures or simulations are used to test the portfolio under stress conditions.(3)
  • If the mutual fund offers more than one class or series of securities, disclose the risks that the investment performance, expenses or liabilities ofone class or series may affect the value of the securities of another class or series, if applicable.

    INSTRUCTIONS:

    (1) The disclosure provided under this Item should include all risk factors disclosed in the fund summary both in connection with general investment risksdisclosed under Item 4 of the Fund Summary Form and specific investment risks disclosed under Item 10 of the Fund Summary Form, but is expected to be inmore detail than in the fund summary.

    (2) For a fund prospectus pertaining to a number of mutual funds, there should be a section describing the general risk factors pertaining to mutual fundsgenerally. There should also be separate risk disclosure for each mutual fund to which the fund prospectus pertains, describing the particular risks that applyto that mutual fund.

    (3) The disclosure provided under this Item should include make appropriate distinctions between the risks associated with the intended use by the mutual fundof derivatives for hedging purposes as against the mutual fund's intended use of derivatives for non-hedging purposes.

    Item

  • : Past Performance

     

    Provide the information required by Item 11 of the Fund Summary Form.

    Item

  • : Financial Highlights

     

    Provide the information required by Item 13 of the Fund Summary Form.

    Item

  • : Description of Securities Offered by the Fund

     

  • State the description or the designation of securities, or the series or classes of securities, offered by the fund prospectus and describe thesecurities or all material attributes and characteristics, including
  • dividend or distribution rights;
  • voting rights;
  • liquidation or other rights upon the termination of the mutual fund;
  • conversion rights;
  • redemption rights; and
  • provisions as to amendment of any of these rights or provisions.
  • Describe the rights of securityholders to approve
  • the matters set out in section 5.1 of National Instrument 81-102;(4) and
  • any matters provided for in the constating documents of the mutual fund.

    Item

  • : Description of Other Securities Offered

     

    If the rights attaching to the securities being offered by the fund prospectus are materially limited or qualified by those attached to any other class or series ofsecurities or if another class or series of securities ranks ahead of or equally with the securities being offered, include information regarding those other securitiesthat will enable investors to understand the rights attaching to the securities being offered.

    Item

  • : Calculation of Net Asset Value

     

  • State that the issue and redemption price of securities of the mutual fund is based on the mutual fund's net asset value next determined after thereceipt of a purchase order and a redemption order. Describe the method followed or to be followed by the mutual fund in determining the netasset value.
  • State the frequency at which the net asset value is determined and the date and time of day at which it is determined.
  • If a money market mutual fund intends to maintain a constant net asset value per security, disclose this intention and disclose how the mutualfund intends to maintain this constant net asset value.

    Item

  • : Purchases and Transfers

     

  • Describe the procedure followed or to be followed by investors who desire to purchase or transfer securities of the mutual fund.
  • State that the issue price of securities is based on the net asset value of a security of that class, or series of a class, next determined after thereceipt by the mutual fund of the purchase order.
  • Describe how the securities of the mutual fund are distributed. If sales are effected through a principal distributor, give brief details of anyarrangements with the principal distributor.
  • Describe all available purchase options and state, if applicable, that the choice of different purchase options requires the investor to pay differentfees and expenses and, if applicable, that the choice of different purchase options affects the amount of compensation paid by a member of theorganization of the mutual fund to the dealer. Include cross-references to the disclosure provided under Items 19 and 20 of this Form.
  • Disclose that a dealer may make provision in arrangements that it has with an investor that will require the investor to compensate the dealer forany losses suffered by the dealer in connection with a failed settlement of a purchase of securities of the mutual fund caused by the investor.(5)
  • For a mutual fund that is being sold on a best efforts basis, state whether the issue price will be fixed during the initial distribution period, andstate when the mutual fund will begin issuing securities at the net asset value per security of the mutual fund.

    Item

  • : Redemption of Securities

     

  • Describe the procedures followed or to be followed by an investor who desires to redeem securities of the mutual fund, specifying theprocedures to be followed and documents to be delivered before a redemption order pertaining to securities of the mutual fund is accepted bythe mutual fund for processing and before payment of the proceeds of redemption is made by the mutual fund.
  • State that the redemption price of the securities is based on the net asset value of a security of that class, or series of a class, next determinedafter the receipt by the mutual fund of the redemption order.
  • Provide a cross reference to the section of the fund prospectus that discloses details concerning fees and charges that may be payable at the timeof the redemption.
  • Disclose that a dealer may make provision in arrangements that it has with an investor that will require the investor to compensate the dealer forany losses suffered by the dealer in connection with any failure of the investor to satisfy the requirements of the mutual fund or securitieslegislation for a redemption of securities of the mutual fund.(6)
  • Discuss the circumstances under which the mutual fund may suspend redemptions of the securities of the mutual fund.
  • For a mutual fund that is being sold on a best efforts basis, state when the mutual fund will begin redeeming securities at the net asset value persecurity of the mutual fund.

    Item

  • : Optional Services Provided by the Mutual Fund Organization

     

    Provide the disclosure required by Item 15 of the Fund Summary Form.

    Item

  • : Valuation of Portfolio Securities

     

  • Describe the methods used to value the various types or classes of portfolio assets of the mutual fund and its liabilities for the purpose ofcalculating net asset value.
  • If the manager has discretion to deviate from the mutual fund's valuation practices described in subsection (1), disclose when and to what extentthat discretion may be exercised and when, in the past three years, that discretion has been exercised.

    Item

  • : Responsibility for Fund Operations

     

  • General

    Describe how each of the following aspects of the operations of the mutual fund are administered and who administers those functions:

  • the management and administration of the mutual fund, including valuation services, fund accounting and unitholder records, other thanthe management of the portfolio assets;
  • the management of the portfolio assets, including the provision of investment analysis or investment recommendations and the making ofinvestment decisions;
  • the purchase and sale of portfolio assets by the mutual fund and the making of brokerage arrangements relating to the portfolio assets;
  • the distribution of the securities of the mutual fund;
  • if the mutual fund is a trust, the trusteeship of the mutual fund;
  • if the mutual fund is a corporation, the oversight of the affairs of the mutual fund by the directors of the mutual fund; and
  • the custodianship of the assets of the mutual fund.

    INSTRUCTION:

    The disclosure required under Item 16.1 may, at the option of the mutual fund, be provided separately from, or combined with, the detailed disclosureconcerning the persons or companies that provide services to the mutual fund required by Items 16.2 through 16.10.

  • Manager
  • State the name, address and telephone number of the manager of the mutual fund.
  • List the names and home addresses in full or, alternatively, solely the municipality of residence or postal address, and the principal occupationsat, and within the five years preceding, the date of the fund prospectus, of all directors and officers of the manager of the mutual fund.
  • If a director or officer of the manager of the mutual fund has held more than one position with the manager of the mutual fund, state only thefirst and last position held.
  • If the principal occupation of a director or officer of the manager of the mutual fund is with an organization other than the manager of themutual fund, state the business in which the organization is engaged.
  • Describe the circumstances under which any agreement with the manager of the mutual fund may be terminated, and include a brief descriptionof the essential terms of this agreement.
  • Portfolio Adviser
  • If the manager of the mutual fund provides the portfolio management services in connection with the mutual fund, so state.
  • If the manager does not provide portfolio management services, state the names and municipality of residence for each portfolio adviser of themutual fund.
  • State
  • the extent to which investment decisions are made by certain individuals employed by the manager or a portfolio adviser and whetherthose decisions are subject to the oversight, approval or ratification of a committee; and
  • the name, title, and length of time of service of the person or persons employed by or associated with either the manager or a portfolioadviser of the mutual fund who is or are principally responsible for the day-to-day management of a material portion of the portfolio ofthe mutual fund, implementing a particular material strategy or managing a particular segment of the portfolio of the mutual fund, andeach person's business experience in the last five years.
  • Describe the circumstances under which any agreement with a portfolio adviser of the mutual fund may be terminated, and include a briefdescription of the essential terms of this agreement.(7)
  • Brokerage Arrangements

    State

  • the formula, method or criteria, if any, used in allocating brokerage business to persons or companies engaged in the distribution of thesecurities of the mutual fund;
  • the formula, method or criteria, if any, used in allocating brokerage business to persons or companies furnishing statistical, research orother services to the mutual fund or the manager of the mutual fund; and
  • the formula, method or criteria, if any, used in allocating brokerage business to an "affiliated entity", within the meaning of that termcontained in the Instructions in Item 17, and any variation from any formula, method or criteria applied in allocating brokerage businessto a non-affiliated entity.
  • Principal Distributor
  • If applicable, state the name and address of the principal distributor of the mutual fund.
  • Describe the circumstances under which any agreement with the principal distributor of the mutual fund may be terminated, and include a briefdescription of the essential terms of this agreement.
  • Directors, Officers and Trustees
  • List the names and home addresses in full or, alternatively, solely the municipality of residence or postal address, and the principal occupationsat, or within the five years preceding, the date of the fund prospectus, of all directors or officers of an incorporated mutual fund or of theindividual trustee or trustees, if any, of a mutual fund that is a trust.
  • State the names and municipality of residence for each person or company that is responsible for performing the trusteeship function of themutual fund.
  • Indicate, for an incorporated mutual fund, all positions and offices with the mutual fund then held by each person named in response tosubsection (1).
  • If the principal occupation of a director, officer or trustee is that of an officer of a company other than the mutual fund, state the business inwhich the company is engaged.
  • If a director or officer has held more than one position in the mutual fund, state only the first and last position held.
  • Custodian
  • State the name and municipality and nature of business of the custodian and any principal sub-custodian of the mutual fund.
  • Describe generally the sub-custodian arrangements of the mutual fund.

    INSTRUCTION:

    A "principal sub-custodian" is a sub-custodian to whom custodial authority has been delegated in respect of a material portion or segment of the portfolioassets of the mutual fund.

  • Auditor

    State the name and municipality of the auditor of the mutual fund.

  • Registrar

    If applicable, state the name of the registrar of securities of the mutual fund and the cities in which the register of securities of the mutual fund are kept.

  • Other Service Providers

    State the name and municipality and the nature of business of each other person or company that provides services relating to portfolio valuation, unitholderrecords, fund accounting, or other material services, in respect of the mutual fund, and describe the contractual arrangements between the mutual fund and theperson or company.

    Item

  • : Conflicts of Interest

     

  • Principal Holders of Securities
  • The information required in response to this Item shall be given as of a specified date within 30 days before the date of the fund prospectus.
  • Disclose the number and percentage of securities of each class or series of voting securities of the mutual fund and of the manager of the mutualfund owned of record or beneficially, directly or indirectly, by each person or company that owns of record, or is known by the mutual fund orthe manager to own beneficially, directly or indirectly, more than 10 percent of any class or series of voting securities, and disclose whether thesecurities are owned both of record and beneficially, of record only, or beneficially only.
  • For any entity that is named in response to subsection (2), disclose the name of any person or company of which that entity is a "controlledentity".
  • If any person or company named in respect of subsection (2) owns of record or beneficially, directly or indirectly, more than 10 percent of anyclass of voting securities of the principal distributor of the mutual fund, disclose the number and percentage of securities of the class so owned.
  • Disclose the percentage of securities of each class or series of voting or equity securities beneficially owned, directly or indirectly, in aggregate,by all the directors, trustees and senior officers
  • of the mutual fund
  • in the mutual fund if the aggregate level of ownership exceeds 10 percent,
  • in the manager, or
  • in any person or company that provides services to the mutual fund or the manager; and
  • of the manager
  • in the mutual fund if the aggregate level of ownership exceeds 10 percent,
  • in the manager, or
  • in any person or company that provides services to the mutual fund or the manager.
  • Affiliated EntitieS
  • State whether any person or company that provides services to the mutual fund or the manager in relation to the mutual fund is an affiliatedentity of the manager, and show the relationships of those affiliated entities in the form of an appropriately labelled diagram.
  • State that disclosure of the amount of fees received from the mutual fund by each person or company described in subsection (1) is contained inthe audited financial statements of the mutual fund.
  • Identify any individual who is a director or senior officer of the mutual fund or the manager and also of any affiliated entity of the managerdescribed in response to subsection (1), and give particulars of the relationship.

    INSTRUCTIONS:

    (1) A person or company is an "affiliated entity" of another person or company if one is a subsidiary entity of the other or if both are subsidiary entities of thesame person or company or if each of them is a controlled entity of the same person or company.

    (2) A person or company is a "controlled entity" of a person or company if

    (a) in the case of a person or company

    (i) voting securities of the first-mentioned person or company carrying more than 50 percent of the votes for the election of directors are held, otherwise thanby way of security only, by or for the benefit of the other person or company, and

    (ii) the votes carried by the securities are entitled, if exercised, to elect a majority of the directors of the first-mentioned person or company;

    (b) in the case of a partnership that does not have directors, other than a limited partnership, the second-mentioned person or company holds more than 50percent of the interests in the partnership; or

    (c) in the case of a limited partnership, the general partner is the second-mentioned person or company.

    (3) A person or company is a subsidiary entity of another person or company if

    (a) it is a controlled entity of

    (i) that other,

    (ii) that other and one or more persons or companies, each of which is a controlled entity of that other, or

    (iii) two or more persons or companies, each of which is a controlled entity of that other; or

    (b) it is a subsidiary entity of a person or company that is that other's subsidiary entity.

    (4) For the purposes of subsection (1), the provision of services includes the execution of portfolio transactions, as a broker, for the mutual fund.

  • Dealer Manager Disclosure

    If the mutual fund is dealer managed, disclose this fact and that the mutual fund is subject to the restrictions set out in section 4.1 of National Instrument 81-102,and summarize section 4.1 of National Instrument 81-102.

    Item

  • : Fund Governance

     

    Provide detailed information concerning the governance of the mutual fund, including information concerning

  • the policies of the manager concerning conflicts of interest and business practices;
  • whether the mutual fund has independent directors and trustees, an audit committee or an independent business conduct reviewcommittee, and if so, the names and municipalities of each member of that committee; and
  • whether the mutual fund or the manager have policies, practices or guidelines relating to business practices, sales practices, riskmanagement controls and internal conflicts of interest, and if so, descriptions of all of them.

    Item

  • : Fees and Expenses

     

  • General

    Provide the information required by Item 16 of the Fund Summary Form.

  • Management Fees Payable Directly by Securityholders

    If the management fees of a mutual fund are payable directly by a securityholder and vary so that specific disclosure of the amount of the management feescannot be disclosed in the fund summary or fund prospectus of the mutual fund, or cannot be derived from disclosure in the fund summary or fund prospectus,provide as much disclosure as is possible about the management fees to be paid by securityholders, including the highest possible rate or range of thosemanagement fees.

  • Management Fee Rebate or Distribution Programs
  • Disclose details of all arrangements that are in effect or will be in effect during the currency of the fund prospectus that will result, directly orindirectly, in one securityholder in the mutual fund paying as a percentage of the securityholder's investment in the mutual fund a managementfee that differs from that payable by another securityholder.(8)
  • In the disclosure required by subsection (1), describe
  • who pays the management fee;
  • whether a reduced fee is paid at the relevant time or whether the full fee is paid at that time with a repayment of a portion of themanagement fee to follow at a later date;
  • who funds the reduction or repayment of management fees, when the reduction or repayment is made and whether it is made in cash orin securities of the mutual fund;
  • whether the differing management fees are negotiable or calculated in accordance with a fixed schedule;
  • if the management fees are negotiable, the factors or criteria relevant to the negotiations and state who negotiates the fees with theinvestor;
  • whether the differing management fees payable are based on the number or value of the securities of the mutual fund purchased during aspecified period or the number or value of the securities of the mutual fund held at a particular time; and
  • any other factors that could affect the quantum of the management fees payable.(9)
  • Disclose the income tax consequences to the mutual fund and its securityholders of a management fee structure that results in onesecurityholder paying a management fee that differs from another.

    Item

  • : Dealer Compensation

     

    Provide the information required by Item 17 of the Fund Summary Form.

    Item

  • : Distribution Policy

     

    Provide the disclosure required by Item 12 of the Fund Summary Form.

    Item

  • : Income Tax Considerations

     

  • State in general terms the bases upon which the income and capital receipts of the mutual fund are taxed.
  • State in general terms the income tax consequences to the holders of the securities offered of
  • any distribution to the holders in the form of dividends or otherwise, including amounts reinvested in securities of the mutual fund;
  • the redemption of securities;
  • the issue of securities; and
  • any transfers between mutual funds.
  • Provide the disclosure required by subsections (3) and (4) of Item 18 of the Fund Summary Form.

    Item

  • : Remuneration of Directors, Officers and Trustees

     

  • If the management functions of the mutual fund are carried out by employees of the mutual fund, include the disclosure concerningcompensation paid to executive officers of the mutual fund required by securities legislation.
  • Describe any arrangements, including the amounts paid, the name of the individual and any expenses reimbursed by the mutual fund to theindividual, under which compensation was paid or payable by the mutual fund during the most recently completed financial year of the mutualfund, for the services of directors of the mutual fund and members of an independent board of governors or advisory board of the mutual fund
  • in that capacity, including any additional amounts payable for committee participation or special assignments; and
  • as consultants or experts.

    Item

  • : Material Contracts

     

  • List and provide particulars, including particulars of any material amendments, of
  • the declaration of trust or trust agreement of the mutual fund, if any;
  • any agreement with the manager of the mutual fund;
  • any agreement with the portfolio adviser or portfolio advisers of the mutual fund;
  • any agreement with the custodian of the mutual fund;
  • any agreement with the principal distributor of the mutual fund; and
  • any other contract or agreement that can reasonably be regarded as material to an investor in the securities of the mutual fund.
  • State a reasonable time at which and place where the contracts or agreements listed in response to subsection (1) may be inspected byprospective or existing securityholders.
  • Include, in describing particulars of contracts, the date of, parties to, consideration and general nature of the contracts.

    INSTRUCTION:

    This Item does not require disclosure of contracts entered into in the ordinary course of business of the mutual fund.

    Item

  • : Legal and Administrative Proceedings

     

  • Describe briefly any ongoing legal and administrative proceedings material to the mutual fund, to which the mutual fund, its manager orprincipal distributor is a party.
  • For all matters disclosed under subsection (1), disclose
  • the name of the court or agency having jurisdiction;
  • the date on which the proceeding was instituted;
  • the principal parties to the proceeding;
  • the nature of the proceeding and, if applicable, the amount claimed; and
  • whether the proceedings are being contested and the present status of the proceedings.
  • Provide similar disclosure about any proceedings known to be contemplated.
  • If the manager of the mutual fund, or a director or officer of the mutual fund or of the manager of the mutual fund has, within the 10 yearsbefore the date of the fund summary, been subject to any penalties or sanctions imposed by a court or securities regulator relating to trading insecurities, promotion or management of a publicly traded mutual fund, or theft or fraud, describe the penalties or sanctions imposed and thegrounds on which they were imposed.

    Item

  • : Other Material Information

     

  • Give particulars of any other material facts relating to the securities proposed to be offered that are not otherwise required to be disclosed bythis Form.
  • State any disclosure required or specifically permitted to be disclosed in a prospectus under securities legislation that is not otherwise requiredto be disclosed by this Form.

    Item

  • : Purchasers' Statutory Rights

     

    Provide a brief explanation of an investor's statutory rights of rescission and damages, including the right of action for misrepresentations contained in the fundsummary and in any documents incorporated by reference into the fund summary, in substantially the following words:

    "Securities legislation in some provinces gives you the right to withdraw from an agreement to buy mutual funds within two business days of receiving the FundSummary or Fund Prospectus, or to cancel your purchase within 48 hours of receiving confirmation of your order.

    Securities legislation in some provinces and territories also have laws that allow you to cancel an agreement to buy find [units/shares] and get your moneyback, or to make a claim for damages, if the Fund Summary, Fund Prospectus or financial statements misrepresent any facts about the Fund. These rightsmust usually be exercised within certain time limits.

    For more information, refer to the securities law of your province or territory or consult your lawyer."

    Item

  • : Certificate of the Mutual Fund

     

  • Include a certificate of the mutual fund that states:

    "This fund prospectus, the financial statements of the fund [specify] for the financial period ended [specify] and the auditors' report on those financialstatements, together with the fund summary required to be sent or delivered to a purchaser during the currency of this fund prospectus, constitute full, true andplain disclosure of all material facts relating to the securities offered by the fund summary and do not contain any misrepresentation."

  • The certificate required to be signed by the mutual fund shall, if the mutual fund is established as a trust, be signed
  • if any trustee of the mutual fund is an individual, by each individual who is a trustee or by a duly authorized attorney of the individual; or
  • if any trustee of the mutual fund is a body corporate, by the duly authorized signing officer or officers of the body corporate.
  • Despite subsection (2), if the declaration of trust or trust agreement establishing the mutual fund delegates the authority to do so, the certificateform required to be signed by the trustee or trustees of the mutual fund may be signed by the person to whom the authority is delegated.
  • Despite subsections (1) and (2), if the trustee of the mutual fund is also its manager, the certificate shall indicate that it is being signed by theperson or company both in its capacity of trustee and in its capacity as manager of the mutual fund and shall be signed in the manner prescribedby Item 29.(10)

    Item

  • : Certificate of the Manager of the Mutual Fund

     

  • Include a certificate of the manager of the mutual fund in the same form as the certificate signed by the mutual fund.
  • The certificate shall, if the manager is a company, be signed by the chief executive officer and the chief financial officer of the manager, and onbehalf of the board of directors of the manager by any two directors of the manager other than the chief executive officer or chief financialofficer, duly authorized to sign.
  • Despite subsection (2), if the manager has only three directors, the certificate required by subsection (1) shall be signed by all of the directors ofthe manager.(11)

    Item

  • : Certificate of Each Promoter of the Mutual Fund

     

  • Include a certificate of each promoter of the mutual fund in the same form as the certificate signed by the mutual fund.
  • The certificate to be signed by the promoter shall be signed by any officer or director of the promoter duly authorized to sign.

    Item

  • : Certificate of the Principal Distributor of the Mutual Fund

     

  • Include a certificate of the principal distributor of the mutual fund that states:

    "To the best of our knowledge, information and belief, this fund prospectus, the financial statements of the fund [specify] for the financial period ended[specify] and the auditors' report on those financial statements, together with the fund summary required to be sent or delivered to a purchaser during thecurrency of this fund prospectus, constitute full, true and plain disclosure of all material facts relating to the securities offered by the fund summary and do notcontain any misrepresentation."

  • The certificate to be signed by the principal distributor shall be signed by any officer or director of the principal distributor duly authorized tosign.

    Item

  • : Exemptions and Approvals

     

  • Describe all exemptions from, or approvals under, this Instrument, National Instrument 81-102, National Instrument 81-105 or National PolicyStatement No. 39, obtained by the mutual fund or the manager that continue to be relied upon by the mutual fund or the manager.(12)
  • Include the disclosure required by subsection (1) in the section of the fund prospectus that describes the matter to which the exemption pertains.

    (3) Include disclosure about material breaches of securities legislation by the mutual fund or the manager in the last completed financial year of the mutual fund.

    Item

  • : Back Cover

     

  • State on the back cover the name of the mutual fund or funds included in the fund prospectus or the mutual fund family, as well as the name,address and telephone number of the manager of the mutual fund or funds.
  • State, in substantially the following words:

    " Additional information about the Fund[s] is available in the Fund['s/s'] financial statements.

    You can get a copy of the Fund['s/s'] financial statements, including a statement of portfolio transactions, at no cost by calling [toll-free/collect] [insert toll-free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your financial adviser or bye-mail at [insert e-mail address].

    The financial statements and other information about the Fund[s], such as information circulars and material contracts, are also available on the [insertname of mutual fund manager] Internet site at [insert fund's Internet site] or on the Internet site of SEDAR (the System for Electronic Document Analysis andRetrieval) at http://www.sedar.com."

    Footnotes

    1. A number of the disclosure obligations contained in this Form were published for comment as part of proposed National Instrument 81-102 Mutual Funds ("NI81-102"). Thoseprovisions will be deleted from NI81-102 before that proposed Instrument is finalized and moved to this Form so that all disclosure provisions concerning conventional mutual funds can bein one instrument.

    2. From section 16.1(c) of NI81-102.

    3. From section 11.1 of proposed Companion Policy 81-102CP ("Policy 81-102CP").

    4. From section 16.3 of NI81-102.

    5. This provision is related to the provisions concerning failed purchases of securities of a mutual fund contained in subsections 9.4(4), (5) and (6) of NI81-102. Those provisions providethat a mutual fund shall reverse failed purchases, and requires dealers involved with the failed purchase to compensate the mutual fund for losses incurred by it as a result of the failure tosettle. NI81-102 does not provide for the ability of those dealers to seek compensation from their clients. Section 9.3 of Policy 81-102CP states that dealers may wish to provide for a rightof recovery against their clients in such circumstances. This disclosure is intended to alert investors of the possibility of those arrangements.

    6. This provision corresponds to Item 12(5), and pertains to the possibility that dealers may make arrangements with clients for compensation in the case of failed redemptions in the samemanner as Item 12(5) relates to failed purchases. This provision relates to section 10.5 of NI81-102 and section 9.3 of Policy 81-102CP.

    7. The Canadian Securities Administrators (the "CSA") are considering what, if any, disclosure a mutual fund should make if an individual employed by the manager or a portfolio adviserstops providing portfolio management services in respect of the mutual fund. The issue is most acute in cases in which the mutual fund has promoted that individual's expertise orreputation in its advertising. The CSA will consider this issue in their review of NI81-102 and the obligation contained in that proposed Instrument for mutual funds to disclose "significantchanges".

    8. From section 17.2 of NI81-102.

    9. From section 11.2 of Policy 81-102CP.

    10. Subsections (2), (3) and (4) are from section 16.4 of NI81-102.

    11. From section 16.5 of NI81-102.

    12. From section 16.8 of NI81-102.