Headnote
NP 11-203 – Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted from self-dealing provisions in s. 118(2)(b) of the Act and s. 115(6) of the Reg. to permit certain funds to conduct inter-fund trades between mutual funds, pooled funds, closed-end funds and managed accounts - inter-fund trades will comply with conditions in s. 6.1(2) of National Instrument 81-107 - Independent Review Committee for Investment Funds (NI 81-107) including Independent Review Committee approval or client consent – trades involving exchange-traded securities are permitted to occur at “last sale price” as defined in the Universal Market Integrity Rules - relief also subject to pricing and transparency conditions.
Applicable Legislative Provisions
Securities Act (Ontario), sections 118(2)(b), 121(2)(a)(ii) and 147.
Ontario Regulation 1015 General Regulation, section 115(6).
National Instrument 81-107 – Independent Review Committee for Investment Funds, sections 6.1(2) and 6.1(4).
September 19, 2008
In the Matter of the Securities Legislation of Ontario
and
Alberta, Saskatchewan, Nova Scotia
and Newfoundland and Labrador
and
In the Matter of the Process for Exemptive Relief Application in Multiple Jurisdictions
and
In the Matter of Goodman & Company, Investment Counsel Ltd. (the Filer)
and the Existing Public Funds and Existing Pooled Funds, the Existing Managed Accounts, Future Public Funds, Future Pooled Funds and Future Managed Accounts, all as defined below.
Decision
Background
The securities regulatory authority or regulator in Ontario has received an application from the Filer for a decision under the securities legislation of the jurisdiction of the principal regulator (the Legislation) for an exemption from the prohibition in section 118(2)(b) of the Legislation (the Act) which prohibits a portfolio manager from knowingly causing an investment portfolio under its management to purchase or sell securities of an issuer from or to the account of a responsible person, any associate of a responsible person, or the portfolio manager in order to permit the portfolio manager of the Funds (as defined below) to cause the Funds to engage in trades (the Inter-Fund Trades) in securities of an issuer between any combination of any of the Public Funds, Pooled Funds and Managed Accounts (as defined below) (the Passport Exemption).
The securities regulatory authority or regulator in each of Ontario, Alberta, Saskatchewan, Nova Scotia and Newfoundland and Labrador) (the First Jurisdictions) (the First Coordinated Exemptive Relief Decision Makers) has received an application from the Filer for a decision under the securities legislation of the First Jurisdictions (the Legislation) for an exemption from the prohibition in section 115(6) of Ontario Regulation 1015 and the equivalent provisions in the securities legislation of First Jurisdictions which prohibit a purchase or sale of a security in which an investment counsel or any partner, officer or associate of an investment counsel has a direct or indirect beneficial interest from or to any portfolio managed or supervised by the investment counsel in order to permit Inter-Fund Trades (the First Coordinated Exemptive Relief).
The securities regulatory authority or regulator in each of Ontario and Newfoundland and Labrador (the Second Jurisdictions) (the Second Coordinated Exemptive Relief Decision Makers and together with the First Coordinated Exemptive Relief Decision Makers, the Coordinated Exemptive Relief Decision Makers)) has received an application for a decision under the securities legislation of the Second Jurisdictions (the Legislation) for an exemption from the prohibition in section 118(2)(b) of the Legislation and the equivalent provisions in the Second Jurisdictions which prohibit a portfolio manager from knowingly causing an investment portfolio under its management to purchase or sell securities of an issuer from or to the account of responsible person, any associate of a responsible person, or the portfolio manager in order to permit the Inter-Fund Trades (the Second Coordinated Exemptive Relief and together with the First Coordinated Exemptive Relief, the Coordinated Exemptive Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:
(a) the Ontario Securities Commission is the principal regulator for this application,
(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 British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, Northwest Territories, Yukon and Nunavut,
(c) the decision is the decision of the principal regulator, and
(d) the decision evidences the decision of each Coordinated Exemptive Relief Decision Maker.
Interpretation
Terms defined in MI 11-102, National Instrument 14-101 Definitions, NI 81-102 and NI 81-107 have the same meaning if used in this decision, unless otherwise defined.
Existing Funds means collectively, the Existing Managed Accounts, the Existing Public Funds and the Existing Pooled Funds;
Existing Managed Account means each existing managed account of the Filer;
Existing Pooled Fund means each Pooled Fund listed in Appendix A;
Existing Public Fund means each Public Fund listed in Appendix A;
Filer means the Manager
Funds means collectively, the Public Funds, the Pooled Funds and the Managed Accounts;
Future Funds means collectively, the Future Public Funds, the Future Pooled Funds and the Future Managed Accounts;
Future Managed Account means each future managed account that may be established by the Manager;
Future Poo