Headnote National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to mutual funds for extension of lapse date of prospectus for 77 days – Lapse date extended to permit updating of the disclosure across the fund family to reflect the purchase and amalgamation of another fund family – Extension of lapse date will not affect the currency or accuracy of the information contained in the prospectus – Securities Act (Ontario).
Applicable Legislative Provisions Securities Act, R.S.O. 1990, c. S.5, as amended, s.62(5).
April 26, 2011
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
CASTLEROCK INVESTMENTS INC.
(the Manager)
AND
IN THE MATTER OF
CI INVESTMENTS INC.
(the CI Manager)
AND
IN THE MATTER OF
THE FUNDS LISTED IN SCHEDULE A
(the Funds, and together with the Manager and the CI Manager, the Filers)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption that the time limits pertaining to filing the renewal prospectuses of the Filers be extended as if the lapse date of the simplified prospectuses and annual information forms dated May 14, 2010, July 14, 2010 and July 23, 2010, respectively, of the Funds, as amended from time to time, (collectively, the Prospectus) is July 30, 2011 (the Requested Relief).
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 Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in all of the provinces and territories of Canada (other than the Jurisdiction).
Interpretation
Defined terms contained in National Instrument 14-101 Definitions and MI 11-102 have the same meaning in this decision unless they are defined in this decision.
Representations
This decision is based on the following facts represented by the Filer:
Each Fund is a reporting issuer (or the equivalent) as defined in the Legislation of each of the Jurisdictions and is not in default of securities legislation in any jurisdiction.
Each Fund currently distributes its securities in all the Jurisdictions pursuant to the Prospectus.
The earliest lapse date of the Prospectus under the Legislation is May 14, 2011.
The Manager is a corporation controlled by CI Investments Inc. (the CI Manager). The Manager is not in default of securities legislation in any jurisdiction.
The CI Manager manages, in aggregate, over 170 mutual funds (the Affiliated Funds). The CI Manager is not in default of securities legislation in any jurisdiction.
The Affiliated Funds currently distribute their securities to the public under three simplified prospectuses and annual information forms (collectively, the CI Prospectuses), each of which have July 14, 2011, July 23, 2011 and July 30, 2011 as their earliest lapse dates, respectively, under the Legislation.
There was a change of control of the Manager on December 15, 2010, when the CI Manager purchased all of the outstanding shares of Hartford Investments Canada Corp. (now Castlerock Investments Inc.).
There is a special unitholder meeting for the Castlerock Funds (listed in Schedule A) scheduled for April 28, 2011 pursuant to a management information circular dated March 22, 2011. At the meeting the unitholders will vote on a proposed amalgamation of the Manager and CI Manager. The target date for the amalgamation is June 30, 2011. Depending on the outcome of the meeting, significant changes may need to be made to the prospectus between the pro forma and final filings.
It is the intention of the Manager to adopt operational and administrative features for the Castlerock Funds which are consistent with the Affiliated Funds in order that investors in the Castlerock Funds and the Affiliated Funds can more easily compare the features of these mutual funds. However, these changes are extensive and require changes to the back office facilities, information disseminated to financial advisors and prospectus disclosure of the Castlerock Funds. The Manager currently anticipates that it will require until mid-July 2011 to implement some of these changes.
As well, it is possible that the CI Manager will make minor changes to various features of the Affiliated Funds as part of the process of renewing the CI Prospectuses. The Manager would like the flexibility to file the renewal prospectus of the Castlerock Funds on the same timeline as the renewal prospectuses for the Affiliated Funds in order to ensure that the operational and administrative features of the Castlerock Funds can be made consistent with those of the Affiliated Funds.
If the Requested Relief is not granted, the Castlerock Funds will be required to renew the prospectus in May, 2011 and then subsequently amend and restate the prospectus and annual information form in July, 2011 so that it reflects the changes made to the Castlerock Funds in order for them to be consistent with the operational and administrative features of the Affiliated Funds and also so that it reflects the proposed amalgamation of the Manager and CI Manager targeted for June 30, 2011. The two filings in such close proximity will result in unnecessary costs to the Funds and their investors.
Taking these timelines into account, the Filer submits that a July 30, 2011 lapse date extension is required to meet all security law requirements.
There have been no material changes in the affairs of any Fund since the filing of the Prospectus, other than those for which amendments have been filed. Accordingly, the Prospectus represents current information regarding each Fund.
The Requested Relief will not affect the accuracy of the information in the Prospectus and therefore will not be prejudicial to the public interest.
Decision
The principal regulator is satisfied that the test contained in the Legislation that provides the principal regulator with the jurisdiction to make the decision has been met.
The decision of the principal regulator under the Legislation is that the Requested Relief is granted.
“Darren McKall”
Darren McKall
Manager, Investment Funds
ONTARIO SECURITIES COMMISSION
SCHEDULE A
LIST OF FUNDS
CASTLEROCK FUNDS
CASTLEROCK GROWTH PORTFOLIO
CASTLEROCK BALANCED GROWTH PORTFOLIO
CASTLEROCK BALANCED PORTFOLIO
CASTLEROCK CONSERVATIVE PORTFOLIO
CASTLEROCK CAPITAL APPRECIATION FUND
CASTLEROCK GLOBAL LEADERS FUND
CASTLEROCK INTERNATIONAL EQUITY FUND
CASTLEROCK U.S. DIVIDEND GROWTH FUND
CASTLEROCK CANADIAN DIVIDEND FUND
CASTLEROCK CANADIAN DIVIDEND GROWTH FUND
CASTLEROCK CANADIAN STOCK FUND
CASTLEROCK CANADIAN VALUE FUND
CASTLEROCK CANADIAN BALANCED FUND
CASTLEROCK GLOBAL BALANCED FUND
CASTLEROCK CANADIAN BOND FUND
CASTLEROCK GLOBAL HIGH INCOME FUND
CASTLEROCK CANADIAN MONEY MARKET FUND
CI FUNDS
CI ALPINE GROWTH EQUITY FUND
CI AMERICAN EQUITY FUND
CI AMERICAN EQUITY CORPORATE CLASS
CI AMERICAN MANAGERSCORPORATE CLASS
CI AMERICAN SMALL COMPANIES FUND
CI AMERICAN SMALL COMPANIES CORPORATE CLASS
CI AMERICAN VALUE FUND
CI AMERICAN VALUE CORPORATE CLASS
CI CANADIAN INVESTMENT FUND
CI CANADIAN INVESTMENT CORPORATE CLASS
CI CANADIAN SMALL/MID CAP FUND
CI EMERGING MARKETS FUND
CI EMERGING MARKETS CORPORATE CLASS
CI EUROPEAN FUND
CI EUROPEAN CORPORATE CLASS
CI GLOBAL FUND
CI GLOBAL CORPORATE CLASS
CI GLOBAL HEALTH SCIENCES CORPORATE CLASS
CI GLOBAL MANAGERS CORPORATE CLASS
CI GLOBAL SMALL COMPANIES FUND
CI GLOBAL SMALL COMPANIES CORPORATE CLASS
CI GLOBAL SCIENCE & TECHNOLOGY CORPORATE CLASS
CI GLOBAL VALUE FUND
CI GLOBAL VALUE CORPORATE CLASS
CI INTERNATIONAL FUND
CI INTERNATIONAL CORPORATE CLASS
CI INTERNATIONAL VALUE FUND
CI INTERNATIONAL VALUE CORPORATE CLASS
CI JAPANESE CORPORATE CLASS
CI PACIFIC FUND
CI PACIFIC CORPORATE CLASS
CI VALUE TRUST CORPORATE CLASS
CI INTERNATIONAL BALANCED FUND
CI INTERNATIONAL BALANCED CORPORATE CLASS
CI MONEY MARKET FUND
CI US MONEY MARKET FUND
CI SHORT-TERM CORPORATE CLASS
CI SHORT-TERM US$ CORPORATE CLASS
CI GLOBAL BOND FUND
CI GLOBAL BOND CORPORATE CLASS
CI CAN-AM SMALL CAP CORPORATE CLASS
CI GLOBAL HIGH DIVIDEND ADVANTAGE FUND
CI GLOBAL HIGH DIVIDEND ADVANTAGE CORPORATE CLASS
CI SHORT-TERM ADVANTAGE CORPORATE CLASS
CI INCOME ADVANTAGE FUND (FORMERLY SELECT INCOME ADVANTAGE MANAGED FUND)
HARBOUR FUNDS
HARBOUR FUND
HARBOUR CORPORATE CLASS
HARBOUR FOREIGN EQUITY CORPORATE CLASS
HARBOUR FOREIGN GROWTH & INCOME CORPORATE CLASS
HARBOUR GROWTH & INCOME FUND
HARBOUR GROWTH & INCOME CORPORATE CLASS
SIGNATURE FUNDS
SIGNATURE CANADIAN RESOURCE FUND
SIGNATURE CANADIAN RESOURCE CORPORATE CLASS
SIGNATURE SELECT CANADIAN FUND
SIGNATURE SELECT CANADIAN CORPORATE CLASS
SIGNATURE CANADIAN BALANCED FUND
SIGNATURE DIVIDEND FUND
SIGNATURE DIVIDEND CORPORATE CLASS
SIGNATURE HIGH INCOME FUND
SIGNATURE HIGH INCOME CORPORATE CLASS
SIGNATURE CORPORATE BOND FUND
SIGNATURE CORPORATE BOND CORPORATE CLASS
SIGNATURE INCOME & GROWTH FUND
SIGNATURE INCOME & GROWTH CORPORATE CLASS
SIGNATURE GLOBAL INCOME & GROWTH FUND
SIGNATURE GLOBAL INCOME & GROWTH CORPORATE CLASS
SIGNATURE GLOBAL ENERGY CORPORATE CLASS
SIGNATURE CANADIAN BOND FUND
SIGNATURE CANADIAN BOND CORPORATE CLASS
SIGNATURE SHORT-TERM BOND FUND
SIGNATURE MORTGAGE FUND
SIGNATURE DIVERSIFIED YIELD FUND
SIGNATURE DIVERSIFIED YIELD CORPORATE CLASS
SIGNATURE SELECT GLOBAL FUND
SIGNATURE SELECT GLOBAL CORPORATE CLASS
SIGNATURE GOLD CORPORATE CLASS
PORTFOLIO SERIES
PORTFOLIO SERIES CONSERVATIVE BALANCED FUND
PORTFOLIO SERIES BALANCED GROWTH FUND
PORTFOLIO SERIES GROWTH FUND
PORTFOLIO SERIES MAXIMUM GROWTH FUND
PORTFOLIO SERIES INCOME FUND
PORTFOLIO SERIES CONSERVATIVE FUND
PORTFOLIO SERIES BALANCED FUND
SYNERGY FUNDS
SYNERGY CANADIAN CORPORATE CLASS
SYNERGY GLOBAL CORPORATE CLASS
SYNERGY AMERICAN FUND
SYNERGY AMERICAN CORPORATE CLASS
SYNERGY TACTICAL ASSET ALLOCATION FUND
PORTFOLIO SELECT SERIES
SELECT CANADIAN EQUITY MANAGED CORPORATE CLASS
SELECT U.S. EQUITY MANAGED CORPORATE CLASS
SELECT INTERNATIONAL EQUITY MANAGED CORPORATE CLASS
SELECT INCOME ADVANTAGE MANAGED CORPORATE CLASS
SELECT 80I20E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 70I30E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 60I40E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 50I50E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 40I60E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 30I70E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 20I80E MANAGED PORTFOLIO CORPORATE CLASS
SELECT 100E MANAGED PORTFOLIO CORPORATE CLASS
SELECT STAGING FUND
CAMBRIDGE FUNDS
CAMBRIDGE CANADIAN EQUITY CORPORATE CLASS
CAMBRIDGE GLOBAL EQUITY CORPORATE CLASS
CAMBRIDGE CANADIAN ASSET ALLOCATION CORPORATE CLASS
LAKEVIEW FUNDS
LAKEVIEW DISCIPLINED LEADERSHIP CANADIAN EQUITY FUND
LAKEVIEW DISCIPLINED LEADERSHIP U.S. EQUITY FUND
LAKEVIEW DISCIPLINED LEADERSHIP HIGH INCOME FUND