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 20 days – 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).
September 14 , 2012
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
FRONTENAC MORTGAGE INVESTMENT CORPORATION
(the “Filer”)
DECISION
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (“Legislation”) that the time limits pertaining to filing the renewal prospectus of the Filer be extended as if the lapse date of the prospectus of the Filer dated August 25, 2011 (the “Current Prospectus”) was September 14, 2012 (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 Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 – Passport System is intended to be relied upon in each of British Columbia, Alberta, Saskatchewan and Manitoba (together with Ontario, the “Jurisdictions”).
Interpretation
Terms defined in National Instrument 14-101 – Definitions have the same meaning if used in this decision, unless otherwise defined in this decision.
Representations
The decision is based on the following facts as represented by the Filer:
Pursuant to the Legislation, the lapse date of the Current Prospectus was August 25, 2012 (the “Lapse Date”). Accordingly, under the Legislation, in order to continue distributions of securities of the Filer after the Lapse Date, the Filer is required to (i) file a pro forma prospectus on or before July 26, 2012, (ii) file a final prospectus on or before September 4, 2012, and (iii) obtain a receipt for such final prospectus on or before September 14, 2012.
The Filer, through a third-party filing agent, filed its pro forma prospectus with the principal regulator and the other Jurisdictions via SEDAR on July 25, 2012. The Filer and its counsel relied on the third party filing agent to effect the filing in accordance with all applicable requirements for SEDAR filing.
Due to an inadvertent filing error which resulted in the Filer’s pro forma prospectus being filed under an incorrect SEDAR file number, staff of the principal regulator remained unaware of the filing of the pro forma prospectus made on July 25, 2012 until August 14, 2012, on which date the filing error was uncovered.
As requested by staff of the principal regulator, the Filer re-filed the pro forma prospectus on August 15, 2012, on which date the principal regulator initiated its review process of the Filer’s pro forma prospectus.
On August 30, 2012 the Filer received, via SEDAR, the principal regulator’s initial comment letter dated August 29, 2012.
The Filer is requesting additional time, by means of an extension of the Lapse Date, to permit the Filer to respond to the principal regulator’s initial comment letter and any subsequent comments, and file a final prospectus which satisfactorily addresses all the comments. The requested extension of the Lapse Date is equal in time (20 days) to the amount of time that passed between the date of the original filing of the pro forma prospectus (July 25, 2012) and the date on which the principal regulator advised that it had previously been unaware of the filing of the pro forma prospectus due to the use of the incorrect SEDAR file number (August 14, 2012). The Filer submits that such 20-day extension of the Lapse Date would place the Filer in the same position with regard to the schedule for review of the re-filed pro forma prospectus as it would have been in if the principal regulator had been aware of the original filing of the pro forma prospectus on July 25, 2012.
The Filer submits that this application is the result of an administrative error and would not be necessary except for the fact that the pro forma prospectus was filed using an incorrect SEDAR file number, over which the Filer had no knowledge or control. Furthermore, the extension requested will not affect the currency or accuracy of the information contained in the Current Prospectus as there have been no material changes in the affairs of the Filer other than those for which amendments to the Current Prospectus have been filed. Accordingly, the Requested Relief would not be prejudicial to the public interest.
Decision
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.
“Raymond Chan”
Raymond Chan,
Manager, Investment Funds Ontario Securities Commission