Headnote
National Policy 11-203 Process for Exemptive Relief in Multiple Jurisdictions – Relief granted to scholarship plan and mutual fund for extension of prospectus lapse date to January 15, 2013 – additional time needed for consideration of consultant’s report required pursuant to temporary order issued against the investment fund manager – extension of lapse date will not impact currency of disclosure relating to the funds.
Applicable Legislative Provisions Securities Act, R.S.O. 1990, c. S 5 as amended, ss. 62(5).
November 30, 2012
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)
AND
IN THE MATTER OF GLOBAL GROWTH ASSETS INC. (the Manager)
AND
GLOBAL EDUCATIONAL TRUST PLAN (the Plan)
AND
CAPITAL PRESERVATION FUND (the Fund)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the manager 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 prospectus of the Plan and the Fund be extended as if the lapse date of the Plan’s prospectus dated August 26, 2011 and the Fund’s prospectus dated November 30, 2011 (together, the “Current Prospectus”) is January 15, 2013 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and
(b) the Manager 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, Prince Edward Island, Newfoundland and Nova Scotia (together with the Jurisdiction, the Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Manager:
The Manager is the investment fund manager of each of the Plan and the Fund.
The Plan is an “Education Savings Plan” under s. 146.1 of the Income Tax Act (Canada).
The Fund is a mutual fund established by a declaration of trust in Ontario.
Units of the Plan are currently qualified for distribution in each of the Jurisdictions under a prospectus dated August 26, 2011 and the Plan is a reporting issuer in each of the Jurisdictions.
Given the anticipated timing of a report (the Consultant’s Report) requested by OSC Staff from the Manager, on September 5, 2012 OSC Staff granted a lapse date extension to the Plan to November 30, 2012.
Units of the Fund are currently qualified for distribution in each of the Jurisdictions under a prospectus dated November 30, 2011 and the Fund is a reporting issuer in each of the Jurisdictions.
None of the Plan, the Fund, or the Manager, is in default of securities legislation in any of the Jurisdictions.
The lapse date (the Current Lapse Date) of each Current Prospectus is November 30, 2012. Under the Legislation the distribution of each of the Plan’s and the Fund’s units would have to cease on the Current Lapse Date unless (a) a pro forma prospectus for the Plan was filed at least 30 days prior to the Current Lapse Date, (b) the final prospectus is filed no later than 10 days after the Current Lapse Date and (c) a receipt for the final prospectus is obtained within 20 days of the Current Lapse Date.
A pro forma prospectus for the Plan was filed on July 26, 2012 and an extension was granted moving the lapse date to November 30, 2012. This means that absent the Exemption Sought, the final prospectus would have to be filed by December 10, 2012, and a receipt must be obtained by December 20, 2012, in order for the distribution of units of the Plan to continue without interruption.
A pro forma prospectus for the Fund was filed on May 16, 2012. This means that absent the Exemption Sought, the final prospectus would have to be filed by December 10, 2012, and a receipt must be obtained by December 20, 2012, in order for the distribution of units of the Plan to continue without interruption.
Since September 5, 2012, an initial Consultant’s Report was submitted to OSC staff. Upon review, OSC staff has determined that additional revisions to the Consultant’s Report are necessary. OSC staff is currently awaiting revisions to the Consultant’s Report which will enable OSC staff to further determine the acceptability of the Consultant’s Report.
Given the anticipated timing of revisions to the Consultant’s Report the Manager will be providing to OSC staff, OSC staff have indicated to the Manager that they will not be able to complete their review of the pro forma prospectus and issue a receipt for the final prospectus within the required time period. The Exemption Sought is requested in order to allow OSC staff sufficient time to complete its review and consideration of the acceptability of the revised Consultant’s Report without resulting in the Plan or the Fund being forced to cease distribution of its units because each Current Prospectus has lapsed.
Since the date of the Current Prospectuses, there has been no undisclosed material change in the Plan or the Fund, as appropriate. Accordingly, each Current Prospectus continues to provide accurate information regarding the Plan or the Fund, as appropriate.
Should any material changes be proposed in the interim, the prospectus of the Plan or the Fund, as appropriate, will be amended accordingly. Therefore, the Exemption Sought will not affect the currency or accuracy of the information contained in either Current Prospectus, and therefore will 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 Exemption Sought is granted.
“Vera Nunes”
Vera Nunes Manager, Investment Funds Branch
Ontario Securities Commission