Headnote National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to mutual fund for extension of lapse date of prospectus for 40 days – additional time needed for renewal of prospectus due to ongoing review.
Applicable Legislative Provisions Securities Act, R.S.O. 1990, c. S 5 as amended, s. 62(5).
March 15, 2013
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO (the Jurisdiction)
AND
IN THE MATTER OF
GOODWOOD INC. (the Filer)
AND
GOODWOOD CAPITAL FUND (the Fund)
DECISION
Background
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 (the Legislation) for an exemption under section 62(5) of the Act and section 2.5(7) of National Instrument 81-101, that the time limits pertaining to filing the renewal prospectus of the Fund be extended as if the lapse date of the simplified prospectus and annual information form of the Fund dated March 8, 2012 (the Current Prospectus) is April 17, 2013 (the Requested Relief).
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 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 each of the other provinces and territories of Canada (the Passport 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 Filer:
The Filer is the manager of the Fund.
The Filer is a corporation incorporated under the laws of the Province of Ontario. The Filer is registered as an investment fund manager in Ontario, Quebec and Newfoundland and Labrador and as an investment dealer in Ontario, British Columbia, Alberta, Quebec and Nova Scotia. The Filer is a dealer member of the Investment Industry Regulatory Organization of Canada (IIROC) and its advising activities are conducted in accordance with the rules of IIROC.
The Fund is a reporting issuer in each of the provinces and territories in Canada.
Neither the Fund nor the Filer is in default of securities legislation in any province or territory of Canada.
Units of the Fund are currently qualified for distribution in each province and territory of Canada under the current simplified prospectus of the Fund dated March 8, 2012, as amended by Amendment No. 1 dated January 9, 2013 (Amendment No. 1) (the Current Prospectus).
Pursuant to the Legislation, the lapse date for the Current Prospectus is March 8, 2013 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of units of the Fund would have to cease on the Current Lapse Date unless (i) the Fund files a pro-forma prospectus for the Fund at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Current Lapse Date, i.e. by March 18, 2013; and (iii) a receipt for the final simplified prospectus is obtained within 20 days of the Current Lapse Date.
On February 5, 2013, a pro forma simplified prospectus and a pro forma annual information form for the Fund (the Pro Forma Prospectus) were filed with the OSC. In order to comply with the requirements of the Legislation, the final simplified prospectus and annual information form for the Fund (the Final Renewal Prospectus) must be filed on or before March 18, 2013 and a receipt must be obtained by March 28, 2013 in order for the distribution of units of the Fund to continue without interruption.
Given the ongoing review of the Pro Forma Prospectus and subsequent comments by the OSC, the most recent of which was received on March 7, 2013 and included substantial issues, the Filer is requesting additional time by means of an extension of the Current Lapse Date to April 17, 2013, to permit the Filer to respond to the OSC's comment letter(s), and file the Final Renewal Prospectus for the Fund which satisfactorily addresses all of the comments without resulting in the Fund being forced to cease distribution of units because the Current Prospectus has lapsed.
Since the date of Amendment No. 1, no undisclosed material change has occurred. Accordingly, the Prospectus continues to provide accurate information regarding the Fund.
Given the disclosure obligations of the Filer and the Fund, should any material changes be proposed, the Current Prospectus will be amended accordingly. Therefore, the extension requested will not affect the currency or accuracy of the information contained in the Current Prospectus; and accordingly, 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 Decision Maker under the Legislation is that the Requested Relief is granted.
“Vera Nunes”
Vera Nunes
Manager, Investment Funds
Ontario Securities Commission