BMO Nesbitt Burns Inc. (Re), 2013 CanLII 67037

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted for 55-day extension of prospectus lapse date to December 17, 2013 – Funds are being merged with continuing funds an affiliated mutual fund family on or about December 13, 2013– extension sought to allow Funds to continue operations until mergers are complete – extension of lapse date will not impact currency of disclosure relating to the terminating funds.

Applicable Legislative Provisions Securities Act, R.S.O. 1990, c. S 5 as amended, ss 62(5).

October 17, 2013

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)

AND

IN THE MATTER OF BMO NESBITT BURNS INC. (the Filer)

(collectively, the Funds)

I. Background

The principal regulator in the Jurisdiction (the Decision Maker) 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 that the time limits pertaining to filing the renewal prospectus of the Funds be extended as if the lapse date of the prospectus of the Funds dated October 23, 2012, as amended by amendment no. 1 dated August 30, 2013 and amendment no. 2 dated September 27, 2013 (the Current Prospectus) was December 17, 2013 (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 the other provinces and territories of Canada.

II. Interpretation

Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.

III. representations

This decision is based on the following facts represented by the Filer:

The Filer is the manager of the Funds.
The Filer is a corporation incorporated under the laws of Canada.
The Filer is registered as an investment fund manager in Ontario, Quebec and Newfoundland and Labrador.
Each of the Funds is a reporting issuer in each of the provinces and territories of Canada.
Neither the Funds nor the Filer are in default of securities legislation in any province or territory of Canada.
Units of the Funds are currently qualified for distribution in each of the provinces and territories of Canada under the Current Prospectus.
Pursuant to the Legislation, the lapse date for the Current Prospectus is October 23, 2013 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of units of the Funds would have to cease on the Current Lapse Date unless (i) the Funds file a pro-forma simplified prospectus 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; and (iii) a receipt for the final simplified prospectus is obtained within 20 days of the Current Lapse Date.
On August 19, 2013 the Independent Review Committee of each of the Funds approved the merger of BMO Nesbitt Burns Canadian Stock Selection Fund, BMO Nesbitt Burns U.S. Stock Selection Fund, BMO Nesbitt Burns Bond Fund, BMO Nesbitt Burns Balanced Fund, BMO Nesbitt Burns International Equity Fund, BMO Nesbitt Burns Balanced Portfolio Fund, BMO Nesbitt Burns Growth Portfolio Fund and BMO Nesbitt Burns Maximum Growth Portfolio Fund into BMO Canadian Stock Selection Fund, BMO U.S. Equity Fund, BMO Bond Fund, BMO Asset Allocation Fund, BMO International Value Fund, BMO FundSelect Balanced Portfolio, BMO FundSelect Growth Portfolio and BMO FundSelect Equity Growth Portfolio, respectively (the Mergers). The Mergers are expected to occur after the close of business on or about December 13, 2013 (the Merger Date). Purchases of, and switches into, units of each of the Funds will be suspended at the close of business on the fifth business day prior to the Merger Date.
The Filer intends to cease distribution of units of the Funds at the close of business on December 6, 2013.
The Filer does not intend to renew the Funds’ simplified prospectus and annual information form under subsection 62(2) of the Securities Act (Ontario). Therefore, securities of the Funds will not be qualified for distribution in the period that follows the Current Lapse Date and that leads up to the effective date of the Mergers unless an extension is granted to permit the continued distribution of securities of the Funds during that period.
The Filer expects that, following the Current Lapse Date, distributions of the Funds’ securities will be primarily made to existing investors under the Funds’ pre-authorized purchase plan (PAP). Scheduled purchases under the PAP will continue until the Merger Date.
There have been no material changes in the affairs of the Funds since the date of the Current Prospectus other than those described in amendment no. 1 to the Current Prospectus dated August 30, 2013 and amendment no. 2 to the Current Prospectus dated September 27, 2013.
Should any material changes be proposed in the interim, the Current Prospectus of the Funds will be amended accordingly.

IV. 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