In the Matter of CI Investments Inc., 2017 CanLII 63630

August 22, 2017

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

AND

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IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

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IN THE MATTER OF CI INVESTMENTS INC. (CI)

AND

IN THE MATTER OF THE FUNDS (as defined below)

AND

IN THE MATTER OF ASSANTE CAPITAL MANAGEMENT LTD. (the Representative Dealer, and together with CI, the Filers)

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Background

The principal regulator in the Jurisdiction has received an application from CI on behalf of each existing mutual fund managed by it (the Existing Funds) and any mutual fund that CI may establish in the future (the Future Funds, and together with the Existing Funds, the Funds), and the Representative Dealer for a decision, under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting:

(a) each dealer who trades in securities of the Funds (a Dealer) from the requirement in the Legislation for a dealer to deliver or send the most recently-filed fund facts document (a Fund Facts) before the dealer accepts an instruction from the purchaser for the purchase of the security (the Pre-Sale Fund Facts Delivery Requirement) in respect of purchases of mutual fund securities that are made pursuant to the Automatic Switches (as defined below) (the Fund Facts Delivery Relief); and

(b) the Funds from the requirement in section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) to prepare a Fund Facts in the form of Form 81- 101F3 Contents of Fund Facts Document (Form 81-101F3), to permit the Funds to deviate from certain requirements in Form 81-101F3 in order to prepare a Multiple Fund Facts Document (as defined below) that includes the Program Disclosure (as defined below) (the “Multiple Fund Facts Relief”).

(the Multiple Fund Facts Relief, and together with the Fund Facts Delivery Relief, the Exemption Sought).

CI also requests, that the Original Decision (as defined below) be revoked and replaced with the Exemption Sought (the Revocation).

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 subsection 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 (collectively, the Passport Jurisdictions, and together with the Jurisdiction, the Jurisdictions).

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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.

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Representations

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


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## CI

1. CI is a corporation subsisting under the laws of the Province of Ontario with its head office located in Toronto, Ontario.

2. CI is registered as follows:

(a) in all provinces as a portfolio manager;

(b) in Ontario, Québec, and Newfoundland and Labrador as an investment fund manager;

(c) in Ontario as an exempt market dealer; and

(d) under the [Commodity Futures Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-c20/latest/rso-1990-c-c20.html) (Ontario) as a commodity trading counsel and a commodity trading manager.

3. CI is, or will be, the investment fund manager of the Funds.

4. CI is not in default of securities legislation in any of the Jurisdictions.

## The Funds

5. Each Fund is, or will be, an open-end mutual fund trust created under the laws of Ontario, or an open-end mutual fund that is a class of shares of a mutual fund corporation incorporated under the laws of Ontario.

6. Each Fund is, or will be, a reporting issuer under the laws of all of the provinces and territories of Canada and subject to National Instrument 81-102 Investment Funds. The securities of each of the Funds are, or will be, qualified for distribution pursuant to a simplified prospectus, Fund Facts and annual information form that have been, or will be, prepared, filed and receipted in accordance with NI 81-101.

7. Securities of the Existing Funds are currently offered under simplified prospectuses, Fund Facts and annual information forms dated July 27, 2017, and are separated into two main fund families, namely CI Funds (the CI Funds) and United Funds (the United Funds).

8. The CI Funds are currently offered in multiple classes of securities, including Class A, AT5 and AT8 (collectively, the CI A Classes) and F, FT5 and FT8 (collectively, the CI F Classes).

9. The United Funds are currently offered in multiple classes of securities, including Class E and ET8 (collectively, the United E Classes, and together with the CI A Classes, the A/E Classes) and F. CI also offers Class FT8 in United Funds (together with Class F offered in United Funds and CI F Classes, the F Main Classes, and together with the A/E Classes, the Main Classes).

10. Securities in the A/E Classes are currently offered on an initial sales charge (ISC) basis (ISC Option Main Class Securities) or on a deferred sales charge (DSC) basis (DSC Option Main Class Securities), at the option of the investor. Investors in the A/E Classes under the ISC purchase option (the ISC Option Main Classes) pay a commission to their Dealer at the time they purchase securities. Investors in the A/E Classes under the DSC purchase options (the DSC Option Main Classes) do not pay a commission at the time of purchase, but the investor will be required to pay a redemption fee if he or she redeems within seven years from the date of purchase (under the standard DSC and intermediate DSC options) or three years from the date of purchase (under the low load DSC option) (each a DSC Period, and collectively, the DSC Periods). Trailing commissions are paid to Dealers who sell securities in the A/E Classes.

11. CI will automatically convert DSC Option Main Class Securities into ISC Option Main Class Securities of the same Fund, respectively, once qualifying investors have held their DSC Option Main Class Securities for the DSC Period. The conversion from DSC Option Main Class Securities into ISC Option Main Class Securities is a change of sales charge option within the same class and is therefore not a switch involving a redemption and a purchase of securities.

12. Class AT5 and Class AT8 securities have the same attributes as Class A securities, except that Class AT5 and Class AT8 are designed to provide tax efficient cash flow to investors by making monthly distributions of an amount comprised of a return of capital and/or net income. The only difference between Class AT5 and Class AT8 is in the value of the monthly distribution amounts. Similarly, Class ET8 has the same attributes as Class E securities, except that Class ET8 is designed to provide tax efficient cash flow to investors by making monthly distributions of an amount comprised of a return of capital and/or net income.

13. Securities in the F Main Classes (F Main Class Securities, and together with the ISC Option Main Class Securities and DSC Option Main Class Securities, the Main Class Securities) have, or will have, lower fees than securities in CI A Classes or United E Classes, as applicable, and are, or will be, purchased by investors who have fee-based accounts with Dealers who sign an eligibility agreement with CI. Instead of paying sales charges, investors pay, or will pay, their Dealer a fee for investment advice and other services they provide. In addition, CI does not, or will not, pay any commission or trailing commission to Dealers who sell F Main Class Securities.

14. Class FT5 and Class FT8 securities in CI Funds have the same attributes as Class F securities in CI Funds, as applicable, except that Class FT5 and Class FT8 in CI Funds are designed to provide tax efficient cash flow to investors by making monthly distributions of an amount comprised of a return of capital and/or net income. The only difference between Class FT5 and Class FT8 in CI Funds is in the value of the monthly distribution amounts. Similarly, Class FT8 securities in United Funds will have the same attributes as Class F securities in United Funds, except that Class FT8 in United Funds is designed to provide tax efficient cash flow to investors by making monthly distributions of an amount comprised of a return of capital and/or net income.

15. Other than the Funds that are offered for purchase in U.S. dollars only, the Funds are offered for purchase in Canadian dollars. In addition, certain classes of the Funds offered for purchase in Canadian dollars may also be purchased in U.S. dollars (the U.S. Dollar Purchase Option).

16. The Existing Funds are not in default of securities legislation in any of the Jurisdictions.

## The Representative Dealer

17. Securities of the CI Funds are, or will be, distributed through Dealers who may or may not be affiliated with CI, including the Representative Dealer. Securities of the United Funds are, or will be, distributed exclusively through two Dealers, namely the Representative Dealer and Assante Financial Management Ltd., as principal distributors.

18. The Representative Dealer is a member of the Investment Industry Regulatory Organization of Canada and is registered in the category of investment dealer in the Jurisdictions.

19. Each Dealer is, or will be, registered as a dealer in one or more of the provinces and territories of Canada. Other than Dealers who are registered as exempt market dealers, the Dealers are, or will be, members of either the Investment Industry Regulatory Organization of Canada or the Mutual Fund Dealers Association of Canada.

20. The Representative Dealer is not in default of securities legislation in any of the Jurisdictions.

## The Automatic Switching Program

21. CI currently offers three sets of classes of securities which offer tiered management and administration fees for holders of F Main Class Securities. The first set includes Classes F1, F2, F3, F4 and F5 (collectively, the Class F Fee Tier Classes) and corresponds to Class F of each of CI Funds and United Funds (together with the Class F Fee Tier Classes, the Class F Set). The second set includes Classes F1T5, F2T5, F3T5, F4T5 and F5T5 (collectively, the Class FT5 Fee Tier Classes) and corresponds to Class FT5 of CI Funds (together with the Class FT5 Fee Tier Classes, the Class FT5 Set). The third set includes Classes F1T8, F2T8, F3T8, F4T8 and F5T8 (collectively, the Class FT8 Fee Tier Classes, and together with the Class F Fee Tier Classes and Class FT5 Fee Tier Classes, the F Fee Tier Classes) and corresponds to Class FT8 of each of CI Funds and United Funds (together with the Class FT8 Fee Tier Classes, the Class FT8 Set).

22. In addition, CI currently offers five sets of classes of securities which offer tiered management and administration fees for holders of ISC Option Main Class Securities. The first set includes Classes A1, A2, A3, A4 and A5 (collectively, the Class A Fee Tier Classes) and corresponds to Class A of CI Funds (together with the Class A Fee Tier Classes, the Class A Set). The second set includes Classes A1T5, A2T5, A3T5, A4T5 and A5T5 (collectively, the Class AT5 Fee Tier Classes) and corresponds to Class AT5 of CI Funds (together with the Class AT5 Fee Tier Classes, the Class AT5 Set). The third set includes Classes A1T8, A2T8, A3T8, A4T8 and A5T8 (collectively, the Class AT8 Fee Tier Classes) and corresponds to Class AT8 of CI Funds (together with the Class AT8 Fee Tier Classes, the Class AT8 Set). The fourth set includes Classes E1, E2, E3, E4 and E5 (collectively, the Class E Fee Tier Classes) and corresponds to Class E of United Funds (together with the Class E Fee Tier Classes, the Class E Set). The fifth set includes Classes E1T8, E2T8, E3T8, E4T8 and E5T8 (collectively, the Class ET8 Fee Tier Classes, and together with the Class A Fee Tier Classes, Class AT5 Fee Tier Classes, Class AT8 Fee Tier Classes and Class E Fee Tier Classes, the ISC Fee Tier Classes, and together with the F Fee Tier Classes, the Fee Tier Classes) and corresponds to Class ET8 of United Funds (together with the Class ET8 Fee Tier Classes, the Class ET8 Set, and together with the Class F Set, Class FT5 Set, Class FT8 Set, Class A Set, Class AT5 Set, Class AT8 Set and Class E Set, the Program Sets and each, individually, a Program Set).

23. Each set of tiered classes, consisting of the Class F Fee Tier Classes, Class FT5 Fee Tier Classes, Class FT8 Fee Tier Classes, Class A Fee Tier Classes, Class AT5 Fee Tier Classes, Class AT8 Fee Tier Classes, Class E Fee Tier Classes and Class ET8 Fee Tier Classes (collectively, the Tiered Sets and each, individually, a Tiered Set), offers progressively lower combined management and administration fees than the corresponding ISC Option Main Class or F Main Class based on the value of holdings of the Funds in an investor’s account or, in certain instances, the group of related accounts of which an investor is a member (the Asset Level). On a weekly basis, CI automatically switches qualifying holders of ISC Option Main Class Securities or F Main Class Securities into and out of the various corresponding ISC Fee Tier Classes or F Fee Tier Classes in the corresponding Tiered Set based on the investor’s Asset Level without the Dealer or investor having to initiate the trade (the Automatic Switching Program).

24. All or certain Fee Tier Classes are, or will be, offered for each of the Funds. Where an investor qualifies for a particular Fee Tier Class that is not available for a Fund, the investor’s securities are automatically switched to the Fee Tier Class with the next lowest combined management and administration fee that is available for such Fund. If a Fee Tier Class with a lower combined management and administration fee for which the investor is eligible is launched at a later date, the investor’s securities will be automatically switched to that Fee Tier Class. CI may, in the future, offer additional Fee Tier Classes to the Funds which only offer certain Fee Tier Classes. CI may, in the future, offer additional fee tier classes to the Program Sets.

25. The introduction of additional fee tier classes to a Tiered Set will not cause the Program Disclosure to detract from the readability and comprehension of the Multiple Fund Facts Document.

26. In a situation where fund performance reduces the investor’s Asset Level below the particular Fee Tier Class’ minimum threshold for which the investor previously qualified, the investor would continue to enjoy the benefit of the lower management and administration fees associated with such Fee Tier Class.

27. The U.S. Dollar Purchase Option is offered in certain Fee Tier Classes. The U.S. Dollar Purchase Option was initially offered in Fee Tier Classes for which there were investors who would be eligible at the time the Automatic Switching Program was introduced (the “Implementation Date”) for the automatic switches of Main Class Securities purchased under the U.S. Dollar Purchase Option to the corresponding Fee Tier Classes. Each Fee Tier Class has the same minimum threshold in Canadian dollars across all Funds, including Funds with a U.S. Dollar Purchase Option. CI may offer the U.S. Dollar Purchase Option in respect of additional Funds or Fee Tier Classes in the future.

28. Investors may only access the F Fee Tier Classes of a Fund by initially purchasing the corresponding F Main Class Securities of the Fund or if they already hold the particular F Fee Tier Class of the same Fund or other Fund(s). Investors may only access the ISC Fee Tier Classes of a Fund by initially purchasing the corresponding ISC Option Main Class Securities of the Fund, if they already hold the particular ISC Fee Tier Class of the same Fund or other Fund(s), or by acquiring the corresponding ISC Option Main Class Securities of that Fund upon the conversion of those ISC Option Main Class Securities from qualifying DSC Option Main Class Securities after the expiration of the applicable DSC Period.

29. For accounts with securities in the ISC Option Main Classes or F Main Classes that have qualified for any of the corresponding Fee Tier Classes, CI automatically switches:

(a) securities in F Main Class or ISC Option Main Class into the appropriate F Fee Tier Class or ISC Fee Tier Class, as the case may be, of the same Fund;

(b) securities, once in an F Fee Tier Class or ISC Fee Tier Class, among the appropriate classes in the applicable Tiered Set of the same Fund based on increases in Asset Level, including as a result of additional purchases and/or positive fund performance; and

(c) securities to the applicable higher cost F Fee Tier Class or ISC Fee Tier Class, as the case may be, or from an F Fee Tier Class or ISC Fee Tier Class back into the corresponding F Main Class or ISC Option Main Class, as the case may be, of the same Fund, where the account(s) no longer meet the applicable Asset Level threshold as a result of redemptions

(each an Automatic Switch).

30. Following an Automatic Switch, an investor continues to hold securities in the same Fund(s) but in a different class, with the only material difference to the investor being that the combined management and administration fees of each Fee Tier Class in a Tiered Set are progressively lower than those charged for the corresponding F Main Class or ISC Option Main Class. In no event will: (a) an investor who qualifies for an F Fee Tier Class be subject to a higher combined management and administration fee than that of the F Main Class for which he or she initially subscribed; or (b) an investor who qualifies for an ISC Fee Tier Class be subject to a higher combined management and administration fee than that of the ISC Option Main Class for which he or she initially subscribed or acquired upon a conversion of those ISC Option Main Class Securities from DSC Option Main Class Securities.

31. There are no embedded commissions or trailing commissions in the F Fee Tier Classes. In addition, there are no sales charges associated with the F Fee Tier Classes.

32. Sales charges and trailing commissions may apply to the ISC Fee Tier Classes. The rates of sales charges and trailing commissions attached to each ISC Fee Tier Class will not exceed the rates associated with the corresponding ISC Option Main Class.

33. The Automatic Switches will have no adverse tax consequences on investors under current Canadian tax legislation.

## Multiple Fund Facts Relief

34. CI prepares, for each of their Funds, a consolidated Fund Facts for each Program Set (a Multiple Fund Facts Document).

35. Each Multiple Fund Facts Document includes the information required by Form 81- 101F3 for each of the classes in the applicable Program Set, except for the past performance section, which only discloses past performance data of the applicable Main Class, as the case may be, as further described in representations 36(h) and (i) below.

36. Specifically, for each Multiple Fund Facts Document, CI deviates from the following requirements in Form 81-101F3:

(a) General Instructions (10) and (16), to permit the Multiple Fund Facts Document to be the Fund Facts for, and disclose information relating to, each of the classes in the applicable Program Set, except as further described below;

(b) Item 1 (c.1) of Part I, to permit the Multiple Fund Facts Document to name each of the classes in the applicable Program Set in the heading;

(c) Instruction (0.1) of Item 2 of Part I, to permit the Multiple Fund Facts Document to identify the fund codes of each of the classes in the applicable Program Set;

(d) Instruction (1) of Item 2 of Part I, to permit the Multiple Fund Facts Document to list the date that each of the classes in the applicable Program Set first became available to the public;

(e) Instruction (3) of Item 2 of Part I, to permit the Multiple Fund Facts Document to disclose the management expense ratio (the MER) of only the applicable Main Class in the applicable Program Set;

(f) Instruction (6) of Item 2 of Part I, to permit the Multiple Fund Facts Document to specify the minimum investment amount and the additional investment amount for only the applicable Main Class in the applicable Program Set;

(g) General Instruction (8), to permit the Multiple Fund Facts Document to include a footnote under the “Quick Facts” table that:

 (i) states that the Fund Facts pertains to all of the classes in the applicable Program Set;

 (ii) cross-references the “How much does it cost?” section of the Fund Facts for further details about the Automatic Switching Program;

 (iii) states that the U.S. Dollar Purchase Option is available for certain of the classes in the applicable Program Set and cross-references the simplified prospectus for further details; and

 (iv) cross-references the fee decrease table under the sub-heading “Fund expenses” of the Fund Facts for further details about the minimum investment amount applicable to each of the Fee Tier Classes in the applicable Program Set; and

 (v) cross-references the fund expenses table under the sub-heading “Fund expenses” of the Fund Facts for the management expense ratio (the MER) of each of the Fee Tier Classes in the applicable Program Set.

(h) Item 5(1) of Part I, to permit the Multiple Fund Facts Document to:

 (i) reference only the applicable Main Class in the introduction under the heading “How has the fund performed?”; and

 (ii) include, as a part of the introduction, disclosure explaining that the performance for each of the applicable Fee Tier Classes in the Program Set would be similar to the performance of the corresponding Main Class, but would vary as a result of the difference in fees compared to the corresponding Main Class, as set out in the fee decrease table under the sub-heading “Fund expenses”;

(i) Instruction (4) of Item 5 of Part I, to permit a Multiple Funds Facts Document to show the required performance data under the sub-headings “Year-by-year returns,” “Best and worst 3-month returns,” and “Average return” relating only to the applicable Main Class;

(j) Item 1(1.1) of Part II, to permit a Multiple Fund Facts Document to:

 (i) refer to all of the classes in the applicable Program Set in the introductory statement under the heading “How much does it cost?”; and

 (ii) include, as a part of the introductory statement, a summary of the Automatic Switching Program, consisting of:

a. a statement explaining that the Automatic Switching Program offers separate classes of securities that charge progressively lower combined management and administration fees than the corresponding Main Class;

b. a statement explaining the scenarios in which the Automatic Switches will be made, including for holders of DSC Option Main Class Securities and including Automatic Switches made due to the investor no longer meeting the eligibility requirements for a particular Fee Tier Class;

c. a statement explaining that an investor will not pay higher combined management and administration fees than those charged to the applicable Main Class as a result of the Automatic Switches;

d. a cross-reference to the fee decrease table under the sub-heading “Fund expenses”;

e. a cross-reference to specific sections of the simplified prospectus of the Funds for more details about the Automatic Switching Program; and

f. a statement disclosing that investors should speak to their representative for more details about the Automatic Switching Program;

(k) Instruction (1) of Item 1 of Part II, to permit a Multiple Fund Facts Document to refer to all of the classes in the applicable Program Set in the introduction under the sub-heading “Sales charges”, if applicable;

(l) Item 1(1.3)(2) of Part II, to permit a Multiple Fund Facts Document, where the applicable Fund is not new, to:

 (i) disclose the MER and fund expenses of each of the classes in the applicable Program Set, and where certain information is not available for a particular class, to state “not available” in the corresponding part of the table; and

 (ii) add a row in the table:

a. in which the first column states “For every $1,000 invested, this equals:”; and

b. which discloses the respective equivalent dollar amounts of the fund expenses of each class included in the table for each $1,000 investment;

(m) Item 1(1.3)(3) of Part II, to permit a Multiple Fund Facts Document, where the applicable Fund and all classes in the applicable Program Set are not new, to include, instead of the mandated statement above the fund expenses table:

 (i) a statement explaining that the applicable Main Class has the highest combined management and administration fees among all of the classes in the applicable Program Set; and

 (ii) a statement stating “As of [the date of the most recently-filed management report of fund performance], the fund expenses were as follows:”;

(n) Item 1(1.3)(3) of Part II, to permit a Multiple Fund Facts Document, where the applicable Fund is not new but where some of the classes in the applicable Program Set are new, to include, instead of the mandated statement above the fund expenses table:

 (i) a statement explaining that the applicable Main Class has the highest combined management and administration fees among all of the classes in the applicable Program Set;

 (ii) a statement disclosing that the fund expenses information below is not available for certain classes because they are new, as indicated below; and

 (iii) a statement stating “As of [the date of the most recently filed management report of fund performance], the fund expenses were as follows:”;

(o) Item 1(1.3)(4) of Part II, to permit a Multiple Fund Facts Document, where the applicable Fund is new, to:

 (i) include disclosure explaining that the applicable Main Class has the highest combined management and administration fees among all of the classes in the applicable Program Set;

 (ii) disclose the rates of the management fee and administration fee of only the applicable Main Class; and

 (iii) for only the applicable Main Class, disclose that the operating expenses and trading costs are not available because it is new; and

(p) General Instruction (8), to permit a Multiple Fund Facts Document to include, at the end of the disclosure under the sub-heading “Fund expenses”:

 (i) a table that discloses:

a. the name of, and qualifying investment amounts associated with, each of the classes in the applicable Program Set; and

b. the combined management and administration fee decrease of each of the Fee Tier Classes in the applicable Program Set from the combined management and administration fee of the applicable Main Class, shown in percentage terms; and

 (ii) an introduction to the table stating that the table sets out the combined management and administration fee decrease of each of the Fee Tier Classes in the applicable Program Set from the combined management and administration fee of the applicable Main Class

(collectively, the Program Disclosure).

37. CI submits that, given that each of the Main Classes and Fee Tier Classes belong to the Automatic Switching Program, and an investor in the Automatic Switching Program would make one investment decision at the outset by purchasing the Main Class Securities of a Fund or, if eligible, securities of a Fee Tier Class of a Fund, a Multiple Fund Facts Document containing the Program Disclosure provides investors with a more comprehensive disclosure about the Automatic Switching Program and each of the classes in the applicable Program Set compared to disclosure in separate Fund Facts for each of the classes in the applicable Program Set.

38. Since, if the Fund Facts Delivery Relief described below is granted, the Fund Facts for each of the Fee Tier Classes would not be delivered in connection with an Automatic Switch, CI submits that there is little benefit to preparing separate Fund Facts for each of the classes in the applicable Program Set. CI submits that the Multiple Fund Facts Document containing the Program Disclosure, which is currently delivered to investors before their initial investment of Main Class Securities of a Fund or, if eligible, securities of a Fee Tier Class of a Fund, provides investors with better disclosure than if investors received the Fund Facts pertaining only to the applicable Main Class or Fee Tier Class under the Automatic Switching Program.

## Fund Facts Delivery Relief

39. Each Automatic Switch entails a redemption of securities of the applicable ISC Option Main Class, F Main Class, ISC Fee Tier Class or F Fee Tier Class, as the case may be, immediately followed by a purchase of securities of the applicable ISC Option Main Class, F Main Class, ISC Fee Tier Class or F Fee Tier Class, as the case may be. Each purchase of securities completed as part of the Automatic Switch is a “distribution” under the Legislation that triggers the Pre-Sale Fund Facts Delivery Requirement.

40. The Multiple Fund Facts Document containing the Program Disclosure is delivered to investors before their first purchase of Main Class Securities of a Fund or, if eligible, securities of a Fee Tier Class of a Fund in accordance with the Pre-Sale Fund Facts Delivery Requirement.

41. However, while CI initiates each trade completed as part of the Automatic Switches, each Dealer does not propose to deliver the applicable Multiple Fund Facts Document to investors in connection with the purchase of securities made pursuant to Automatic Switches since:

(a) at no time will:

 (i) an investor who qualifies for an F Fee Tier Class be subject to a higher combined management and administration fee than that of the F Main Class for which he or she initially subscribed; or

 (ii) an investor who qualifies for an ISC Fee Tier Class be subject to a higher combined management and administration fee than that of the ISC Option Main Class for which he or she initially subscribed or acquired upon the conversion of those ISC Option Main Class Securities from DSC Option Main Class Securities; and

(b) in all cases:

 (i) all holders of Main Class Securities as at the Implementation Date (the “Existing Investors”) have received a prospectus or Fund Facts Document disclosing the higher level of fees which applied to the particular class or classes for which they initially subscribed; and

 (ii) after the Implementation Date, all new purchasers of Main Class Securities of a Fund or, if eligible, securities of Fee Tier Classes of a Fund, would have, upon their initial purchase of such securities, received a Multiple Fund Facts Document incorporating all relevant information about all classes of the applicable Program Set, and investors would derive little benefit from receiving a further Multiple Fund Facts Document for each Automatic Switch.

42. Details of the changes in classes of securities pursuant to the Automatic Switches are reflected in the account statements sent to investors by their Dealer pursuant to the Legislation.

43. The SP Disclosure (as defined below) is included in the simplified prospectuses of the Funds dated July 27, 2017. The related Multiple Fund Facts Documents contain the Program Disclosure for each of the Funds.

44. CI has communicated with Dealers and their advisors about the Automatic Switches so that Dealers and their advisors are equipped to appropriately notify Existing Investors in the Main Classes of the changes applying to their investments and to appropriately advise new investors of the Automatic Switching Program. CI has also communicated directly to investors about the Automatic Switching Program by way of press releases and website postings.

45. In the absence of the Exemption Sought:

(a) CI would be required to prepare separate Fund Facts for each of the Main Classes and Fee Tier Classes; and

(b) each Dealer would be required to deliver the applicable Fund Facts to investors in connection with the purchase of securities made pursuant to each Automatic Switch.

## The Original Decision

46. CI was previously granted the Multiple Fund Facts Relief and the Fund Facts Delivery Relief pursuant to a decision dated February 10, 2017, In the Matter of CI Investments Inc. et. al., (the Original Decision).

# 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:

1. the Revocation is granted; and

2. the Multiple Fund Facts Relief is granted provided that each Multiple Fund Facts Document contains the Program Disclosure; and

3. the Fund Facts Delivery Relief is granted provided that:

(a) CI incorporates disclosure in the simplified prospectus for each Fund participating in the Automatic Switching Program that describes the Automatic Switching Program, including setting out (collectively, the SP Disclosure):

 (i) the eligibility requirements for the applicable Main Classes and Fee Tier Classes;

 (ii) the fees applicable to investments in the applicable Main Classes and Fee Tier Classes; and

 (iii) that if investors cease to meet the eligibility requirements of a specific Fee Tier Class, their investment will be switched (i) to a Fee Tier Class with higher combined management and administration fees which will not exceed the combined management and administration fees of the corresponding Main Class, or (ii) back to the corresponding Main Class;

(b) CI, together with Dealers and their advisors, devise a notification plan regarding the Automatic Switches to Existing Investors with holdings of Main Class Securities with an Asset Level of $125,000 or more to communicate the following:

 (i) that their investment may be automatically switched to a Fee Tier Class with lower fees upon meeting applicable eligibility requirements;

 (ii) that, other than a difference in fees, there will be no other material difference among the applicable Main Class and the corresponding Fee Tier Classes of the same Fund;

 (iii) that if they cease to meet the eligibility requirements of a specific Fee Tier Class, their investment will be switched (i) to a Fee Tier Class with higher combined management and administration fees which will not exceed the combined management and administration fees of the corresponding Main Class, or (ii) back to the corresponding Main Class; and

 (iv) that they will not receive a Multiple Fund Facts Document when they purchase securities further to an Automatic Switch, but that:

a. they may request the most recently-filed Multiple Fund Facts Document by calling a specified toll-free number or by sending a request via email to a specified address or email address;

b. the most recently-filed Multiple Fund Facts Document will be sent or delivered to them at no cost, if requested;

c. the most recently-filed Multiple Fund Facts Document may be found either on the SEDAR website or on CI’s website; and

d. they will not have the right to withdraw from an agreement of purchase and sale (a Withdrawal Right) in respect of a purchase of securities made pursuant to an Automatic Switch, but they will have the right of action for damages or rescission in the event any Fund Facts or document incorporated by reference into a simplified prospectus for the relevant class contains a misrepresentation, whether or not they request the Fund Facts;

(c) for investors who purchase Main Class Securities of a Fund or, if eligible, securities of Fee Tier Classes of a Fund after the Implementation Date, the Multiple Fund Facts Document containing the Program Disclosure is delivered to investors before their first purchase of the Main Class Securities of a Fund or, if eligible, securities of Fee Tier Classes of a Fund, in accordance with the Pre-Sale Fund Facts Delivery Requirement;

(d) for investors invested in Fee Tier Classes, CI sends to these investors an annual reminder notice advising them that they will not receive the Multiple Fund Facts Document when they purchase securities further to an Automatic Switch, but that:

 (i) they may request the most recently-filed Multiple Fund Facts Document by calling a specified toll-free number or by sending a request via email to a specified address or email address;

 (ii) the most recently-filed Multiple Fund Facts Document will be sent or delivered to them at no cost, if requested;

 (iii) the most recently-filed Multiple Fund Facts Document may be found either on the SEDAR website or on CI’s website; and

 (iv) they will not have a Withdrawal Right in respect of a purchase of securities made pursuant to an Automatic Switch, but they will have the right of action for damages or rescission in the event any Fund Facts or document incorporated by reference into a simplified prospectus for the relevant class contains a misrepresentation, whether or not they request the Fund Facts;

(e) CI provides to the principal regulator, on an annual basis, beginning 60 days after the date upon which the Fund Facts Delivery Relief is first relied upon by a Dealer, either:

 (i) a current list of all such Dealers that are relying on the Fund Facts Delivery Relief; or

 (ii) an update to the list of such Dealers or confirmation that there has been no change to such list; and

(f) prior to a Dealer relying on the Fund Facts Delivery Relief, CI provides to the Dealer a disclosure statement informing the Dealer of the implications of this decision.

“Vera Nunes”

Vera Nunes

Manager, Investment Funds and Structured Products Branch Ontario Securities Commission