October 6, 2017
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 BMG MANAGEMENT SERVICES INC. (THE FILER)
AND
IN THE MATTER OF BMG BullionFund, Bmg gold Bullionfund and bmg silver bullionfund (the bMG Funds)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of the BMG Funds, for a decision under the securities legislation of the Jurisdiction (the Legislation) for an extension of the time limits pertaining to filing the renewal prospectus of the BMG Funds as if the lapse date of the simplified prospectus, annual information form and Fund Facts of the BMG Funds dated September 26, 2016, is November 13, 2017 (the Requested Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
the Ontario Securities Commission (the OSC) is the principal regulator for this application; and;
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 (collectively, the Other 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 and the BMG Funds
The Filer is a corporation incorporated under the laws of Ontario. The Filer’s head office is located in Toronto Ontario.
The Filer is registered as an investment fund manager under the securities legislation of each of Ontario, Québec and Newfoundland and Labrador. The Filer is the investment fund manager, trustee and promoter of the BMG Funds.
The BMG Funds are currently offered in Ontario and each of the Other Jurisdictions by way of a simplified prospectus, an annual information form and a fund facts, each dated September 26, 2016 (the Current Offering Documents) and have a lapse date of September 26, 2017.
Pursuant to section 2.5(4)(a) of National Instrument 81-101 Mutual Fund Prospectus Disclosure, the BMG Funds recently filed a preliminary and pro forma simplified prospectus, a preliminary and pro forma annual information form, and preliminary and pro forma fund facts, each dated August 25, 2017 (the Renewal Offering Documents). The ‘preliminary’ part of the Renewal Offering Documents reflects the addition of new Class D units of the BMG Funds (the Preliminary Part).
The Preliminary Part of the Renewal Offering Documents was receipted by the OSC, as principal regulator, on August 25, 2017.
None of the BMG Funds is in default of the Legislation or the securities legislation of any of the Other Jurisdictions.
The Filer is not in default of the Legislation or the securities legislation of any of the Other Jurisdictions, except for certain registration filings pertaining to certain ownership changes, which have been disclosed to and discussed with the OSC and are in the process of being brought up-to-date.
Pre-Filing Application
The Filer and the BMG Funds filed a pre-filing application on September 12, 2017 with the OSC (the Pre-Filing Application). The Pre-Filing Application raises issues which if left unresolved, may potentially impact the prospectus disclosure of the BMG Funds.
As discussions with the OSC are ongoing regarding the Pre-Filing Application, and as the Filer needs additional time to consider and to respond to the comments of the OSC regarding the Pre-Filing Application, the Renewal Offering Documents cannot be finalized at this time.
The Filer and the BMG Funds need the Requested Relief so they have adequate time to address and discuss the Pre-Filing Application with the OSC.
There have been no material changes in the affairs of the BMG Funds since the date of the Current Offering Documents. Accordingly, the Current Offering Documents generally represent current information regarding the BMG Funds.
Given the disclosure obligations of the BMG Funds, should any material changes occur, the Current Offering Documents will be amended as required under the Legislation.
The Requested Relief will not affect the general accuracy of the information contained in the Current Offering Documents and will therefore 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.
“Vera Nunes”
Vera Nunes
Manager, Investment Funds and Structured Products
Ontario Securities Commission