April 16, 2021
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 EDGEHILL PARTNERS AND EHP FUNDS INC. (the Filers)
AND
THE TOP FUNDS (as defined below)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filers, on behalf of Edgehill Partners (Edgehill), EHP Funds Inc. (EHP), EHP Global Multi-Strategy Fund (the Initial Top Fund) or any other investment fund that is not a reporting issuer under the securities legislation of the Jurisdiction (the Legislation) and that is established, advised or managed by Edgehill or EHP after the date hereof (the Future Top Funds and, together with the Initial Top Fund, the Top Funds), which invests its assets in any of EHP Advantage Alternative Fund, EHP Advantage International Alternative Fund, EHP Foundation Alternative Fund, EHP Foundation International Alternative Fund, EHP Select Alternative Fund and EHP Global Arbitrage Alternative Fund (collectively, the Initial Underlying Funds) or any other investment fund that is, or will be, a reporting issuer under the securities legislation in any of the provinces or territories of Canada, established, advised or managed by Edgehill or EHP, or an affiliate thereof, after the date hereof (the Future Underlying Funds and, together with the Initial Underlying Funds, the Underlying Funds), for a decision under the Legislation exempting the Filers and the Top Funds from:
(a) the restriction in the Legislation which prohibits:
(i) an investment fund from knowingly making an investment in a person or company in which the investment fund, alone or together with one or more related investment funds, is a substantial securityholder;
(ii) an investment fund from knowingly making an investment in an issuer in which:
(A) any officer or director of the investment fund, its management company or distribution company or an associate of any of them, or
(B) any person or company who is a substantial securityholder of the investment fund, its management company or its distribution company,
has a significant interest; and
(iii) an investment fund, its management company or its distribution company from knowingly holding an investment described in paragraphs (i) and (ii) above
(the Related Issuer Relief);
(b) the requirement in the Legislation that requires each Filer, for each investment fund in respect of which it is a management company, to file a report relating to a purchase or sale of securities between an investment fund and any related person or company within 30 days after the end of a month in which it occurs (the Reporting Relief); and
(c) the restriction in paragraph 13.5(2)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) prohibiting a registered adviser from knowingly causing an investment portfolio managed by it, including an investment fund for which it acts as adviser, to purchase the securities of any issuer in which a responsible person or an associate of a responsible person is a partner, officer or director, unless the fact is disclosed to the client and the written consent of the client to the purchase is obtained before the purchase (the "Consent Relief" and collectively with the Related Issuer Relief and the Reporting Relief, the "Requested Relief").
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
the Ontario Securities Commission is the principal regulator for this application; and
the Filers have 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 provinces and territories of Canada.
Interpretation
Unless expressly defined herein, terms in this decision have the respective meanings given to them in National Instrument 14-101 Definitions and MI 11-102.
Representations
This decision is based on the following facts represented by the Filers:
Filers
Edgehill is a general partnership formed under the laws of the Province of Ontario. EHP is a corporation incorporated under the laws of the Province of Ontario. Each of the Filers has its head office in Toronto, Ontario. EHP is an affiliate of Edgehill.
Edgehill is registered as an investment fund manager in the Provinces of Ontario, Québec and Newfoundland and Labrador. Edgehill is also registered as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer in the Provinces of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Ontario, Québec and Saskatchewan.
EHP is registered as an investment fund manager in the Provinces of Ontario, Québec and Newfoundland and Labrador. EHP is also registered as an adviser in the category of portfolio manager in the Province of Ontario.
Edgehill or EHP is, or will be, the manager of the Top Funds. Edgehill or EHP, or an affiliate thereof, is or will be the manager of the Underlying Funds.
Edgehill or EHP is, or will be, responsible for managing the assets of the Top Funds, has, or will have, complete discretion to invest and reinvest the Top Funds' assets, and is, or will be, responsible for executing all portfolio transactions. As such, Edgehill and EHP may be considered a "management company" in respect of the Top Funds as defined in the Legislation. Furthermore, Edgehill or EHP assists, or will assist, in the marketing of the Top Funds and, subject to compliance with applicable securities laws may act as a distributor of securities of the Top Funds not otherwise sold through another registered dealer.
Edgehill or EHP, or an affiliate thereof, is or will be responsible for managing the assets of the Underlying Funds, has, or will have, complete discretion to invest and reinvest the Underlying Funds' assets, and is, or will be, responsible for executing all portfolio transactions. As such, Edgehill and EHP may be considered a "management company" in respect of the Underlying Funds as defined in the Legislation. Furthermore, Edgehill or EHP, or an affiliate thereof, assists or will assist in the marketing of the Underlying Funds and, subject to compliance with applicable securities laws may act as a distributor of securities of the Underlying Funds not otherwise sold through another registered dealer.
Edgehill or EHP is, or will be, the investment fund manager of each Top Fund.
Edgehill or EHP, or an affiliate thereof, is or will be the investment fund manager of each Underlying Fund.
Neither of the Filers is a reporting issuer in any jurisdiction of Canada and neither of the Filers is in default of securities legislation of any jurisdiction of Canada.
The Top Funds
The Top Funds are, or will be, formed as trusts or limited partnerships under the laws of Ontario by a trust agreement or limited partnership agreement, as applicable.
Each of the Top Funds is, or will be, sold pursuant to prospectus exemptions in accordance with the Legislation and National Instrument 45-106 – Prospectus Exemptions (NI 45-106).
Pursuant to an amended and restated trust agreement dated as of December 28, 2020 (the Trust Agreement), Computershare Trust Company of Canada acts as the trustee of the Initial Top Fund. Pursuant to the Trust Agreement, Edgehill has been appointed as the investment fund