Mackenzie Financial Corporation (Re), 2022 CanLII 109939

Ontario Securities Commission

August 12, 2022

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 MACKENZIE FINANCIAL CORPORATION (the Filer)

AND

IN THE MATTER OF MACKENZIE CHINAAMC ALL CHINA BOND FUND AND MACKENZIE TAX-MANAGED GLOBAL EQUITY FUND (the Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limit pertaining to the distribution of securities of the Funds under their simplified prospectus, fund facts and annual information form of the Funds dated June 18, 2021 (the Prospectus) be extended to September 29, 2022 (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(i) the Ontario Securities Commission is the principal regulator for this application; and

(ii) the Filer has 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 (the Other Jurisdictions and together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102, and National Instrument 81-102 Investment Funds 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:

Background Facts

The Filer

1The Filer is a corporation amalgamated under the laws of Ontario with its head office in Toronto, Ontario.

2The Filer is registered as an investment fund manager, portfolio manager, exempt market dealer and commodity trading manager in Ontario. The Filer is also registered as a portfolio manager and exempt market dealer in the Other Jurisdictions, as an investment fund manager in Newfoundland and Labrador and Québec, and as an adviser in Manitoba.

3The Filer is the manager, trustee and portfolio manager of each Fund.

4Each Fund is an open-ended mutual fund trust established under the laws of Ontario and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.

5Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions, except as stated herein with respect to the lapse date of the Funds.

6The Funds currently distribute securities in the Jurisdictions under the Prospectus. Due to an administrative error as further described below, the Funds failed to file a pro forma prospectus in accordance with the time lines stipulated for a renewal of a prospectus under the Legislation. As a result, the Prospectus of the Funds lapsed on June 18, 2022 (the Lapse Date).

7The Filer is the manager of (i) 80 other funds (the Mackenzie Funds) that currently distribute their securities under a simplified prospectus, fund facts and annual information form with a lapse date of September 29, 2022 (the Mackenzie Funds Prospectus). The Filer filed a pro forma prospectus for the Mackenzie Funds on July 29, 2022 (the Mackenzie Funds Pro Forma Prospectus) which included the Funds.

8Under a decision dated May 31, 2022 (the Prior Relief), the Filer and 13 other funds it manages were granted relief which extended the lapse date of the prospectus of those other funds to September 29, 2022 to coincide with the lapse date of the Mackenzie Funds Prospectus in order to enable the Filer to consolidate the prospectus of the other funds with the Mackenzie Funds Prospectus and renew the prospectus of the other funds as part of the Mackenzie Funds Pro Forma Prospectus.

9The Filer intended to include the Funds in their application for the Prior Relief to similarly facilitate the consolidation of the Prospectus of the Funds with the Mackenzie Funds Prospectus in order to streamline disclosure across the Filer’s fund platform and reduce prospectus renewal, printing and related costs. However, due to an administrative error, the Funds were not included as part of the Filer’s application for such exemption. In the absence of renewing the Prospectus of the Funds in accordance with the timelines stipulated for the renewal of a prospectus under the Legislation, and in the absence of a decision extending the Lapse Date of the Prospectus of the Funds, the distribution of securities of each of the Funds was required to cease on the Lapse Date.

10While one of the Funds had $0 in gross sales from the Lapse Date to the date of this decision (the Interim Period), the other Fund had $3200 in gross sales during the Interim Period in a prospectused series that is only eligible for high net worth investors.

11If the Exemption Sought is not granted, it would be necessary to prepare and file a preliminary prospectus in respect of the Funds in order to re-qualify the distribution of the Funds’ securities and consolidate that filing with the Mackenzie Funds Prospectus in order to facilitate the distribution of the Funds in the Jurisdictions under the same prospectus.

12It would be impractical to file a preliminary prospectus for the Funds and more efficient to grant the Exemption Sought in order to enable the Funds to continue the distribution of their securities under the Mackenzie Funds Pro Forma Prospectus, in respect of which a final prospectus (the Final Prospectus) is expected to be filed and a receipt issued.

13There have been no material changes in the affairs of the Funds since the date of the Prospectus. Accordingly, the Prospectus of the Funds represents current information regarding the Funds.

14Given the disclosure obligations of the Funds, should a material change in the affairs of any of the Funds occur, such change will be disclosed in an amendment to the Prospectus or incorporated in the Final Prospectus of the Mackenzie Funds Pro Forma Prospectus, as required under the Legislation.

15New investors of the Funds will receive delivery of the most recently filed fund facts document(s) of the applicable Fund(s). The Prospectus will still be available upon request.

16The Exemption Sought will not affect the accuracy of the information contained in the Prospectus or the Mackenzie Funds Prospectus and therefore 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 principal regulator under the Legislation is that the Exemption Sought is granted, provided that:

(a) Every securityholder of record of the Funds who purchased securities of the Funds in any Jurisdiction in the Interim Period (each, an Affected Securityholder) is provided with the right

i. to cancel (Cancellation Right) such trades within 90 days of the receipt of a statement (the Statement of Rights) describing the Cancellation Right, which is to be mailed by the Filer to the Affected Securityholder, and

ii. to receive, upon the exercise of a Cancellation Right the purchase price paid on the acquisition of such securities and all fees and expenses incurred in effecting such purchase;

(b) The Filer mails the Statement of Rights and a copy of this decision document to each Affected Securityholder no later than 10 days after the date of this decision; and

(c) If the net asset value per security of the relevant Fund on the date that an Affected Securityolder exercises the Cancellation Right is less than the price per security paid by the Affected Securityholder at the time of purchase, the Filer shall reimburse the difference to the Fund.