Ontario Securities Commission
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 PICTON MAHONEY ASSET MANAGEMENT (the Filer)
AND
PICTON MAHONEY FORTIFIED ARBITRAGE ALTERNATIVE FUND
PICTON MAHONEY FORTIFIED ARBITRAGE PLUS ALTERNATIVE FUND
(collectively, 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 limits for the renewal of the simplified prospectus of the Funds dated January 24, 2022 be extended to those time limits that would apply as if the lapse date was April 20, 2023 (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 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 (together with Ontario, the 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 head office of the Filer is located in Toronto, Ontario. The Filer is a general partnership governed under the laws of the Province of Ontario.
The Filer is registered as an investment fund manager in Ontario, Quebec and Newfoundland and Labrador, a portfolio manager in Alberta, British Columbia, Manitoba, Ontario, Prince Edward Island, Quebec and Saskatchewan, an exempt market dealer in Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Ontario, Prince Edward Island, Quebec and Saskatchewan, and a commodity trading manager in Ontario.
Each of the Funds and each of the funds listed in Schedule A (the Other Funds) is a reporting issuer in the Jurisdictions.
Neither the Filer nor the Funds are in default of securities legislation in any of the Jurisdictions.
The Filer is the manager and trustee of the Funds and the Other Funds.
Each of the Funds currently distributes its securities in the Jurisdictions pursuant to a simplified prospectus and annual information form dated January 24, 2022 (collectively, the Current Prospectus). Each of the Other Funds currently distributes its securities in the Jurisdictions pursuant to a simplified prospectus and annual information form dated April 20, 2022.
The lapse date of the Current Prospectus under the Legislation is January 24, 2023 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of securities 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 after the Current Lapse Date.
The lapse date of the current prospectus of the Other Funds under the Legislation is April 20, 2023.
The Filer wishes to combine the Current Prospectus with the current prospectus of the Other Funds in order to reduce renewal, printing and related costs of the Funds and the Other Funds. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of the Funds in the Jurisdictions under the same simplified prospectus and enable the Filer to streamline disclosure across the Filer’s fund platform. As the Funds and the Other Funds are managed by the Filer, offering them under the same simplified prospectus would allow investors to more easily compare the features of the Funds and the Other Funds.
It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the simplified prospectus and fund facts documents (together, the Prospectus Documents) of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the Prospectus Documents of the Other Funds can be filed earlier with the Prospectus Documents of the Funds.
The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds’ Prospectus Documents in March or April 2023. The ability to file the Prospectus Documents of the Funds with those of the Other Funds will ensure that the Filer can make the operational and administrative features of the Funds and the Other Funds consistent with each other, if necessary.
There have been no material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus and the current fund facts documents represent the current information of the Funds.
Given the disclosure obligation of the Funds, should any material changes occur, the Current Prospectus and the current fund facts document(s) of the applicable Funds will be amended as required under the Legislation.
New investors of the Funds will receive delivery of the most recently filed fund facts document(s) of the applicable Fund(s). The Current Prospectus will still be available upon request.
The Requested Relief will not affect the accuracy of the information contained in the Current Prospectus or fund facts documents of the Funds 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 Requested Relief is granted.
“Darren McKall”
Darren McKall
Manager, Investment Funds and Structured Products
Ontario Securities Commission
Application #2022/0534
SCHEDULE A
THE OTHER FUNDS
Picton Mahoney Fortified Active Extension Alternative Fund
Picton Mahoney Fortified Market Neutral Alternative Fund
Picton Mahoney Fortified Multi-Strategy Alternative Fund
Picton Mahoney Fortified Income Alternative Fund
Picton Mahoney Fortified Long Short Alternative Fund
Picton Mahoney Fortified Special Situations Alternative Fund
Picton Mahoney Fortified Alpha Alternative Fund