March 8, 2024

(THE JURISDICTION)

AND

(THE FILER)

AND

(THE INITIAL TOP FUND)

Background

The principal regulator of the Jurisdiction has received an application from the Filer and its affiliates on behalf of the Initial Top Fund and any other existing or future mutual fund that is not and will not be a reporting issuer, that is or will be organized under the laws of the Province of Ontario or another jurisdiction of Canada, and that is or will be managed by the Filer and invests or will invest in underlying funds or other collective investment vehicles as part of its investment strategy (the Future Top Funds and together with the Initial Top Fund, the Top Funds), for a decision under the securities legislation of the Jurisdiction (the Legislation) exempting the Filer and the Top Funds from:

(a) the requirement in section 2.2 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) that the Top Funds file their audited annual financial statements and auditor’s report on or before the 90th day after the Top Funds’ most recently completed financial year (the Annual Filing Deadline);

(b) the requirement in paragraph 5.1(2)(a) of NI 81-106 that the Top Funds deliver to securityholders their audited annual financial statements and auditor’s report by the Annual Filing Deadline (the Annual Delivery Requirement);

(c) the requirement in section 2.4 of NI 81-106 that the Top Funds file their interim financial report on or before the 60th day after the Top Funds’ most recently completed interim period (the Interim Filing Deadline); and

(d) the requirement in paragraph 5.1(2)(b) of NI 81-106 that the Top Funds deliver to securityholders their interim financial report by the Interim Filing Deadline (the Interim Delivery Requirement);

(collectively, the Exemption Sought).

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

(a) the Ontario Securities Commission is the principal regulator for the 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 Canadian Jurisdictions).

Definitions

Unless expressly defined herein, terms used have the respective meanings given to them in MI 11-102, National Instrument 14-101 Definitions, National Instrument 81-102 Investment Funds and NI 81-106.

Representations

The decision is based on the following facts represented by the Filer:

The Filer

The Filer is a corporation incorporated under the laws of the Province of Ontario. The Filer’s head office is located in Toronto, Ontario.
The Filer is registered as an investment fund manager (IFM) in each of Ontario, Québec and Newfoundland and Labrador, as a portfolio manager in each of the Canadian Jurisdictions, as a commodity trading manager in Ontario, and as a derivatives portfolio manager in Québec.
The Filer or an affiliate is or will be the IFM and portfolio manager of the Top Funds.
The Filer and its affiliates are not in default of securities legislation in any of the Canadian Jurisdictions.

The Top Funds

The Initial Top Fund is a trust formed under the laws of the Province of Ontario. Each Future Top Fund will be formed as a trust or limited partnership under the laws of the Province of Ontario or another Canadian Jurisdiction.
The Initial Top Fund is, and each Future Top Fund will be a “mutual fund” for purposes of the securities legislation of the Canadian Jurisdictions.
Securities of the Initial Top Fund are, and securities of the Future Top Funds will be, offered for sale only to qualified investors in provinces and territories of Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions or other available exemptions.
None of the existing Top Funds is in default of the securities legislation in any of the Canadian Jurisdictions.
None of the Top Funds is, or will be, a reporting issuer in any of the Canadian Jurisdictions.
Each Top Fund has, or will have a financial year-end of December 31.
Each of the Top Funds’ investment objective will require the Top Funds to invest primarily in private asset classes.
Each of the Top Funds will seek to achieve its investment objective by investing in securities of one or more underlying investment funds or other collective investment vehicles (each, an Underlying Fund), either directly or through another Underlying Fund (each, a Master Fund) managed by an independent manager or by the Filer or an affiliate of the Filer (the Filer, together with its affiliates, CIBC).
The Underlying Funds will be managed by independent managers, except for certain Master Funds which will be managed by CIBC (each, a CIBC Master Fund) and will invest in Underlying Funds managed by independent managers.
The Filer believes that the Top Funds’ investment in the Underlying Funds offers benefits not available through a direct investment in the companies, other issuers or assets held by the Underlying Funds.
Securities of the Top Funds typically will be redeemable at various intervals, as will securities of certain Underlying Funds, but securities of other Underlying Funds will not be redeemable until the termination of such Underlying Funds. As each Top Fund will have a medium to long-term investment horizon, each Top Fund will be able to manage its own liquidity requirements taking into consideration the frequency at which securities of the Underlying Funds may be redeemed.
The net asset value of each Top Fund will be calculated on a monthly basis and securityholders of each Top Fund will be provided with the net asset value of the Top Fund on a monthly basis.
Certain holdings of each Top Fund may be disclosed in the Top Fund’s annual financial statements and interim financial reports.

Financial Statement Filing and Delivery Requirements

Generally, section 2.2 and paragraph 5.1(2)(a) of NI 81-106 require a Top Fund to file and deliver its audited annual financial statements and auditor’s report by the Annual Filing Deadline. As the Initial Top Fund’s financial year-end is December 31, the Initial Top Fund has a filing and delivery deadline of March 30 or March 31 (depending on the year).
Generally, section 2.4 and paragraph 5.1(2)(b) of NI 81-106 require a Top Fund to file and deliver its interim financial reports by the Interim Filing Deadline. As the Initial Top Fund’s interim period-end is June 30, the Initial Top Fund has an interim filing and delivery deadline of August 29.
Section 2.11 of NI 81-106 provides an exemption from the filing requirements of the audited annual financial statements and auditor’s report, and interim financial reports if, among other things, the Top Fund delivers such statements and reports in accordance with Part 5 of NI 81-106 by the Annual Filing Deadline and Interim Filing Deadline, as applicable.
In order to formulate an opinion on the financial statements of each Top Fund, the Top Fund’s auditor or the CIBC Master Fund’s auditor requires audited annual financial statements of the respective Underlying Funds in order to audit the information contained in the Top Fund’s annual financial statements. The auditors of the Top Funds have advised the Filer that they will be unable to complete the audit of each Top Fund’s annual financial statements until the audited financial statements of a certain percentage of the Underlying Funds are completed and available to the respective Top Fund and/or CIBC Master Fund, as applicable.
The Underlying Funds may be domiciled in Canada, the United States or other international jurisdictions.
The Underlying Funds may have varying financial year-ends and may be subject to a variety of financial reporting deadlines.
In most cases, the Top Funds and/or the CIBC Master Funds will not be able to obtain the audited annual financial statements and auditor’s reports, and interim financial reports of the Underlying Funds sooner than the deadline for filing such statements and reports of the Underlying Funds and, in all cases, no sooner than other securityholders of the Underlying Funds receive the financial statements and reports of the Underlying Funds. As a result, the Top Funds will not be able to meet the Annual Filing Deadline and Annual Delivery Requirement and the Interim Filing Deadline and Interim Delivery Requirement. The Filer expects this timing delay in the completion of its audited annual financial statements and unaudited interim financial reports of each Top Fund to occur every year for the foreseeable future.
The offering memorandum of each Top Fund provided to prospective investors will disclose, or such investors will be otherwise notified, that: (i) audited annual financial statements and auditor’s reports for such Top Fund would be delivered to each investor within 180 days of such Top Fund’s financial year end; and (ii) unaudited interim financial reports for such Top Fund would be delivered to each investor within 120 days following the end of each interim period of such Top Fund.
The Filer will notify securityholders of the Top Funds that it has received and intends to rely on relief from the Annual Filing Deadline and Annual Delivery Requirement and the Interim Filing Deadline and the Interim Delivery Requirement.
Each Top Fund therefore seeks an extension of the Annual Filing Deadline and Annual Delivery Requirement to permit delivery within 180 days of such Top Fund’s year-end, to enable the Top Fund’s auditors to first receive the audited annual financial statements and auditor’s reports of the relevant Underlying Funds so as to be able to prepare such Top Fund’s audited annual financial statements and auditor’s report.
Each Top Fund therefore seeks an extension of the Interim Filing Deadline and Interim Delivery Requirement to permit delivery within 120 days of such Top Fund’s most recently completed interim period, to enable the Top Fund to first receive the interim financial reports of the relevant Underlying Funds so as to be able to determine the net asset value of the relevant Underlying Funds and prepare such Top Fund’s interim financial reports.

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 for so long as:

(a) The Top Fund has a financial year ending December 31.

(b) The Top Fund’s investment strategy is to invest the Top Fund’s investable assets in Underlying Funds which share the Top Fund’s investment objective.

(d) No less than 25% of the total assets of the Top Fund at the time the Top Fund makes the initial investment decision in the Underlying Fund(s), are invested in investment entities that have financial reporting periods that end on the Top Fund’s financial year end and are subject to the requirement that their annual financial statements be delivered within 120 days of their financial year ends and interim financial statements between 60 and 90 days of their most recent interim period.

(e) The offering memorandum provided to prospective investors regarding the Top Fund discloses that (i) audited annual financial statements and auditor’s reports for the Top Fund will be filed and delivered within 180 days of its financial year-end; and (ii) interim financial reports for the Top Fund will be filed and delivered within 120 days of its interim period-end, subject to regulatory approval.

(f) The Top Fund notifies its securityholders that the Top Fund has received and intends to rely on relief from the filing and delivery requirements under section 2.2, section 2.4, paragraph 5.1(2)(a) and paragraph 5.1(2)(b) of NI 81-106.

(g) The Top Fund is not a reporting issuer and the Filer is a corporation incorporated under the laws of the Province of Ontario and has the necessary registrations to carry out its operations in each of the Canadian Jurisdictions in which it operates.

(h) The conditions in section 2.11 of NI 81-106 will be met, except for subsection 2.11(b), and:

(i) the audited annual financial statements and auditor’s report will be delivered to securityholders of the Top Fund in accordance with Part 5 of NI 81-106 on or before the 180^th^ day after the Top Fund’s most recently completed financial year; and

(ii) the interim financial reports will be delivered to securityholders of the Top Fund in accordance with Part 5 of NI 81-106 on or before the 120^th^ day after the Top Fund’s most recently completed interim period.

(i) This order terminates within one year of the coming into force of any amendment to NI 81-106 or other rule that modifies how the Annual Filing Deadline, Annual Delivery Requirement, Interim Filing Deadline or Interim Delivery Requirement applies in connection with mutual funds.

“Darren McKall”

Darren McKall

Manager, Investment Funds and Structured Products Branch

Ontario Securities Commission

Application # 2024/0030

SEDAR Project # 6073793

In the Matter of CIBC Asset Management Inc., 2024 CanLII 18149

Case Summary