March 12, 2024
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 NORTHWEST & ETHICAL INVESTMENTS L.P.
(the Filer)
AND
NEI LONG SHORT EQUITY FUND
(the Existing Alternative Fund)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Existing Alternative Fund and any alternative mutual fund established or restructured in the future and managed by the Filer or an affiliate of the Filer (collectively with the Existing Alternative Fund, the Alternative Funds), for a decision under the securities legislation of the principal regulator that grants relief to the Alternative Funds from the requirement in subsection 5.1(4) of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) that states that a simplified prospectus (SP) for an alternative mutual fund must not be consolidated with an SP of another mutual fund if the other mutual fund is not an alternative mutual fund to permit consolidation of the SP of one or more of the Alternative Funds with the SP of one or more of the funds existing today listed in Schedule A or created in the future that (i) are reporting issuers to which NI 81-101 and National Instrument 81-102 Investment Funds (NI 81-102) apply, (ii) are not alternative mutual funds, and (iii) are managed by the Filer or an affiliate of the Filer (collectively, the Conventional Funds and together with the Alternative Funds, the Funds) (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 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 Canadian Jurisdictions).
Interpretation
Unless otherwise defined, terms in this decision have the respective meanings given to them in NI 81-101, NI 81-102, National Instrument 14-101 Definitions, and MI 11-102.
Representations
The decision is based on the following facts represented by the Filer:
The Filer
The Filer is a limited partnership formed under the laws of Ontario which acts through its general partner Northwest & Ethical Investments Inc., a corporation formed under the laws of Canada with its head office in Toronto, Ontario.
The Filer is registered as (i) a commodity trading manager in Ontario; (ii) a portfolio manager in British Columbia and Ontario; (iii) an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan; and (iv) an investment fund manager in British Columbia, Newfoundland and Labrador, Ontario and Québec.
The Filer, or an affiliate of the Filer, is or will be, the manager, portfolio advisor and/or trustee of each of the Funds.
Neither the Filer nor the Funds are in default of securities legislation in any of the Canadian Jurisdictions.
The Funds
The Alternative Funds are, or will be, established under the laws of Ontario or Canada as a mutual fund that is a trust or a class of shares of a mutual fund corporation and is, or will be, a reporting issuer in one or more of the Canadian Jurisdictions.
The Conventional Funds are not, or will not be, an alternative mutual fund.
The securities of the Funds are, or will be, qualified for distribution in one or more of the Canadian Jurisdictions using an SP, as applicable, and fund facts documents prepared and filed in accordance with the securities legislation of such Canadian Jurisdictions.
Each Fund is, or will be, a mutual fund to which the requirements of NI 81-101 and NI 81-102 apply, subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities.
Reasons for the Exemption Sought
The Filer wishes to combine the SPs of the Alternative Funds with the SP of the Conventional Funds in order to reduce renewal, printing and related costs of the SPs.
Even though the Alternative Funds are, or will be, alternative mutual funds, they share, or will share, many common operational and administrative features with the Conventional Mutual Funds. Combining the Funds in the same SP will allow investors to more easily compare the features of the Alternative Funds and the Conventional Funds and will streamline disclosure across the Filer’s fund platform.
Filing the same SP for the Alternative Funds and the Conventional Funds will ensure that the Filer can make corresponding changes to the operational and administrative features of Alternative Funds and the Conventional Funds in a consistent manner, if required.
The fund facts document of the Funds will continue to be provided to investors when purchasing securities of the Funds as required by applicable securities legislation. The form and content of the fund facts documents of the Funds will not change as a result of the Exemption Sought.
The SP of the Funds will continue to be provided to investors, upon request, as required by applicable securities legislation.
National Instrument 41-101 General Prospectus Requirements (NI 41-101) does not contain a provision equivalent to subsection 5.1(4) of NI 81-101. Accordingly, an investment fund manager that manages exchange-traded funds (ETFs) is permitted to consolidate a prospectus under NI 41-101 for its ETFs that are alternative mutual funds with a prospectus for its ETFs that are conventional mutual funds. The Filer submits that there is no reason why mutual funds filing a prospectus under NI 81-101 should be treated differently from ETFs filing a prospectus under NI 41-101.
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.
“Darren McKall”
Darren McKall
Manager, Investment Funds and Structured Products
Ontario Securities Commission
Application #2024/0100
SEDAR+ Filing #6092280
Schedule A
LIST OF CONVENTIONAL FUNDS
1NEI Money Market Fund
2NEI Canadian Bond Fund
3NEI Canadian Impact Bond Fund
4NEI Global Impact Bond Fund
5NEI Global Total Return Bond Fund
6NEI Global High Yield Bond Fund
7NEI Conservative Yield Portfolio
8NEI Balanced Yield Portfolio
9NEI Global Sustainable Balanced Fund
10NEI Growth & Income Fund
11NEI Canadian Dividend Fund
12NEI Canadian Equity RS Fund
13NEI Canadian Equity Fund
14NEI ESG Canadian Enhanced Index Fund
15NEI U.S. Dividend Fund
16NEI U.S. Equity RS Fund
17NEI Canadian Small Cap Equity RS Fund
18NEI Canadian Small Cap Equity Fund
19NEI Global Dividend RS Fund
20NEI Global Value Fund
21NEI Global Equity RS Fund
22NEI Global Growth Fund
23NEI Environmental Leaders Fund
24NEI Clean Infrastructure Fund
25NEI International Equity RS Fund
26NEI Emerging Markets Fund
27NEI Select Income RS Portfolio
28NEI Select Income & Growth RS Portfolio
29NEI Select Balanced RS Portfolio
30NEI Select Growth & Income RS Portfolio
31NEI Select Growth RS Portfolio
32NEI Select Maximum Growth RS Portfolio
33NEI Impact Conservative Portfolio
34NEI Impact Balanced Portfolio
35NEI Impact Growth Portfolio
36NEI Income Private Portfolio
37NEI Income & Growth Private Portfolio
38NEI Balanced Private Portfolio
39NEI Growth Private Portfolio
40NEI Fixed Income Pool
41NEI Canadian Equity Pool
42NEI Global Equity Pool
43NEI Managed Asset Allocation Pool