July 4, 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
1832 ASSET MANAGEMENT L.P.
(the Filer)
AND
DYNAMIC CREDIT ABSOLUTE RETURN FUND
DYNAMIC CREDIT OPPORTUNITIES 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 limits for the renewal of the simplified prospectus of the Funds dated September 7, 2023, as amended by amendment no. 1 dated October 20, 2023 (the Funds’ Prospectus) be extended to those time limits that would be applicable as if the lapse date of the Funds’ Prospectus was October 16, 2024 (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 the Jurisdiction, 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 Filer is an Ontario limited partnership, which is wholly-owned by the Bank of Nova Scotia (BNS). The general partner of the Filer is 1832 Asset Management G.P. Inc., an Ontario corporation wholly-owned by BNS with its head office located in Toronto, Ontario.
The Filer is registered as (i) a portfolio manager in all of the provinces of Canada and in the Northwest Territories and the Yukon; (ii) an exempt market dealer in all of the provinces of Canada (except Prince Edward Island and Saskatchewan); (iii) an investment fund manager in Ontario, Québec, Newfoundland and Labrador and the Northwest Territories; and (iv) a commodity trading manager in Ontario.
The Filer is the investment fund manager of each of the Funds.
The Funds are alternative mutual funds for the purposes of National Instrument 81-102 Investment Funds established as a trust under the laws of the Jurisdiction.
Each Fund is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
Neither the Filer nor any of the Funds is in default of securities legislation in any of the Jurisdictions.
Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the Funds’ Prospectus is September 7, 2024 (the Current Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Funds would have to cease on the Current Lapse Date unless: (i) the Funds file a pro forma prospectus at least 30 days prior to the Current Lapse Date; (ii) the final prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days of the Current Lapse Date.
The Filer is the investment fund manager of 6 other alternative mutual funds (the Other Funds) that currently distribute their securities to the public under a simplified prospectus that has a lapse date of October 16, 2024 (the Other Funds’ Prospectus).
The Filer wishes to combine the Funds’ Prospectus with the Other Funds’ Prospectus in order to reduce renewal, printing and related costs. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of such funds in the Jurisdictions under the same 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 and are part of the same fund family, offering them under the same prospectus will allow investors to more easily compare their features.
It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal of the Other Funds’ Prospectus, and unreasonable to incur the costs and expenses associated therewith, so that it can be filed early to align with the renewal of the Funds’ Prospectus.
The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds’ Prospectus. The ability to file the simplified prospectus 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.
If the Exemption Sought is not granted, it will be necessary to file the Funds’ Prospectus twice within a short period of time in order to consolidate the Funds’ Prospectus with the Other Funds’ Prospectus.
There have been no material changes in the affairs of the Funds since the date of the Funds’ Prospectus, other than those for which amendments have been filed. Accordingly, the Funds’ Prospectus represents current information regarding the Funds.
Given the disclosure obligations of the Filer and the Funds, should any material change in the business, operations or affairs of the Funds occur, the Funds’ Prospectus will be amended as required under the Legislation.
New investors in the Funds will receive delivery of the most recently filed fund facts of the Fund. The Funds’ Prospectus will remain available to investors upon request.
The Exemption Sought will not affect the accuracy of the information contained in the Funds’ Prospectus and will therefore 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.
“Darren McKall”
Darren McKall
Manager, Investment Management
Ontario Securities Commission
Application #2024/0366
SEDAR+ Project #6146605