May 15, 2026
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
EHP FUNDS INC.
(the Filer)
AND
IN THE MATTER OF
EHP SELECT ALTERNATIVE FUND
(the Top Fund)
DECISION
Background
The principal regulator in the Jurisdiction has received an application (the Application) from the Filer on behalf of the Top Fund for a decision under the securities legislation (Legislation) of the Jurisdiction revoking and replacing (the Revocation and Replacement) the Current Decision (as defined below), granting an exemption from paragraph 2.5(2)(b) of National Instrument 81-102 - Investment Funds (NI 81-102) to: (i) redesignate EHP Select Alternative Fund (formerly designated as an “Underlying Fund” under the Current Decision) as the Top Fund; (ii) remove EHP Foundation Alternative Fund as an Underlying Fund under the Current Decision; and (iii) permit the Top Fund to hold securities of EHP Alpha Strategies Alternative Fund (formerly, EHP Advantage Alternative Fund) (the Underlying Fund), which Underlying Fund in turn will hold more than 10% of its net asset value (NAV) in securities of one or more investment funds (the Third Tier Funds and, each, a Third Tier Fund) (each, a Three-Tier Structure) (the Exemption Sought). The Third Tier Funds may be comprised of: (i) one or more other mutual funds, each of which is, or will be, subject to NI 81-102 and managed by the Filer or an affiliate thereof (each, an EHP Third Tier Fund, and, together with the Top Fund and the Underlying Fund, the Funds and, each, a Fund); and (ii) one or more other investment funds (the Other Funds and, each, an Other Fund).
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 Jurisdictions).
Defined Terms
Unless expressly defined herein, terms in this decision have the respective meanings given to them in NI 81‑102, National Instrument 14‑101 - Definitions or MI 11‑102.
Current Decision means In the Matter of EHP Funds Inc. and In the Matter of EHP Global Multi-Strategy Alternative Fund dated October 31, 2024.
Representations
This 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, with its head office located in Toronto, Ontario.
The Filer is registered as an investment fund manager in Ontario, Québec, and Newfoundland and Labrador and as a portfolio manager in Ontario.
The Filer or an affiliate is, or will be, the investment fund manager of the Top Fund, the Underlying Fund, and each EHP Third Tier Fund.
The Filer is not in default of securities legislation in any of the Jurisdictions.
The Funds
Each Fund is, or will be, an “alternative mutual fund” organized and governed by the laws of a Jurisdiction or the laws of Canada.
Each Fund is, or will be, a reporting issuer in one or more Jurisdictions governed by the provisions of NI 81-102, subject to any exemption therefrom that has been, or may be, granted by the securities regulatory authorities.
The securities of the Underlying Fund and the EHP Third Tier Funds may be sold to investors other than the Top Fund and Underlying Fund, respectively.
None of the Funds is in default of securities legislation in any of the Jurisdictions.
The Top Fund
The investment objective of the Top Fund is to generate superior risk adjusted investment returns over the long‐term by utilizing a multi‐strategy approach consisting of diversified quantitative, systematic and discretionary investment strategies.
The Top Fund currently seeks to achieve its investment objective by investing in securities of alternative mutual funds managed or advised by the Manager, including the Underlying Fund, which in turn will use alternative investment strategies including equity long/short, equity market neutral and credit long/short, by investing in equities, fixed-income exchange-traded funds (ETFs), equity ETFs, commodity ETFs and futures derivative contracts as a part of implementing these strategies.
The Top Fund wishes to have the ability to purchase securities of the Underlying Fund, which will hold more than 10% of its NAV in securities of the Third Tier Funds, as described below.
The Top Fund will not sell short securities of the Underlying Fund.
EHP Global Multi-Strategy Alternative Fund, formerly designated as the “Top Fund” under the Current Decision, was terminated effective December 9, 2025 and thereupon ceased to be a reporting issuer.
The Underlying Fund
The investment objective of EHP Alpha Strategies Alternative Fund is to generate superior risk adjusted investment returns over the long-term by utilizing a multi-strategy approach consisting of diversified quantitative and systematic investment strategies. EHP Alpha Strategies Alternative Fund will use alternative investment strategies, including equity long/short, equity market neutral, and credit long/short, by investing in North American equities, fixed-income ETFs, equity ETFs, and treasury futures derivative contracts as a part of implementing these strategies.
The Underlying Fund may invest in securities of Other Funds, including the EHP Third Tier Funds and ETFs, in accordance with its investment objective.
The Underlying Fund currently invests in one or more Other Funds, where, at the time of purchase, the Underlying Fund holds, in aggregate, more than 10% of its NAV in securities of such Other Funds, which excludes, for greater certainty, index participation units.
The Underlying Fund invests in one or more EHP Third Tier Funds for tactical purposes, which investments will, when aggregated with securities of Other Funds held by the Underlying Fund (excluding index participation units), immediately after purchase, comprise, in aggregate, up to 30% of the NAV of the Underlying Fund.
As a result of market movement, Third Tier Funds may comprise more than 30% of the NAV of the Underlying Fund at any time.
The Underlying Fund will not sell short securities of a Third Tier Fund, excluding index participation units.
EHP Foundation Alternative Fund, formerly designated as an Underlying Fund under the Current Decision, was terminated effective December 9, 2025 and thereupon ceased to be a reporting issuer.
General
Subsection 2.5(2)(b) of NI 81-102 prohibits an investment fund from investing in another investment fund if, at the time of purchase, the other investment fund has more than 10% of its net assets invested in securities of other investment funds (the Multi-Tier Prohibition).
Since the Underlying Fund's investment in securities of the Third Tier Funds may, from time to time, exceed 10% of the NAV of the Underlying Fund, the Multi-Tier Prohibition will prohibit the Top Fund from investing in the Underlying Fund.
An investment by the Top Fund in the Underlying Fund would not qualify for the exemptions in paragraph 2.5(4) of NI 81-102 from the Multi-Tier Prohibition because the Underlying Fund does not issue index participation units and is not a clone fund or money market fund.
An investment in the Underlying Fund by the Top Fund is an efficient and cost-effective alternative to administering one or more investment strategies directly.
An investment by the Top Fund in the Underlying Fund or by the Underlying Fund in a Third Tier Fund represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Top Fund or the Underlying Fund, as the case may be.
The Other Funds are managed by investment fund managers other than the Filer and its affiliates. Neither the Filer nor its affiliates manage any Other Funds.
There will be no duplication of management fees or incentive fees between the Top Fund and the Underlying Fund, and between the Underlying Fund and the EHP Third Tier Funds. The prospectus of the Top Fund and the Underlying Fund will disclose that management fees and incentive fees will not be duplicated amongst such Funds as a result of a Three-Tier Structure.
Three-Tier Structure
The Filer will foster standards of fairness in the allocation of orders policy, the purpose of which is to seek the fair treatment for investors in all investment funds managed by the Filer that are involved in a fund of fund structure by assessing material costs between funds that pertain to transaction charges. This policy is designed to isolate material and/or excessive transaction costs associated with significant trades, at the Filer’s discretion, and to prevent the dilution of a fund's assets when these material transactions occur by taking steps to ensure that the applicable fund or funds bear(s) the appropriate economic impact of such transaction costs.
The Filer will implement a liquidity risk management policy, the purpose of which is to monitor underlying liquidity of investment funds managed by the Filer, with each such investment fund potentially considered a large unitholder investment. This policy seeks to ensure that unitholders are not adversely impacted by trading activities of large unitholders.
To manage liquidity risk due to cross-ownership of funds within a Three-Tier Structure, the Filer will use a combination of risk management tools to address the significant investor risk, including: (i) Independent Review Committee (or IRC) approved governance policies that have been adopted to protect all investors in the Funds; (ii) internal portfolio manager notification requirements of significant cash flows into the Funds; (iii) ongoing liquidity monitoring of each Fund’s portfolio; and (iv) real time cash projection reporting for the Funds. Each Fund in a Three-Tier Structure will be managed as a stand-alone investment for purposes of the application of these risk management tools.
The prospectus of the Top Fund discloses or will disclose in the next regularly scheduled renewal, or amendment if earlier, that the Top Fund invests in securities of the Underlying Fund, and that the Underlying Fund may invest more than 10% of its NAV in securities, on an aggregate basis, of other investment funds, including Third Tier Funds.
The prospectus of each Fund in a Three-Tier Structure discloses or will disclose in the next regularly scheduled renewal, or amendment if earlier, that the accountability for portfolio management is: (a) at the level of the Underlying Fund with respect to the selection of Third Tier Funds to be purchased by the Underlying Fund and with respect to the purchase and sale of any other portfolio securities or other assets held by the Underlying Fund; and (b) at the level of each EHP Third Tier Fund with respect to the purchase and sale of portfolio securities and other assets held by that EHP Third Tier Fund.
Each Fund in a Three-Tier Structure complies with the requirements under National Instrument 81-106 – Investment Fund Continuous Disclosure (NI 81-106) relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 - Contents of Fund Facts Document (Form 81-101F3) relating to top 10 position portfolio holdings disclosure in its Fund Facts as if the Fund was investing directly in the Third Tier Funds.
None of the Funds relies on any discretionary relief permitting the Fund to exceed the leverage exposure otherwise permitted under NI 81-102 through the use of borrowing, short selling, and specified derivatives.
Except for paragraph 2.5(2)(b) of NI 81-102, each investment by the Top Fund in securities of the Underlying Fund will be made in accordance with the provisions of section 2.5 of NI 81-102.
It would not be prejudicial to the public interest to grant the Exemption Sought.
As of the date of this decision, the Current Decision will be revoked and replaced with this decision.
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 Revocation and Replacement is granted and the Exemption Sought is granted provided that: