Unofficial consolidation for financial years beginning on or after January 1, 2014

 

                                                   NATIONAL INSTRUMENT 81-106

          INVESTMENT FUND CONTINUOUS DISCLOSURE

 Contents

PART 1 – DEFINITIONS AND APPLICATIONS

1.1     Definitions

1.2     Application

1.3     Interpretation

1.4     Language of Documents

 

PART 2 – FINANCIAL STATEMENTS

2.1     Comparative Annual Financial Statements and Auditor’s Report

2.2     Filing Deadline for Annual Financial Statements

2.3     Interim Financial Report

2.4     Filing Deadline for Interim Financial Report

2.5     Approval of Financial Statements

2.6     Acceptable Accounting Principles

2.7     Acceptable Auditing Standards

2.8     Acceptable Auditors

2.9     Change in Year End

2.10   Change in Legal Structure

2.11   Filing Exemption for Mutual Funds that are Non-Reporting Issuers

2.12   Disclosure of Auditor Review of Interim Financial Report

 

PART 3 – FINANCIAL DISCLOSURE REQUIREMENTS

3.1     Statement of Financial Position

3.2     Statement of Comprehensive Income

3.3     Statement of Changes in Financial Position

3.4     Statement of Cash Flows

3.5     Statement of Investment Portfolio

3.6     Notes to Financial Statements

3.7     Inapplicable Line Items

3.8     Disclosure of securities lending transactions

3.9     Disclosure of repurchase transactions

3.10   Disclosure of reverse repurchase transactions

3.11   Scholarship plans

3.12   Disclosure of Use of Leverage

 

PART 4 – MANAGEMENT REPORTS OF FUND PERFORMANCE

4.1     Application

4.2     Filing of management reports of fund performance

4.3     Filing of annual management report of fund performance for an investment fund that is a scholarship plan

4.4     Contents of management reports of fund performance

4.5     Approval of management reports of fund performance

 

PART 5 – DELIVERY OF FINANCIAL STATEMENTS AND MANAGEMENT REPORTS OF FUND PERFORMANCE

5.1     Delivery of certain continuous disclosure documents

5.2     Sending according to standing instructions

5.3     Sending According To Annual Instructions

5.4     General

5.5     Websites

 

PART 6 – QUARTERLY PORTFOLIO DISCLOSURE

6.1     Application

6.2     Preparation and dissemination

 

PART 7 – BINDING AND PRESENTATION

7.1     Binding of financial statements and management reports of fund performance

7.2     Multiple class investment funds

 

PART 8 – INDEPENDENT VALUATIONS FOR LABOUR SPONSORED OR VENTURE CAPITAL FUNDS

8.1     Application

8.2     Exemption from requirement to disclose individual current values for venture investments

8.3     Disclosure concerning independent valuator

8.4     Content of independent valuation

8.5     Independent valuator’s consent

 

PART 9 – ANNUAL INFORMATION FORM

9.1     Application

9.2     Requirement to file annual information form

9.3     Filing deadline for annual information form

9.4     Preparation and content of annual information form

 

PART 10 - PROXY VOTING DISCLOSURE FOR PORTFOLIO SECURITIES HELD

10.1   Application

10.2   Requirement to establish policies and procedures

10.3   Proxy voting record

10.4   Preparation and availability of proxy voting record

 

 

PART 11 – MATERIAL CHANGE REPORTS

11.1   Application

11.2   Publication of material change

 

PART 12 – PROXY SOLICITATION AND INFORMATION CIRCULARS

12.1   Applications

12.2   Sending of proxies and information circulars

12.2.1   Notice-and-access

12.2.2   Restricions on Information Gathering

12.2.3   Posting Materials on Non- SEDAR+ Website

12.2.4   Record Date for Notice of Meeting, Abridgement of Time and Notification of Meeting Date and Record Date

12.2.5   Consent to Other Delivery Methods

12.2.6   Instructions to Receive Paper Copies

12.2.7   Compliance with National Instrument 51-102 and National Instrument 54-101

12.3   Exemption

12.4   Compliance with National Instrument 51-102

 

PART 13 – CHANGE OF AUDITOR DISCLOSURE

13.1   Application

13.2   Change of auditor

 

PART 14 – CALCULATION OF NET ASSET VALUE

14.1   Application

14.2   Calculation, frequency and currency

14.3   Portfolio transactions.

14.4   Capital transactions

 

PART 15 – CALCULATION OF MANAGEMENT EXPENSE RATIO

15.1   Calculation of management expense ratio

15.2   Fund of funds calculation

 

PART 16 – ADDITIONAL FILING REQUIREMENTS

16.1   Application

16.2   Additional filing requirements

16.3   Voting results

16.4   Filing of material contracts

 

PART 16.1 - INVESTMENT FUND WEBSITE

16.1.1   Application

16.1.2   Requirement to Have a Designated Website

 

PART 17 – EXEMPTIONS

17.1 Exemption

 

PART 18 – EFFECTIVE DATE AND TRANSITION

18.1   Effective date

18.2   [Repealed]

18.3   [Repealed]

18.4   [Repealed]

18.5   [Repealed]

18.5.1   Transition to IFRS

18.5.2   Securities lending

18.6   Existing exemptions

 

FORM 81-106F1

 

 

 

 

 

 

 

Unofficial consolidation for financial years beginning on or after January 1, 2014

 

 

NATIONAL INSTRUMENT 81-106

          INVESTMENT FUND CONTINUOUS DISCLOSURE

 

 

PART 1 – DEFINITIONS AND APPLICATIONS

 

Definitions

1.1                               In this Instrument

 

“annual management report of fund performance” means a document prepared in accordance with Part B of Form 81-106F1;

 

“current value” means, for an asset held by, or a liability of, an investment fund, the value calculated in accordance with Canadian GAAP;

 

“designated rating” has the same meaning as in National Instrument 81-102 Investment Funds;

 

“designated website” means, in relation to an investment fund, a website designated by the fund under section 16.1.2;

 

“education savings plan” means an agreement between one or more persons and another person or organization, in which the other person or organization agrees to pay or cause to be paid, to or for one or more beneficiaries designated in connection with the agreement, scholarship awards;

 

“EVCC” means an employee venture capital corporation that does not have a restricted constitution, and is registered under Part 2 of the Employee Investment Act, R.S.B.C. 1996 c. 112, and whose business objective is making multiple investments;

 

“financial statements” includes interim financial reports;

 

“independent review committee” means the independent review committee of the investment fund established under National Instrument 81-107 Independent Review Committee for Investment Funds;

 

“independent valuation” means a valuation of the assets and liabilities, or of the venture investments, of a labour sponsored or venture capital fund that contains the opinion of an independent valuator as to the current value of the assets and liabilities, or of the venture investments, and that is prepared in accordance with Part 8;

 

“independent valuator” means a valuator that is independent of the labour sponsored or venture capital fund and that has appropriate qualifications;

 

“information circular” means a document prepared in accordance with Form 51- 102F5 Information Circular;

 

“interim management report of fund performance” means a document prepared in accordance with Part C of Form 81-106F1;

 

“interim period” means, in relation to an investment fund,

 

(a)    a period of at least three months that ends six months before the end of a financial year of the investment fund, or

 

(b) in the case of a transition year of the investment fund, a period commencing on the first day of the transition year and ending six months after the end of its old financial year;

 

“intermediary” has the same meaning as in section 1.1 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

 

“investment fund” means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an EVCC and a VCC;

 

“labour sponsored or venture capital fund” means an investment fund that is

 

(a)    a labour sponsored investment fund corporation or a labour sponsored venture capital corporation under provincial legislation,

 

(b)    a registered or prescribed labour sponsored venture capital corporation as defined in the ITA,

 

(c) an EVCC, or

 

(d) a VCC;

 

“management expense ratio” means the ratio, expressed as a percentage, of the expenses of an investment fund to its average net asset value, calculated in accordance with Part 15;

 

“management fees” means the total fees paid or payable by an investment fund to its manager or one or more portfolio advisers or sub-advisers, including incentive or performance fees, but excluding operating expenses of the investment fund;

 

“management report of fund performance” means an annual management report of fund performance or an interim management report of fund performance;

 

“material change” means, in relation to an investment fund,

 

(a) a change in the business, operations or affairs of the investment fund that would be considered important by a reasonable investor in determining whether to purchase or continue to hold securities of the investment fund, or

 

(b) a decision to implement a change referred to in paragraph (a) made

 

(i) by the board of directors of the investment fund or the board of directors of the manager of the investment fund or other persons acting in a similar capacity,

 

(ii) by senior management of the investment fund who believe that confirmation of the decision by the board of directors or such other persons acting in a similar capacity is probable, or

 

(iii) by senior management of the manager of the investment fund who believe that confirmation of the decision by the board of directors of the manager or such other persons acting in a similar capacity is probable;

 

“material contract” means, for an investment fund, a document that the investment fund would be required to list in a simplified prospectus under item 4.17 of Part A of Form 81-101F1 if the investment fund filed a simplified prospectus under National Instrument 81-101 Mutual Fund Prospectus Disclosure;

 

“meeting” means, except in sections 10.2, 10.3 and 16.3, a meeting of securityholders of an investment fund;

 

“mutual fund in the jurisdiction” means an incorporated or unincorporated mutual fund that is a reporting issuer in, or that is organized under the laws of, the local jurisdiction, but does not include a private mutual fund;

 

“National Instrument 51-102” means National Instrument 51-102 Continuous Disclosure Obligations;

 

“National Instrument 81-107” means National Instrument 81-107 Independent Review Committee for Investment Funds;

 

“net asset value” means the value of the total assets of the investment fund less the value of the total liabilities, other than net assets attributable to securityholders, of the investment fund, as at a specific date, determined in accordance with Part 14;

 

“NOBO” has the same meaning as in section 1.1 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

 

“non-redeemable investment fund” means an issuer,

 

(a) whose primary purpose is to invest money provided by its securityholders,

 

(b) that does not invest,

 

(i) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or

 

(ii) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

 

(c) that is not a mutual fund;

 

“notice-and-access” means the delivery procedures referred to in section 12.2.1;

 

“notification of meeting and record dates” has the same meaning as in section 1.1 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

 

“proximate intermediary” has the same meaning as in section 1.1 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

 

“proxy-related materials” means securityholder materials relating to a meeting that a person or company that solicits proxies is required under corporate law or securities legislation to send to a registered holder or beneficial owner of the securities of an investment fund;

 

“publicly accountable enterprise” means a publicly accountable enterprise as defined in the Handbook;

 

“quarterly portfolio disclosure” means the disclosure prepared in accordance with Part 6;

 

“scholarship award” means any amount, other than a refund of contributions, that is paid or payable directly or indirectly to further the education of a beneficiary designated under an education savings plan;

 

“scholarship plan” means an arrangement under which contributions to education savings plans are pooled to provide scholarship awards to designated beneficiaries;

 

“send” includes to deliver or forward, or arrange to deliver or forward, by any  means;

 

“statement of changes in financial position” means a statement of changes in equity or a statement of changes in net assets attributable to securityholders;

 

“stratification” means procedures whereby a paper copy of the information circular and, if applicable, the financial statements of the investment fund are included with the documents required to be sent in order to use notice-and-access under section 12.2.1;

 

“transition year” means the financial year of an investment fund in which a change of year end occurs;

 

“VCC” means a venture capital corporation registered under Part 1 of the Small Business Venture Capital Act, R.S.B.C. 1996 c. 429, whose business objective is making multiple investments; and

 

“venture investment” means an investment in a private company or an investment made in accordance with the requirements of provincial labour sponsored or venture capital fund legislation or the ITA.

 

Application

1.2(1)                   Except as otherwise provided in this Instrument, this Instrument applies to

 

(a) an investment fund that is a reporting issuer; and

 

(b) subject to subsection (2), a mutual fund in the jurisdiction.

 

1.2(2)                   Despite paragraph (1) (b), in Alberta, British Columbia, Manitoba and Newfoundland and Labrador, this Instrument does not apply to a mutual fund that is not a reporting issuer.

 

1.2(3)                   [Repealed]

 

1.2(4)                   In Québec, this Instrument does not apply to a reporting issuer organized under

 

(a) an Act to establish the Fonds de solidarité des travailleurs du Québec (F.T.Q.) R.S.Q., chapter F-3.2.1;

 

(b) an Act to establish Fondaction, le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l'emploi (R.S.Q., chapter F-3.1.2); or

 

(c) an Act constituting Capital régional et coopératif Desjardins, Loi constituant Capital régional et coopératif Desjardins (R.S.Q., chapter C-6.1).

 

Interpretation

1.3(1)                    Each section, part, class or series of a class of securities of an investment fund that is referable to a separate portfolio of assets is considered to be a separate investment fund for the purposes of this Instrument.

 

1.3(2)                    Unless defined in section 1.1 of this Instrument, terms defined in National Instrument 81-102 Investment Funds and used in this Instrument have the respective meanings ascribed to them in that Instrument.

 

1.3(3)                   Terms defined in National Instrument 81-105 Mutual Fund Sales Practices and used in this Instrument have the respective meanings ascribed to them in that Instrument except that references in those definitions to “mutual fund” must be read as references to “investment fund”.

 

Language of Documents

1.4(1)                   A document that is required to be filed under this Instrument must be prepared in French or English.

 

1.4(2)                   If an investment fund files a document in French or in English, and a translation of the document into the other language is sent to a securityholder, the investment fund must file the translated document not later than when it is sent to the securityholder.

 

1.4(3)                   In Québec, the linguistic obligations and rights prescribed by Québec law must be complied with.

 

 

PART 2 – FINANCIAL STATEMENTS

 

 

Comparative Annual Financial Statements and Auditor’s Report

2.1(1)                   An investment fund must file annual financial statements for the investment fund’s most recently completed financial year that include

 

(a) a statement of financial position as at the end of that financial year and a statement of financial position as at the end of the immediately preceding financial year;

 

(b) a statement of comprehensive income for that financial year and a statement of comprehensive income for the immediately preceding financial year;

 

(c) statement of changes in financial position for that financial year and a statement of changes in financial position for the immediately preceding financial year;

 

(d) for financial years beginning on or after January 1, 2014, a statement of cash flows for that financial year and a statement of cash flows for the immediately preceding financial year;

 

(e) a statement of investment portfolio as at the end of that financial year;

 

(f) a statement of financial position as at the beginning of the immediately preceding financial year if the investment fund discloses in its annual financial statements an unreserved statement of compliance with IFRS and the investment fund:

 

(i) applies an accounting policy retrospectively in its annual financial statements,

 

(ii) makes a retrospective restatement of items in its annual financial statements, or

 

(iii) reclassifies items in its annual financial statements; and

 

(g) notes to the annual financial statements.

 

2.1(2)                   Annual financial statements filed under subsection (1) must be accompanied by an auditor’s report.

 

Filing Deadline for Annual Financial Statements

2.2                       The annual financial statements and auditor’s report required to be filed under section 2.1 must be filed on or before the 90th day after the investment fund’s most recently completed financial year.

 

Interim Financial Report

2.3                       An investment fund must file an interim financial report for the investment fund’s most recently completed interim period that includes

 

(a) a statement of financial position as at the end of that interim period and a statement of financial position as at the end of the immediately preceding financial year;

 

(b) a statement of comprehensive income for that interim period and a statement of comprehensive income for the corresponding period in the immediately preceding financial year;

 

(c) a statement of changes in financial position for that interim period and a statement of changes in financial position for the corresponding period in the immediately preceding financial year;

 

(d) for financial years beginning on or after January 1, 2014, a statement of cash flows for that interim period and a statement of cash flows for the corresponding period in the immediately preceding financial year;

 

(e) a statement of investment portfolio as at the end of that interim period;

 

(f) a statement of financial position as at the beginning of the immediately preceding financial year if the investment fund discloses in its interim financial report an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting and the investment fund

 

(i) applies an accounting policy retrospectively in its interim financial report,

 

(ii) makes a retrospective restatement of items in its interim financial report, or

 

(iii) reclassifies items in its interim financial report; and

 

(g) notes to the interim financial report.

 

Filing Deadline for Interim Financial Report

2.4                       The interim financial report required to be filed under section 2.3 must be filed on or before the 60th day after the end of the most recent interim period of the investment fund.

 

Approval of Financial Statements

2.5(1)                   The board of directors of an investment fund that is a corporation must approve the financial statements of the investment fund before those financial statements are filed or made available to securityholders or potential purchasers of securities of the investment fund.

 

2.5(2)                   The trustee or trustees of an investment fund that is a trust, or another person or company authorized to do so by the constating documents of the investment fund, must approve the financial statements of the investment fund, before those financial statements are filed or made available to securityholders or potential purchasers of securities of the investment fund.

 

Acceptable Accounting Principles

2.6(1)                  For financial years beginning before January 1, 2014, the financial statements of an investment fund must be prepared in accordance with Canadian GAAP applicable to public enterprises.

 

2.6(2)                   For financial years beginning on or after January 1, 2014, the financial statements of an investment fund must be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises.

 

2.6(3)                   Financial statements must be prepared in accordance with the same accounting principles for all periods presented in the financial statements.

 

Acceptable Auditing Standards

2.7(1)                   Financial statements that are required to be audited must be audited in accordance with Canadian GAAS.

 

2.7(2)                   For financial years beginning before January 1, 2014, audited financial statements must be accompanied by an auditor’s report prepared in accordance with Canadian GAAS and the following requirements:

 

1. The auditor’s report must not contain a reservation or express a modified opinion.

 

2. The auditor’s report must identify all financial periods presented for which the auditor has issued an auditor’s report.

 

3. If the investment fund has changed its auditor and a comparative period presented in the financial statements was audited by a different auditor, the auditor’s report must refer to the former auditor’s report on the comparative period.

 

4. The auditor’s report must identify the auditing standards used to conduct the audit and the accounting principles used to prepare the   financial statements.

 

2.7(3)                   For financial years beginning on or after January 1, 2014, audited financial statements must be accompanied by an auditor’s report prepared in accordance with Canadian GAAS and the following requirements:

 

1. The auditor’s report expresses an unmodified opinion.

 

2. The auditor’s report identifies all financial periods presented for which the auditor has issued an auditor’s report.

 

3. The auditor’s report is in the form specified by Canadian GAAS for an audit of financial statements prepared in accordance with a fair presentation framework.

 

4. The auditor’s report refers to IFRS as the applicable fair presentation framework.

 

5. If the investment fund has changed its auditor and a comparative period presented in the financial statements was audited by a predecessor auditor, the financial statements are accompanied by the predecessor auditor’s report on the comparative period or the auditor’s report refers to the predecessor auditor’s report on the comparative period.

 

Acceptable Auditors

2.8                       An auditor’s report must be prepared and signed by a person or company that is authorized to sign an auditor’s report by the laws of a jurisdiction of Canada, and that meets the professional standards of that jurisdiction.

 

Change in Year End

2.9(1)                   This section applies to an investment fund that is a reporting issuer.

 

2.9(2)                   Section 4.8 of National Instrument 51-102 applies to an investment fund that changes its financial year end, except that

 

(a) a reference to “interim period” must be read as “interim period” as defined in this Instrument;

 

(b) a requirement under National Instrument 51-102 to include specified financial statements must be read as a requirement to include the financial statements required under this Part; and

 

(c) a reference to “filing deadline” in subsection 4.8(2) of National Instrument 51-102 must be read as a reference to the filing deadlines provided for under section 2.2 and 2.4 of this Instrument.

 

2.9(3)                   Despite section 2.4, an investment fund is not required to file an interim financial report for any period in a transition year if the transition year is less than nine months in length.

 

2.9(4)                   Despite paragraphs 4.8(7)(a) and (b) and (8)(a) and (b) of National Instrument 51-102,

 

(a) for an interim financial report for an interim period in the transition year, the investment fund must include as comparative information

 

(i) a statement of financial position as at the end of its old financial year; and

 

(ii) a statement of comprehensive income, a statement of changes in financial position, and a statement of cash flows, for the interim period of the old financial year;

 

(b) for an interim financial report for an interim period in a new financial year, the investment fund must include as comparative information

 

(i) a statement of financial position as at the end of the transition year; and

 

(ii) a statement of comprehensive income, a statement of changes in financial position, and a statement of cash flows, for the period that is one year earlier than the interim period in the new financial year.

 

Change in Legal Structure

2.10                     If an investment fund that is a reporting issuer is party to an amalgamation, arrangement, merger, winding-up, reorganization or other transaction that will result in

 

(a) the investment fund terminating or ceasing to be a reporting issuer,

 

(b) another entity becoming an investment fund,

 

(c) a change in the investment fund’s financial year end, or

 

(d) a change in the name of the investment fund,

 

the investment fund must, as soon as practicable, and in any event not later than the deadline for the first filing required by this Instrument following the transaction, file a notice stating:

 

(e) the names of the parties to the transaction;

 

(f) a description of the transaction;

 

(g) the effective date of the transaction;

 

(h) if applicable, the names of each party that terminated or ceased to be a reporting issuer following the transaction and of each continuing entity;

 

(i) if applicable, the date of the investment fund’s first financial year end following the transaction; and

 

(j) if applicable, the periods, including the comparative periods, if any, of the interim financial report and annual financial statements required to be filed for the investment fund’s first financial year following the transaction.

 

Filing Exemption for Mutual Funds that are Non-Reporting Issuers

2.11                     A mutual fund that is not a reporting issuer is exempt from the filing requirements of section 2.1 for a financial year or section 2.3 for an interim period if

 

(a) the mutual fund prepares the applicable financial statements in accordance with this Instrument;

 

(b) the mutual fund delivers the financial statements to its securityholders in accordance with Part 5 within the same time periods as if the financial statements were required to be filed;

 

(c) the mutual fund has advised the regulator or securities regulatory authority that it is relying on this exemption not to file its financial statements; and

 

(d) the mutual fund has included in a note to the financial statements that it is relying on this exemption not to file its financial statements.

 

Disclosure of Auditor Review of Interim Financial Report

2.12(1)                 This section applies to an investment fund that is a reporting issuer.

 

2.12(2)                  If an auditor has not performed a review of the interim financial report required to be filed, the interim financial report must be accompanied by a notice indicating that the interim financial report has not been reviewed by an auditor.

 

2.12(3)                  If an investment fund engaged an auditor to perform a review of the interim financial report required to be filed and the auditor was unable to complete the review, the interim financial report must be accompanied by a notice indicating that the auditor was unable to complete a review of the interim financial report and the reasons why.

 

2.12(4)                  If an auditor has performed a review of the interim financial report required to be filed and the auditor has expressed a reservation in the auditor’s interim review report, the interim financial report must be accompanied by a written review report from the auditor.

 

 

PART 3 – FINANCIAL DISCLOSURE REQUIREMENTS

 

Statement of Financial Position

3.1                       The statement of financial position of an investment fund must disclose the following as separate line items, each shown at current value:

 

1. cash, term deposits and, if not included in the statement of investment portfolio, short term debt instruments.

 

2. investments.

 

3. accounts receivable relating to securities issued.

 

4. accounts receivable relating to portfolio assets sold.

 

5. accounts receivable relating to margin paid or deposited on futures or forward contracts.

 

6.amounts receivable or payable in respect of derivatives transactions, including premiums or discounts received or paid.

 

7. deposits with brokers for portfolio securities sold short.

 

8. accrued expenses.

 

9. accrued incentive arrangements or performance compensation.

 

10. portfolio securities sold short.

 

11. liabilities for securities redeemed.

 

12. liabilities for portfolio assets purchased.

 

13. income tax payable.

 

14. total equity or net assets attributable to securityholders and, if applicable, for each class or series.

 

15. total equity per security or net assets attributable to securityholders per security, or if applicable, per security of each class or series.

 

Statement of Comprehensive Income

3.2                       The statement of comprehensive income of an investment fund must disclose the following information as separate line items:

 

1. dividend revenue.

 

2. interest revenue.

 

3. income from derivatives.

 

4. revenue from securities lending.

 

5. management fees, excluding incentive or performance fees.

 

6. incentive or performance fees.

 

7. audit fees.

 

8. directors' or trustees' fees.

 

8.1 independent review committee fees.

 

9. custodial fees.

 

10. legal fees.

 

10.1 commissions and other portfolio transaction costs.

 

11. securityholder reporting costs.

 

12. [repealed].

 

13. amounts that would otherwise have been payable by the investment fund that were waived or paid by the manager or a portfolio adviser of the investment fund.

 

14. income tax.

 

15. [repealed].

 

16. realized gains or losses.

 

17. unrealized gains or losses.

 

17.1 if recognized as an expense, distributions, showing separately the amount distributed out of net investment income and out of realized gains on portfolio assets sold.

 

18. increase or decrease in total equity from operations, or in net assets attributable to securityholders from operations, excluding distributions, and, if applicable, for each class or series.

 

19. increase or decrease in total equity from operations per security, or in net assets attributable to securityholders from operations, excluding distributions, per security or, if applicable, per security of each class or series.

 

Statement of Changes in Financial Position

3.3                       The statement of changes in financial position of an investment fund must disclose, for each class or series, the following as separate line items:

 

1. total equity or net assets attributable to securityholders at  the beginning of the period.

 

2. [repealed].

 

3. proceeds from the issuance of securities of the investment  fund.

 

4. aggregate amounts paid on redemption of securities of the  investment fund.

 

5. securities issued on reinvestment of distributions.

 

6. if not recognized as an expense, distributions, showing separately the amount distributed out of net investment income and out of realized gains on portfolio assets sold.

 

6.1 return of capital

 

7. total equity or net assets attributable to securityholders at    the end of the period.

 

Statement of Cash Flows

3.4                       The statement of cash flows of an investment fund must disclose the following as separate line items:

 

1. [repealed].

 

2. proceeds of disposition of portfolio assets.

 

3. payments for the purchase of portfolio assets.

 

4. proceeds from the issuance of securities of the investment fund.

 

5. aggregate amounts paid on redemption of securities of the investment fund.

 

6. compensation paid in respect of the sale of securities of the investment fund.

 

Statement of Investment Portfolio

3.5(1)                  The statement of investment portfolio of an investment fund must disclose the following for each portfolio asset held or sold short:

 

1. the name of the issuer of the portfolio asset.

 

2. a description of the portfolio asset, including:

 

(a) for an equity security, the name of the class of the security;

 

(b) for a debt instrument not included in paragraph (c), all characteristics commonly used commercially to identify the instrument, including the name of the instrument, the interest rate of the instrument, the maturity date of the instrument, whether the instrument is convertible or exchangeable and, if used to identify the instrument, the priority of the instrument;

 

(c) for a debt instrument referred to in the definition of “money market fund” in National Instrument 81- 102 Investment Funds, the name, interest rate and maturity date of the instrument; and

 

(d) for a portfolio asset not referred to in paragraph (a), (b) or (c), the name of the portfolio asset and the material terms and conditions of the portfolio asset commonly used commercially in describing the portfolio asset.

 

3.        the number or aggregate face value of the portfolio asset.

 

4.        the cost of the portfolio asset.

 

5.        the current value of the portfolio asset.

 

3.5(2)                   For the purposes of subsection (1), disclosure for a long portfolio must be segregated from the disclosure for a short portfolio.

 

3.5(3)                   For the purposes of subsection (1) and subject to subsection (2), disclosure must be aggregated for portfolio assets having the same description and issuer.

 

3.5(4)                   [Repealed]

 

3.5(5)                   [Repealed]

 

3.5(6)                   If an investment fund holds positions in derivatives, the investment fund must disclose in the statement of investment portfolio or the notes to that statement,

 

(a) for long and short positions in options,

 

(i) the quantity of the underlying interest, the number of options, the underlying interest, the strike price, the expiration month and year, the cost and the current value, and

(ii) if the underlying interest is a future, information about the future in accordance with subparagraph (i);

 

(b) for positions in futures and forwards, the number of futures and forwards, the underlying interest, the price at which the contract was entered into, the delivery month and year and the current value;

 

(c) for positions in swaps, the number of swap contracts, the underlying interest, the principal or notional amount, the payment dates, and the current value; and

 

(d) if a rating of a counterparty has fallen below the designated rating level.

 

3.5(7)                   If applicable, the statement of investment portfolio included in the financial statements of the investment fund, or the notes to the statement of investment portfolio, must identify the underlying interest that is being hedged by each position taken by the investment fund in a derivative.

 

3.5(8)                   An investment fund may omit the information required by subsection (1) about mortgages from a statement of investment portfolio if the statement of investment portfolio discloses

 

(a) the total number of mortgages held;

 

(b) the aggregate current value of mortgages held;

 

(c) a breakdown of mortgages, by reference to number and current value among mortgages insured under

the National Housing Act (Canada), insured conventional mortgages and uninsured conventional mortgages;

 

(d) a breakdown of mortgages, by reference to number and current value, among mortgages that are pre-payable and those that are not pre-payable; and

 

(e) a breakdown of mortgages, by reference to number, current value, amortized cost and outstanding principal value, among groups of mortgages having contractual interest rates varying by no more than one quarter of one percent.

 

3.5(9)                   An investment fund must maintain records of all portfolio transactions undertaken by the investment fund.

 

Notes to Financial Statements

3.6(1)                   The notes to the financial statements of an investment fund must disclose the following:

 

1. the basis for determining current value and cost of portfolio assets and, if a method of determining cost other than by reference to the average cost of the portfolio assets is used, the method used.

 

1.1 for financial years beginning on or after January 1, 2014, the basis for classifying the investment fund’s outstanding securities, or each class or series of outstanding securities, as either equity instruments or financial liabilities.

 

2. if the investment fund has outstanding more than one class or series of securities ranking equally against its net assets, but differing in other respects,

 

(a) the number of authorized securities of each class or series;

 

(b) the number of securities of each class or series that have been issued and are outstanding;

 

(c) the differences between the classes or series, including differences in sales charges, and management fees;

 

(d) the method used to allocate income and expenses, and realized and unrealized capital gains and losses, to each class;

 

(e) the fee arrangements for any class-level expenses paid to affiliates; and

 

(f) transactions involving the issue or redemption of securities of the investment fund undertaken in the period for each class of securities to which the financial statements pertain.

 

3. to the extent the amount is ascertainable, the portion of the total client brokerage commissions, as defined in National Instrument 23-102 – Use of Client Brokerage Commissions, paid or payable to dealers by the investment fund for the provision of goods or services by the dealers or third parties, other than order execution.

 

4. the total cost of distribution of the investment fund’s securities recorded in the statement of changes in financial position.

 

5. the net asset value per security as at the date of the financial statements compared to the total equity per security or net assets attributable to securityholders per security as shown on the statement of financial position, and an explanation of each of the differences between these amounts.

 

3.6(2)       If not disclosed elsewhere in the financial statements, an investment fund that borrows money must, in a note to the financial statements, disclose the minimum and maximum amount borrowed during the period to which the financial statements or management report of fund performance pertain.

 

3.6(3)                   For financial years beginning on or after January 1, 2014, the notes to the financial statements must disclose

 

(a) in the case of annual financial statements, an unreserved statement of compliance with IFRS; and

 

(b) in the case of interim financial reports, an unreserved statement of compliance with International Accounting Standard 34 Interim Financial Reporting.

 

Inapplicable Line Items

3.7                       Despite the requirements of this Part, an investment fund may omit a line item from the financial statements for any matter that does not apply to the investment fund or for which the investment fund has nothing to disclose.

 

Disclosure of Securities Lending Transactions

3.8(1)                  An investment fund must disclose, in the statement of investment portfolio included in the financial statements of the investment fund, or in the notes to the financial statements,

 

(a) the aggregate dollar value of portfolio securities that were lent in the securities lending transactions of the investment fund that are outstanding as at the date of the financial statements; and

 

(b) the type and aggregate amount of collateral received by the investment fund under securities lending transactions of the investment fund that are outstanding as at the date of the financial statements.

 

3.8(2)                   The statement of financial position of an investment fund that has received cash collateral from a securities lending transaction that is outstanding as of the date of the financial statements must disclose separately

 

(a) the cash collateral received by the investment fund; and

 

(b) the obligation to repay the cash collateral.

 

3.8(3)                   The statement of comprehensive income of an investment fund must disclose income from a securities lending transaction as revenue.

 

3.8(4)                   An investment fund must include, in the notes to the financial statements, a reconciliation of the gross amount generated from the securities lending transactions of the investment fund to the revenue from securities lending disclosed in the statement of comprehensive income of the investment fund under item 4 of section 3.2.

 

3.8(5)                   The disclosure referred to in subsection (4) must include each of the following:

 

(a) the name of each person or company who was entitled to receive payments out of the gross amount generated from the securities lending transactions of the investment fund;

 

(b) the amount each recipient named under paragraph (a) was entitled to receive;

 

(c) the aggregate of the amounts disclosed under paragraph (b) as a percentage of the gross amount generated from the securities lending transactions of the investment fund.

 

Disclosure of Repurchase Transactions

3.9(1)                   An investment fund, in the statement of investment portfolio included in the financial statements of the investment fund, or in the notes to that statement, must, for a repurchase transaction of the investment fund that is outstanding as at the date of the statement, disclose

 

(a) the date of the transaction;

 

(b) the expiration date of the transaction;

 

(c) the nature and current value of the portfolio securities sold by the investment fund;

 

(d) the amount of cash received and the repurchase price to be paid by the investment fund; and

 

(e) the current value of the sold portfolio securities as at the date of the statement.

 

3.9(2)                  The statement of financial position of an investment fund that has entered into a repurchase transaction that is outstanding as of the date of the statement of financial position must disclose separately the obligation of the investment fund to repay the collateral.

 

3.9(3)                   The statement of comprehensive income of an investment fund must disclose income from the use of the cash received on a repurchase transaction as revenue.

 

3.9(4)                   The information required by this section may be presented on an aggregate basis.

 

Disclosure of Reverse Repurchase Transactions

3.10(1)                 An investment fund, in the statement of investment portfolio or in the notes to that statement, must, for a reverse repurchase transaction of the investment fund that is outstanding as at the date of the statement, disclose

 

(a) the date of the transaction;

 

(b) the expiration date of the transaction;

 

(c) the total dollar amount paid by the investment fund;

 

(d) the nature and current value or principal amount of the portfolio securities received by the investment fund; and

 

(e) the current value of the purchased portfolio securities as at the date of the statement.

 

3.10(2)                  The statement of financial position of an investment fund that has entered into a reverse repurchase transaction that is outstanding as of the date of the financial statements must disclose separately the reverse repurchase agreement relating to the transaction at current value.

 

3.10(3)                  The statement of comprehensive income of an investment fund must disclose income from a reverse repurchase transaction as revenue.

 

3.10(4)                  The information required by this section may be presented on an aggregate basis.

 

Scholarship Plans

3.11(1)                 In addition to the requirements of this Part, an investment fund that is a scholarship plan must disclose, as of the end of its most recently completed financial year, a separate statement or schedule to the financial statements that provides

 

(a) a summary of education savings plans and units outstanding by  year of eligibility, including

 

(i) disclosure of the number of units by year of eligibility for the opening units, units purchased, units forfeited and the ending units,

 

(ii) disclosure of the principal amounts and the accumulated income per year of eligibility, and their total balances, and

 

(iii) a reconciliation of the total balances of the principal amounts and the accumulated income in the statement or schedule to the statement of financial position of the scholarship plan;

 

(b) the total number of units outstanding; and

 

(c) a statement of scholarship awards paid to beneficiaries, and a reconciliation of the amount of scholarship awards paid with the    statement of comprehensive income.

 

3.11(2)                  Despite sections 3.1 and 3.2, an investment fund that is a scholarship plan may omit the “total equity per security or net assets attributable to securityholders per security” and “increase or decrease in total equity from operations per security, or in net assets attributable to securityholders from operations, excluding distributions, per security” line items from its financial statements.

 

Disclosure of Use of Leverage

3.12(1)                 An investment fund that uses leverage must disclose the following information in its financial statements:

 

(a) a brief explanation of the sources of leverage, including cash borrowing, short selling or use of specified derivatives, used during the reporting period covered by the financial statements,

 

(b) the lowest and highest levels of the aggregate exposure to those sources of leverage in the period;

 

(c) a brief explanation of the significance to the investment fund of the lowest and highest levels of the aggregate exposure to those sources of leverage.

 

3.12(2)                  For the purposes of subsection (1), an investment fund must calculate its aggregate exposure to the sources of leverage in accordance with section 2.9.1 of National Instrument 81-102 Investment Funds.

 

 

PART 4 – MANAGEMENT REPORTS OF FUND PERFORMANCE

 

 

Application

4.1                       This Part applies to an investment fund that is a reporting issuer.

 

Filing of Management Reports of Fund Performance

4.2                       An investment fund, other than an investment fund that is a scholarship plan, must file an annual management report of fund performance for each financial year and an interim management report of fund performance for each interim period at the same time that it files its annual financial statements or its interim financial report for that financial period.

 

Filing of Annual Management Report of Fund Performance for an Investment Fund that is a Scholarship Plan

4.3                       An investment fund that is a scholarship plan must file an annual management report of fund performance for each financial year at the same time that it files its annual financial statements.

 

Contents of Management Reports of Fund Performance

4.4                       A management    report of fund performance required by this Part must

 

(a) be prepared in accordance with Form 81-106F1; and

 

(b) not incorporate by reference information from any other document that is required to be included in a management report of fund performance.

 

Approval of Management Reports of Fund Performance

4.5(1)                   The board of directors of an investment fund that is a corporation must approve the management report of fund performance of the investment fund before the report is filed or made available to a holder or potential purchaser of securities of the investment fund.

 

4.5(2)                   The trustee or trustees of an investment fund that is a trust, or another person or company authorized to do so by the constating documents of the investment fund, must approve the management report of fund performance of the investment fund before the report is filed or made available to a holder or potential purchaser of securities of the investment fund.

 

 

PART 5 – DELIVERY OF FINANCIAL STATEMENTS AND

MANAGEMENT  REPORTS OF FUND PERFORMANCE

 

 

Delivery of Certain Continuous Disclosure Documents

5.1(1)                   In this Part, “securityholder” means a registered holder or beneficial owner of securities issued by an investment fund.

 

5.1(2)                   Subject to section 5.2 or section 5.3, an investment fund must send to a securityholder, by the filing deadline for the document, the following:

 

(a) annual financial statements;

 

(b) the interim financial report;

 

(c) if required to be prepared by the investment fund, the annual management report of fund performance;

 

(d) if required to be prepared by the investment fund, the interim management report of fund performance.

 

5.1(3)                   An investment fund must apply the procedures set out in National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer when complying with this Part.

 

5.1(4)                   Despite subsection (3), National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer does not apply to an investment fund with respect to a requirement under this Part if the investment fund has the necessary information to communicate directly with a beneficial owner of its securities.

 

Sending According to Standing Instructions

5.2(1)                   Subsection 5.1(2) does not apply to an investment fund that requests standing instructions from a securityholder in accordance with this section and sends the documents listed in subsection 5.1(2) according to those instructions.

 

5.2(2)                   An investment fund relying on subsection 5.2(1) must send, to each securityholder, a document that

 

(a) explains the choices a securityholder has to receive the documents listed in subsection 5.1(2);

 

(b) solicits instructions from the securityholder about delivery of those documents; and

 

(c) explains that the instructions provided by the securityholder will continue to be followed by the investment fund until they are changed by the securityholder.

 

5.2(3)                   If a person or company becomes a securityholder of an investment fund, the investment fund must solicit instructions in accordance with subsection (2) from the securityholder as soon as reasonably practicable after the investment fund accepts a purchase order from the securityholder.

 

5.2(4)                   An investment fund must rely on instructions given under this section until a securityholder changes them.

 

5.2(5)                   At least once a year, an investment fund must send each securityholder a reminder that

 

(a) the securityholder is entitled to receive the documents listed in subsection 5.1(2);

 

(b) the investment fund is relying on delivery instructions provided by the securityholder;

 

(c) explains how a securityholder can change the instructions it has given; and

 

(d) the securityholder can obtain the documents on the SEDAR+ website and on the investment fund’s designated website and by contacting the investment fund.

 

Sending According to Annual Instructions

5.3(1)                   Subsection 5.1(2) does not apply to an investment fund that requests annual instructions from a securityholder in accordance with this section and sends the documents listed in subsection 5.1(2) according to those instructions.

 

5.3(2)                   Subsection (1) does not apply to an investment fund that has previously relied on subsection 5.2(1).

 

5.3(3)                   An investment fund relying on subsection 5.3(1) must send annually to each securityholder a request form the securityholder may use to instruct the investment fund as to which of the documents listed in subsection 5.1(2) the securityholder wishes to receive.

 

5.3(4)                   The request form described in subsection (3) must be accompanied by a notice explaining that

 

(a) the securityholder is providing delivery instructions for the current year only; and

 

(b) the documents are available on the SEDAR+ website and on the investment fund’s designated website and by contacting the investment fund.

 

General

5.4(1)                   If a securityholder requests any of the documents listed in subsection 5.1(2), an investment fund must send a copy of the requested documents by the later of

 

(a) the filing deadline for the requested document; and

 

(b) ten calendar days after the investment fund receives the request.

 

5.4(2)                   An investment fund must not charge a fee for sending the documents referred to in this Part and must ensure that securityholders can respond without cost to the solicitations of instructions required by this Part.

 

5.4(3)                   Investment funds under common management may solicit one set of delivery instructions from a securityholder that will apply to all of the investment funds under common management held by that securityholder.

 

5.4(4)                   Despite subsection 7.1(3), for the purposes of delivery to a securityholder, an investment fund may bind its management report of fund performance with the management report of fund performance for one or more other investment funds if the securityholder holds each investment fund.

 

Websites

5.5                       An investment fund that is a reporting issuer must post on its designated website any documents listed in subsection 5.1(2) no later than the date that those documents are filed.

 

 

PART 6 – QUARTERLY PORTFOLIO DISCLOSURE

 

Application

6.1                       This Part applies to an investment fund that is a reporting issuer, other than a scholarship plan or a labour sponsored or venture capital fund.

 

Preparation and Dissemination

6.2(1)                   An investment fund must prepare quarterly portfolio disclosure that  includes

 

(a) a summary of investment portfolio prepared in accordance with Item 5 of Part B of Form 81-106F1 as at the end of

 

(i) each period of at least three months that ends three or nine months before the end of a financial year of the investment fund; or

 

(ii) in the case of a transition year of the investment fund, each period commencing on the first day of the transition year and ending either three, nine or twelve months, if applicable, after the end of its old financial year; and

 

(b) the total net asset value of the investment fund as at the end of the periods specified in (a) (i) or (ii).

 

6.2(2)                   An investment fund must post on its designated website the quarterly portfolio disclosure within 60 days of the end of the period for which the quarterly portfolio disclosure was prepared.

 

6.2(3)                   An investment fund must promptly send the most recent quarterly portfolio disclosure, without charge, to any securityholder of the investment fund, upon a request made by the securityholder 60 days after the end of the period to which the quarterly portfolio disclosure pertains.

 

 

PART 7 – BINDING AND PRESENTATION

 

 

Binding of Financial Statements and Management Reports of Fund    Performance

7.1(1)                   An investment fund must not bind its financial statements with the financial statements of another investment fund in a document unless all information relating to the investment fund is presented together and not intermingled with information relating to the other investment fund.

 

7.1(2)                   Despite subsection (1), if a document contains the financial statements of more than one investment fund, the notes to the financial statements may be combined and presented in a separate part of the document.

 

7.1(3)                   An investment fund must not bind its management report of fund performance with the management report of fund performance for another investment fund.

 

Multiple Class Investment Funds

7.2(1)                   An investment fund that has more than one class or series of securities outstanding that are referable to a single portfolio must prepare financial statements and management reports of fund performance that contain information concerning all of the classes or series.

 

7.2(2)                   If an investment fund has more than one class or series of securities outstanding, the distinctions between the classes or series must be disclosed in the financial statements and management reports of fund performance.

 

 

 

 

 

 

 

PART 8 – INDEPENDENT VALUATIONS FOR

LABOUR SPONSORED OR  VENTURE CAPITAL FUNDS

 

 

Application

8.1                       This Part applies to a labour sponsored or venture capital fund that is a reporting issuer.

 

Exemption from Requirement to Disclose Individual Current Values for Venture Investments

8.2                       Despite item 5 of subsection 3.5(1), a labour sponsored or venture capital fund is exempt from the requirement to present separately in a statement of investment portfolio the current value of each venture investment that does not have a market value if

 

(a) the labour sponsored or venture capital fund discloses in the statement of investment portfolio

 

(i) the cost amounts for each venture investment,

 

(ii) the total cost of the venture investments,

 

(iii) the total adjustment from cost to current value of the venture investments, and

 

(iv) the total current value of the venture investments;

 

(b) the labour sponsored or venture capital fund discloses in the statement of investment portfolio tables showing the distribution of venture investments by stage of development and by industry classification including

 

(i) the number of venture investments in each stage of development and industry class,

 

(ii) the total cost and aggregate current value of the venture investments for each stage of development and industry class, and

 

(iii) the total cost and aggregate current value of venture investments for each stage of development and industry class as a percentage of total venture investments;

 

(c) for a statement of investment portfolio contained in annual financial statements, the labour sponsored or venture capital fund has obtained an independent valuation relating to the value of the venture investments or to the net assets of the fund and has filed the independent valuation concurrently with the filing of the annual financial statements;

 

(d) for a statement of investment portfolio contained in an interim financial report, the labour sponsored or venture capital fund obtained and filed the independent valuation referred to in paragraph (c) in connection with the preparation of the most recent annual financial statements of the labour sponsored or venture capital fund; and

 

(e) the labour sponsored or venture capital fund has disclosed in the applicable financial statements that an independent valuation has been obtained as of the end of the applicable financial year.

 

Disclosure Concerning Independent Valuator

8.3                       A labour sponsored or venture capital fund that obtains an independent valuation must include, in the statement of investment portfolio contained in its annual financial statements, or in the notes to the annual financial statements,

 

(a) a description of the independent valuator’s qualifications, and

 

(b) a description of any past, present or anticipated relationship between the independent valuator and the labour sponsored or venture capital fund, its manager or portfolio adviser.

 

Content of Independent Valuation

8.4                       An independent valuation must provide the aggregate current value of the venture investments or of the total equity or net assets attributable to securityholders of the labour sponsored or venture capital fund as at the fund’s financial year end.

 

Independent Valuator’s Consent

8.5                       A labour sponsored or venture capital fund obtaining an independent valuation must

 

(a) obtain the independent valuator’s consent to its filing; and

 

(b) include a statement in the valuation report, signed by the independent valuator, in substantially the following form:

 

“We refer to the independent valuation of the [total equity/net assets attributable to securityholders/venture investments] of [name of labour sponsored or venture capital fund] as of [date of financial year end] dated [date]. We consent to the filing of the independent valuation with the securities regulatory authorities.”

 

 

PART 9 – ANNUAL INFORMATION FORM

 

Application

9.1                       This Part applies to an investment fund that is a reporting issuer.

 

Requirement to File Annual Information Form

9.2                       An investment fund must file an annual information form if the investment fund has not obtained a receipt for a prospectus during the last 12 months preceding its financial year end.

 

Filing Deadline for Annual Information Form

9.3                       An investment fund required under section 9.2 to file an annual information form must file the annual information form no later than 90 days after the end of its most recently completed financial year.

 

Preparation and Content of Annual Information Form

9.4(1)                   An annual information form required to be filed under section 9.2 must be prepared as of the end of the most recently completed financial year of the investment fund to which it pertains.

 

9.4(2)                   Subject to subsections (2.1), (2.2) and (2.3), an annual information form that is required to be filed must be completed

 

(a) in accordance with Form 41-101F2 if the investment fund last distributed securities under a prospectus prepared in accordance with that Form,

 

(b) in accordance with Form 81-101F1 if the mutual fund last distributed securities under a prospectus prepared in accordance with that Form, or

 

(c) in accordance with Form 81-101F2.

 

9.4(2.1)                For the purposes of completing Form 41-101F2 under paragraph (2)(a),

(a) a reference in Form 41-101F2 to “prospectus” must be read as a reference to “annual information form”,

 

(b) the items of Form 41-101F2 that are applicable to distributions of securities only and are inapplicable to any other case do not apply,

 

(c) item 1.1, items 1.4 to 1.15, paragraph 3.3(1)(b), paragraph 3.3(1)(f), item 3.5, paragraph 3.6(3)(a) and items 7.1, 9.1, 11, 14.1, 15.2, 16, 17.1, 17.2, 24, 25, 26, 28, 29.2, 36, 38 and 39 of Form 41-101F2 do not apply,

 

(d) item 1.3 of Form 41-101F2 must be read as follows:

 

(1) State on the front cover that the document is an annual information form for each of the mutual funds to which the document pertains.

 

(2) State on the front cover the names of the mutual funds and, at the option of the mutual funds, the name of the mutual fund family to which the document pertains. If the mutual fund has more than one class or series of securities, state the name of each of those classes or series covered in the document.

 

(3) State the date of the document, which is the date of the certificates for the document. This date must be within three business days of the date it is filed with the securities regulatory authority. Write the date of the document in full, writing the name of the month.

 

(4) State, in substantially the following words:

 

“No securities regulatory authority has expressed an opinion about these [units/shares] and it is an offence to claim otherwise.”,

 

(e) a reference to the term “distribution” in item 3.2 of Form 41-101F2 must be read as a reference to “investment fund”,

 

(f) subsections 19.1(11) to (13) of Form 41-101F2 do not apply to an investment fund that is a corporation, except for the requirement to include disclosure in respect of the independent review committee,

 

(g) item 21 of Form 41-101F2 must be completed in respect of all of the securities of the investment fund, and

 

(h) item 35.1 of Form 41-101F2 must be completed despite no distribution taking place.

 

9.4(2.2)                 For the purposes of completing Form 81-101F1 under paragraph (2)(b),

 

(a) a reference in Form 81-101F1 to “simplified prospectus” must be read as a reference to “annual information form”,

 

(b) the items of Form 81-101F1 that are applicable to distributions of securities only and are inapplicable to any other case do not apply,

 

(c) general instruction (18), subsection 1.1(4), subsection 1.1(5), subsection 1.1(7), item 3, item 4.4, paragraph 4.17(1)(e), subsections 7(3) to (11) and items 12, 15, 16, 17 and 18 of Part A of Form 81-101F1 do not apply,

 

(d) item 4.16 of Part A of Form 81-101F1 does not apply to an investment fund that is a corporation, except for the requirement to include disclosure in respect of the independent review committee,

 

(e) item 7 of Part B of Form 81-101F1 must be completed in respect of all of the securities of the investment fund, and

 

(f) subsection 12(2) of Part B of Form 81-101F1 must be read as follows:

 

(2) State, in substantially the following words:

 

• “Additional information about the Fund[s] is available in the Fund[’s/s’] Fund Facts document, management reports of fund performance and financial statements.

 

• You can get a copy of these documents, at your request, and at no cost, by calling [toll-free/collect] [insert the toll- free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your dealer or by e-mail at [insert e- mail address].

 

• These documents and other information about the Fund[s], such as information circulars and material contracts, are also available [on the [insert name of mutual fund] designated website at [insert investment fund designated website address] or] at www.sedarplus.com.”

 

9.4(2.3)                For the purposes of completing Form 81-101F2 under paragraph (2)(c),

 

(a) a reference to "mutual fund" in Form 81-101F2 must be read as a reference to "investment fund",

 

(b) general instructions (3), (10) and (14) of Form 81-101F2 do not apply,

 

(c) subsections (3), (4) and (6) of item 1.1 of Form 81-101F2 do not apply,

 

(d) subsections (3), (4) and (6) of item 1.2 of Form 81-101F2 do not apply,

 

(e) item 5 of Form 81-101F2 must be completed in respect of each class or series of securities of the investment fund,

 

(f) item 15 of Form 81-101F2 does not apply to an investment fund that is a corporation, except for the disclosure required to be made in respect of the independent review committee, and

 

(g) items 19, 20, 21 and 22 of Form 81-101F2 do not apply.

 

 

PART 10 – PROXY VOTING DISCLOSURE FOR PORTFOLIO SECURITIES  HELD

 

Application

10.1                      This Part applies to an investment fund that is a reporting issuer.

 

Requirement to Establish Policies and Procedures

10.2(1)                  An investment fund must establish policies and procedures that it will follow to determine whether, and how, to vote on any matter for which the investment fund receives, in its capacity as securityholder, proxy materials for a meeting of securityholders of an issuer.

 

10.2(2)                  The policies and procedures referred to in subsection (1) must include

 

(a) a standing policy for dealing with routine matters on which the investment fund may vote;

 

(b) the circumstances under which the investment fund will deviate from the standing policy for routine matters;

 

(c) the policies under which, and the procedures by which, the investment fund will determine how to vote or refrain from voting on non-routine matters; and

 

(d) procedures to ensure that portfolio securities held by the investment fund are voted in accordance with the instructions of the investment fund.

 

10.2(3)                  An investment fund must include a summary of the policies and procedures required under this section in its prospectus.

 

Proxy Voting Record

10.3                      An investment fund must maintain a proxy voting record that includes, for each time that the investment fund receives, in its capacity as securityholder, materials relating to a meeting of securityholders of a reporting issuer or the equivalent of a reporting issuer in a foreign jurisdiction,

 

(a) the name of the issuer;

 

(b) the exchange ticker symbol of the portfolio securities, unless not readily available to the investment fund;

 

(c) the CUSIP number for the portfolio securities;

 

(d) the meeting date;

 

(e) a brief identification of the matter or matters to be voted on at the   meeting;

 

(f) whether the matter or matters voted on were proposed by the issuer, its management or another person or company;

 

(g) whether the investment fund voted on the matter or matters;

 

(h) if applicable, how the investment fund voted on the matter or matters; and

 

(i) whether votes cast by the investment fund were for or against the recommendations of management of the issuer.

 

 

Preparation and Availability of Proxy Voting Record

10.4(1)                  An investment fund must prepare a proxy voting record on an annual basis for the period ending on June 30 of each year.

 

10.4(2)                  An investment fund must post the proxy voting record on its designated website no later than August 31 of each year.

 

10.4(3)                  An investment fund must promptly send the most recent copy of the investment fund’s proxy voting policies and procedures and proxy voting record, without charge, to any securityholder upon a request made by the    securityholder after August 31.

 

 

 

 

 

 

PART 11 – MATERIAL CHANGE REPORTS

 

 

Application

11.1                      This Part applies to an investment fund that is a reporting issuer.

 

Publication of Material Change

11.2(1)                  If a material change occurs in the affairs of an investment fund, the investment fund must

 

(a) promptly issue and file a news release that is authorized by an executive officer of the manager of the investment fund and that discloses the nature and substance of the material change;

 

(b) post all disclosure made under paragraph (a) on the investment fund’s designated website;

 

(c) as soon as practicable, but in any event no later than 10 days after the date on which the change occurs, file a report containing the information required by Form 51-102F3, except that a reference in Form 51-102F3 to

 

(i) the term “material change” must be read as “material change” under this Instrument;

 

(ii) “section 7.1 of National Instrument 51-102” in Item 3 of Part 2 must be read as a reference to “section 11.2 of National Instrument 81-106”;

 

(iii) “subsection 7.1(2) of National Instrument 51-102” in Item 6 of Part 2 must be read as a reference to “subsection 11.2(2) of National Instrument 81-106”;

 

(iv) “subsection 7.1(5) of National Instrument 51-102” in Items 6 and 7 of Part 2 must be read as a reference to “subsection 11.2(4) of National Instrument 81-106”; and

 

(v) “executive officer of your company” in Item 8 of Part 2 must be read as a reference to “officer of the investment fund or of the manager of the investment fund”; and

 

(d) file an amendment to its prospectus, simplified prospectus, fund facts document or ETF facts document that discloses the material change in accordance with the requirements of securities legislation.

 

11,2(2)                  If

 

(a) in the opinion of the board of directors or trustee of an investment fund or the manager, and if that opinion is arrived at in a reasonable manner, the disclosure required by subsection (1) would be unduly detrimental to the investment fund’s interest; or

 

(b) the material change

 

(i) consists of a decision to implement a change made by senior management of the investment fund or senior management of the manager of the investment fund who believe that confirmation of the decision by the board of directors or persons acting in a similar capacity is probable; and

 

(ii) senior management of the investment fund or senior management of the manager of the investment fund has no reason to believe that persons with knowledge of the material change have made use of that knowledge in purchasing or selling securities of the investment fund,

 

the investment fund may, instead of complying with subsection (1), immediately file the report required under paragraph (1) (c) marked to indicate that it is confidential, together with written reasons for non-disclosure.

 

11.2(3)                  [Repealed]

 

11.2(4)                  If a report has been filed under subsection (2), the investment fund must advise the regulator or securities regulatory authority in writing within ten days of the initial filing of the report if it believes the report should continue to remain confidential and every 10 days thereafter until the material change is generally disclosed in the manner referred to in subsection (1) or, if the material change consists of a decision of the type referred to in paragraph (2) (b), until that decision has been rejected by the board of directors of the investment fund or the board of directors of the manager of the investment fund.

 

11.2(5)                  Despite filing a report under subsection (2), an investment fund must promptly and generally disclose the material change in the manner referred to in subsection (1) upon the investment fund becoming aware, or having reasonable grounds to believe, that a person or company is purchasing or selling securities of the investment fund with knowledge of the material change that has not been generally disclosed.

 

 

PART 12 – PROXY SOLICITATION AND INFORMATION CIRCULARS

 

Applications

12.1                      This Part applies to an investment fund that is a reporting issuer.

 

Sending of Proxies and Information Circulars

12.2(1)                  If management of an investment fund or the manager of an investment fund gives or intends to give notice of a meeting to registered holders of the investment fund, management or the manager must, at the same time as or before giving that notice, send to each registered holder who is entitled to notice of the meeting a form of proxy for use at the meeting.

 

12.2(2)                 A person or company that solicits proxies from registered holders of an investment fund must

 

(a) in the case of a solicitation by or on behalf of management of the investment fund, send with the notice of meeting to each registered holder whose proxy is solicited a completed Form 51-102F5; or

 

(b) in the case of a solicitation by or on behalf of any person or company other than management of the investment fund, at the same time as or before the solicitation, send a completed Form 51- 102F5 and a form of proxy to each registered holder whose proxy is solicited.

 

12.2(3)                  [Repealed]

 

Notice-and-access

12.2.1                   A person or company that solicits proxies from a registered holder of securities of an investment fund under subsection 12.2(2) of this Instrument, or sends proxy- related materials to beneficial owners of an investment fund under section 2.7 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, must not use notice-and-access to send proxy-related materials to the registered holder or beneficial owner unless all of the following apply:

 

(a) the registered holder or beneficial owner is sent a notice that contains only the following information:

 

(i) the date, time and location of the meeting;

 

(ii) a description of each matter or group of related matters identified in the form of proxy to be voted on, unless that information is already included in the form of proxy, in Form 54-101F6 Request for Voting Instructions Made by Reporting Issuer or in Form 54-101F7 Request for Voting Instructions Made by Intermediary, that is sent to the registered holder or beneficial owner under paragraph (b);

 

(iii) the website addresses for SEDAR+ and the non-SEDAR+ website where the proxy-related materials are posted;

 

(iv) a reminder to review the information circular before voting;

 

(v) an explanation of how to obtain a paper copy of the information circular and, if applicable, the financial statements of the investment fund, from the person or company soliciting proxies;

 

(vi) a plain-language explanation of notice-and-access that includes the following information:

 

(A) if stratification is used, a list of the types of registered holders or beneficial owners who will receive paper copies of the information circular and, if applicable, the financial statements of the investment fund;

 

(B) the estimated date and time by which a request for a paper copy of the information circular and, if applicable, the financial statements of the investment fund, is to be received in order for the registered holder or beneficial owner to receive the paper copy in advance of any deadline for the submission of the proxy or the voting instructions for the meeting, and the date of the meeting;

 

(C) an explanation of how the registered holder or beneficial owner is to return the proxy or the voting instructions, including any deadline for return of the proxy or the voting instructions;

 

(D) the sections of the information circular where disclosure regarding each matter or group of related matters identified in the notice can be found;

 

(E) a toll-free telephone number the registered holder or beneficial owner can call to get information about notice-and-access;

 

(b) by prepaid mail, courier or the equivalent,

 

(i) the registered holder is sent the notice, and a form of proxy for use at the meeting, at least 30 days before the date of the meeting, and

 

(ii) the beneficial owner is sent the notice and a Form 54- 101F6 or Form 54-101F7, using the procedures referred to in section 2.9 or 2.12 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, as applicable;

 

(c) the proxy-related materials are sent at least 30 days, and no more than 50 days, before the date of the meeting;

 

(d) if proxy-related materials are sent directly to a NOBO using notice-and-access, the notice and, if applicable, any paper copies of information circulars and financial statements, are sent at least 30 days before the date of the meeting;

 

(e) if proxy-related materials are sent indirectly to a beneficial owner using notice-and-access, the notice and, if applicable, any paper copies of information circulars or financial statements, are sent to any proximate intermediary

 

(i) at least 3 business days before the 30th day before the date of the meeting, in the case of proxy-related materials that are to be sent on by the proximate intermediary by first class mail, courier or the equivalent, and

 

(ii) at least 4 business days before the 30th day before the date of the meeting, in the case of proxy-related materials that are to be sent on by the proximate intermediary using any other type of prepaid mail;

 

(f) in the case of a solicitation by or on behalf of management of the investment fund, or if another person or company soliciting proxies has requested a meeting, the notification of meeting and record dates is filed on SEDAR+ and that filing occurs on the same date that the notification of meeting and record dates is sent under subsection 2.2(1) of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer;

 

(g) public electronic access to the information circular, the notice and the form of proxy is provided on or before the date that the notice is sent to the registered holder or beneficial owner as follows:

 

(i) the documents are filed on SEDAR+;

 

(ii) the documents are posted for no less than one year on

 

(A) the investment fund’s designated website, in the case of a solicitation by or on behalf of management of the investment fund, and

 

(B) a website other than SEDAR+, in the case of a solicitation by or on behalf of any other person or company;

 

(h) a toll-free telephone number is provided for use by the registered holder or beneficial owner to request a paper copy of the information circular and, if applicable, the financial statements of the investment fund at any time

 

(i) following the date that the notice is sent to the registered holder or beneficial owner, and

 

(ii) on or before the date of the meeting, including any adjournment;

 

(i) if a request for a paper copy of the information circular and, if applicable, the financial statements of the investment fund, is received by telephone using the toll-free telephone number provided in the notice or by any other means, a paper copy of the document requested is sent free of charge by the person or company to the registered holder or beneficial owner at the address specified in the request,

 

(i) in the case of a request received before the date of the meeting, within 3 business days after receiving the request, by first class mail, courier or the equivalent, and

 

(ii) in the case of a request received on or after the date of the meeting, and within one year of the date the information circular is filed on SEDAR+, within 10 calendar days after receiving the request, by prepaid mail, courier or the equivalent;

 

(j) the notice is not sent with any other document other than the following:

 

(i) a form of proxy, Form 54-101F6 or Form 54-101F7;

 

(ii) if financial statements of the investment fund are to be presented at the meeting, the financial statements;

 

(iii) if the meeting is to approve a reorganization of the investment fund with another investment fund as contemplated by paragraph 5.1(1)(f) of National Instrument 81-102 Investment Funds, Form 81-101F3 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document for the continuing investment fund;

 

(k) the notice is not combined with any document other than a form of proxy, Form 54-101F6 or Form 54-101F7;

 

(l) the information circular discloses that proxy-related materials are being sent to registered holders or beneficial owners of the investment fund using notice-and-access and, if stratification is used, the types of registered holders or beneficial owners who will receive paper copies of the information circular and, if applicable, the financial statements of the investment fund;

 

(m) the cost of sending the information circular and, if applicable, the financial statements of the investment fund, to a registered holder or beneficial owner, if a paper copy is requested by the registered holder or beneficial owner, is paid by the manager of the investment fund or other person or company soliciting proxies that is not the investment fund.

 

Restrictions on Information Gathering

12.2.2(1)               A person or company using notice-and-access that receives a request for a paper copy of the information circular or the financial statements of the investment fund, through the toll-free telephone number provided in the notice referred to in paragraph 12.2.1(a) or by any other means, must not

 

(a) ask for any information about the person or company making the request, other than the name and address to which the information circular and, if applicable, the financial statements, are to be sent, or

 

(b) disclose or use the name or address of the person or company making the request for any purpose other than sending the information circular or the financial statements of the investment fund.

 

12.2.2(2)               A person or company that posts proxy-related materials to a website under subparagraph 12.2.1(g)(ii) must not collect information that can be used to identify a person or company that has accessed the website.

 

Posting Materials on Non-SEDAR+ Website

12.2.3(1)               A person or company that posts proxy-related materials to a website under subparagraph 12.2.1(g)(ii) must also post on the website all of the following:

 

(a) any disclosure regarding the meeting that the person or company has sent to registered holders or beneficial owners;

 

(b) any written communications the person or company has made available to the public regarding each matter or group of matters to be voted on at the meeting, whether or not the communications were sent to registered holders or beneficial owners.

 

12.2.3(2)               For greater certainty, a person or company that posts proxy-related materials on a website under subparagraph 12.2.1(g)(ii) must do so in a manner and format that permits an individual with a reasonable level of computer skill and knowledge to easily do all of the following:

 

(a) access, read and search the materials;

 

(b) download and print the materials.

 

 

 

Record Date for Notice of Meeting, Abridgement of Time and Notification of Meeting Date and Record Date

12.2.4(1)               A person or company that solicits proxies from a registered holder or beneficial owner using notice-and-access, in the case of solicitation by or on behalf of management of an investment fund, must

 

(a) despite paragraph 2.1(b) of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, set or request a record date for notice of the meeting that is no fewer than 40 days before the date of the meeting,

 

(b) specify in the notification of meeting and record dates sent under section 2.2 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer that proxy- related materials are being sent to registered holders or beneficial owners using notice-and-access, and

 

(c) not abridge the time prescribed under paragraph 2.1(b), subsection 2.2(1) or subsection 2.5(1) of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer unless the person or company

 

(i) complies with paragraphs 2.20 (a) to (c) of that Instrument, and

 

(ii) sends the notification of meeting and record dates sent under section 2.2 of that Instrument at least 3 business days before the record date for notice of the meeting.

 

12.2.4(2)               In the case of a person or company not referred to in subsection (1) that requests a meeting, the person or company must request the following:

 

(a) a record date for notice of the meeting that is no fewer than 40 days before the date of the meeting;

 

(b) that the notification of meeting and record dates sent under section 2.2 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer state that proxy-related materials are being sent to registered holders or beneficial owners using notice-and-access.

 

Consent to Other Delivery Methods

12.2.5                   For greater certainty, section 12.2.1 does not

 

(a) prevent a registered holder or beneficial owner from consenting to the use of other delivery methods to send proxy-related materials,

 

(b) terminate or modify a consent that a registered holder or beneficial owner previously gave to a person or company regarding the use of other delivery methods to send proxy-related materials to the registered holder or beneficial owner, or

 

(c) prevent a person or company that solicits proxies, an intermediary or any other person or company from sending proxy-related materials to a registered holder or beneficial owner using a method to which the registered holder or beneficial owner has consented prior to January 5, 2022.

 

Instructions to Receive Paper Copies

12.2.6(1)               Despite section 12.2.1, an investment fund or its manager or management may obtain standing instructions from a registered holder of securities of the investment fund, and an intermediary may obtain standing instructions from a client that is a beneficial owner of securities of the investment fund, that a paper copy of the information circular or the financial statements of the investment fund be sent to the registered holder or beneficial owner in all cases when using notice-and-access in respect of a meeting of the investment fund.

 

12.2.6(2)               If an investment fund or its manager or management has obtained standing instructions from a registered holder under subsection (1), the investment fund, its manager or management must do all of the following:

 

(a) include with the notice referred to in paragraph 12.2.1(a) any paper copies of information circulars or financial statements of the investment fund referred to in the registered holder’s standing instructions;

 

(b) notify the registered holder, by including a statement in the notice referred to in paragraph 12.2.1(a) or by another method, of the means by which the registered holder may revoke the registered holder’s standing instructions.

 

12.2.6(3)               If an intermediary has obtained standing instructions from a beneficial owner under subsection (1), the intermediary must do all of the following:

 

(a) if the investment fund or its manager or management is sending proxy-related materials directly under section 2.9 of National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer, indicate in the NOBO list provided to the investment fund or its manager or management those NOBOs who have provided standing instructions under subsection (1) as at the date the NOBO list is generated;

 

(b) if the intermediary is sending proxy-related materials to a beneficial owner on behalf of an investment fund or its manager or management using notice-and-access, request appropriate quantities of paper copies of the information circular and, if applicable, the financial statements of the investment fund, from the investment fund or its manager or management, for forwarding to beneficial owners who have provided standing instructions to be sent paper copies;

 

(c) include with the notice a description of, or otherwise inform the beneficial owner of, the means by which the beneficial owner may revoke the beneficial owner’s standing instructions.

 

Compliance with National Instrument 51-102 and National Instrument 54-101

12.2.7(1)               A person or company that solicits proxies must comply with the following:

 

(a) Items 7.12 and 9.9 of Form 54-101F2 Request for Beneficial Ownership Information;

 

(b) Form 54-101F5 Electronic Format for NOBO List.

 

12.2.7(2)               For the purposes of subsection (1), “notice-and-access” and “stratification”, as used in Items 7.12 and 9.9 of Form 54-101F2 and in Form 54-101F5, have the same meaning as in this Instrument.

 

Exemption

12.3(1)                  Subsection 12.2(2) does not apply to a solicitation by a person or company in respect of securities of which the person or company is the beneficial owner.

 

12.3(2)                  Paragraph 12.2(2)(b) does not apply to a solicitation if the total number of securityholders whose proxies are solicited is not more than 15.

 

12.3(3)                  For the purposes of subsection (2), two or more persons or companies who are joint registered owners of one or more securities are considered to be one securityholder.

 

Compliance with National Instrument 51-102

12.4                      A person or company that solicits proxies under section 12.2 must comply with sections 9.3 and 9.4 of National Instrument 51-102 as if those sections applied to the person or company.

 

PART 13 – CHANGE OF AUDITOR DISCLOSURE

 

 

Application

13.1                      This Part applies to an investment fund that is a reporting issuer.

 

Change of Auditor

13.2                      Section 4.11 of National Instrument 51-102 applies to an investment fund that changes its auditor, except that references in that section to the “board of directors” are to be read as references to,

 

(a) if the investment fund is a corporation, the “board of directors of the investment fund”, or

 

(b) if the investment fund is a trust, the “trustee or trustees or another person or company authorized by the constating documents of the    investment fund”.

 

 

PART 14 – CALCULATION OF NET ASSET VALUE

 

 

Application

14.1                      This Part applies to an investment fund that is a reporting issuer.

 

Calculation, Frequency and Currency

14.2(1)                  The net asset value of an investment fund must be calculated using the fair value of the investment fund’s assets and liabilities.

 

14.2(1.1)               The net asset value of an investment fund must include the income and expenses of the investment fund accrued up to the date of calculation of the net asset value.

 

14.2(1.2)               For the purposes of subsection (1), fair value means

 

(a) the market value based on reported prices and quotations in an active market, or

 

(b) if the market value is not available, or the manager of the investment fund believes that it is unreliable, a value that is fair and reasonable in all the relevant circumstances.

 

14.2(1.3)               The manager of an investment fund must

 

(a) establish and maintain appropriate written policies and procedures for determining the fair value of the investment fund’s assets and liabilities; and

 

(b) consistently follow those policies and procedures.

 

14.2(1.4)               The manager of an investment fund must maintain a record of the determination of fair value and the reasons supporting that determination.

 

14.2(2)                  For the purposes of calculating net asset value for purchases and redemptions of its securities as required by Parts 9 and 10 of National Instrument 81-102 Investment Funds, a labour sponsored or venture capital fund that has included a deferred charge for sales commissions in the calculation may continue to do so, provided that

 

(a) the calculation reflects the amortization of this deferred charge over the remaining amortization period, and

 

(b) the labour sponsored or venture capital fund ceased adding to this deferred charge by December 31, 2003.

 

14.2(3)                  An investment fund must calculate its net asset value at least as frequently as the following:

 

(a) if the investment fund does not use specified derivatives or sell securities short, once a week;

 

(b) if the investment fund uses specified derivatives or sells securities short, once every business day.

 

14.2(4)                  A mutual fund that holds securities of other mutual funds must have dates for the calculation of net asset value that are compatible with those of the other mutual funds.

 

14.2(5)                  Despite paragraph 3(a), an investment fund that, at the date that this Instrument comes into force, calculates net asset value no less frequently than once a month may continue to calculate net asset value at least as frequently as it does at that date.

 

14.2(6)                  The net asset value of an investment fund must be calculated in the currency of Canada or in the currency of the United States of America or both.

 

14.2(6.1)               An investment fund must, upon calculating the net asset value of the investment fund under this section, make the following information available to the public at no cost:

 

(a) the net asset value of the investment fund;

 

(b) the net asset value per security of the investment fund unless the investment fund is a scholarship plan.

 

14.2(7)                  An investment fund that publishes its net asset value or net asset value per security in the financial press, or posts its net asset value or net asset value per security on its designated website, must provide its current net asset value or net asset value per security on a timely basis to the financial press or post it to its designated website on a timely basis, as applicable.

 

Portfolio Transactions

14.3                      The net asset value of an investment fund must include each purchase or sale of a portfolio asset no later than in the next calculation of the net asset value after the date the purchase or sale becomes binding.

 

Capital Transactions

14.4                      The investment fund must include each issue or redemption of a security of the investment fund in the next calculation of net asset value the investment fund makes after the calculation of net asset value used to establish the issue or redemption price.

 

 

PART 15 – CALCULATION OF MANAGEMENT EXPENSE RATIO

 

 

Calculation of Management Expense Ratio

15.1(1)                  An investment fund may disclose its management expense ratio only if the management expense ratio is calculated for the financial year or interim period of the investment fund and if it is calculated by

(a) dividing

 

(i) the aggregate of

 

(A) total expenses of the investment fund, excluding distributions if recognized as an expense, commissions and other portfolio transaction costs, before income taxes, for the financial year or interim period, as shown on its statement of comprehensive income; and

 

(B) any other fee, charge or expense of the investment fund that has the effect of reducing the investment fund’s net asset value;

 

by

 

(ii) the average net asset value of the investment fund for the financial year or interim period, obtained by

 

(A) adding together the net asset values of the investment fund as at the close of business of the investment fund on each day during the financial year or interim period on which the net asset value of the investment fund has been calculated, and

 

(B) dividing the amount obtained under clause (A) by the number of days during the financial year or interim period on which the net asset value of the investment fund has been calculated; and

 

(b) multiplying the result obtained under paragraph (a) by 100.

 

15.1(2)                  If any fees and expenses otherwise payable by an investment fund in a financial year or interim period were waived or otherwise absorbed by a member of the organization of the investment fund, the investment fund must disclose, in a note to the disclosure of its management expense ratio, details of

 

(a) what the management expense ratio would have been without any waivers or absorptions;

 

(b) the length of time that the waiver or absorption is expected to continue;

 

(c) whether the waiver or absorption can be terminated at any time by the member of the organization of the investment fund; and

 

(d) any other arrangements concerning the waiver or absorption.

 

15.1(3)                  Investment fund expenses rebated by a manager or an investment fund to a securityholder must not be deducted from total expenses of the investment fund in determining the management expense ratio of the investment fund.

 

15.1(4)                  An investment fund that has separate classes or series of securities must calculate a management expense ratio for each class or series, in the manner required by this section, modified as appropriate.

 

15.1(5)                  The management expense ratio of an investment fund for a financial period of less than or greater than twelve months must be annualized.

 

15.1(6)                  If an investment fund provides its management expense ratio to a service provider that will arrange for public dissemination of the management expense ratio,

 

(a) the investment fund must provide the management expense ratio calculated in accordance with this Part; and

 

(b) the requirement to provide note disclosure contained in subsection (2) does not apply if the investment fund indicates, as applicable, that fees have been waived, expenses have been absorbed, or that fees or expenses were paid directly by investors during the period for which the management expense ratio was calculated.

 

Fund of Funds Calculation

15.2(1)                  For the purposes of subparagraph 15.1 (1) (a) (i), the total expenses for a financial year or interim period of an investment fund that invests in securities of other investment funds is equal to the sum of

 

(a) the total expenses incurred by the investment fund that are for the period for which the calculation of the management expense ratio is made and that are attributable to its investment in each underlying investment fund, as calculated by

 

(i) multiplying the total expenses of each underlying investment fund, excluding distributions if recognized as an expense, commissions and other portfolio transaction costs, before income taxes, for the financial year or interim period, by

 

(ii) the average proportion of securities of the underlying investment fund held by the investment fund during the financial year or interim period, calculated by

 

(A) adding together the proportion of securities of the underlying investment fund held by the investment fund on each day in the period, and

 

(B) dividing the amount obtained under clause (A) by the number of days in the period; and

 

(b) the total expenses of the investment fund, excluding distributions if recognized as an expense, commissions and other portfolio transaction costs, before income taxes, for the period.

 

15.2(2)                  An investment fund that has exposure to one or more other investment funds through the use of derivatives in a financial year or interim period must calculate its management expense ratio for the financial year or interim period in the manner described in subsection (1), treating each investment fund to which it has exposure as an “underlying investment fund” under subsection (1).

 

15.2(3)                  Subsection (2) does not apply if the derivatives do not expose the investment fund to expenses that would be incurred by a direct investment in the relevant investment funds.

 

15.2(4)                  Management fees rebated by an underlying fund to an investment fund that invests in the underlying fund must be deducted from total expenses of the underlying fund if the rebate is made for the purpose of avoiding duplication of fees between the two investment funds.

 

 

PART 16 – ADDITIONAL FILING REQUIREMENTS

 

 

Application

16.1                      This Part applies to an investment fund that is a reporting issuer.

 

Additional Filing Requirements

16.2                      If an investment fund sends to its securityholders any disclosure document other than those required by this Instrument, the investment fund must file a copy of the document on the same date as, or as soon as practicable after, the date on which the document is sent to its securityholders.

 

Voting Results

16.3                      An investment fund must, promptly following a meeting of securityholders at which a matter was submitted to a vote, file a report that discloses, for each matter voted upon

 

(a) a brief description of the matter voted upon and the outcome of the vote; and

 

(b) if the vote was conducted by ballot, the number and percentage of votes cast, which includes votes cast in person and by proxy, for, against, or withheld from, each vote.

 

Filing of Material Contracts

16.4                      An investment fund that is not subject to National Instrument 81-101 Mutual Fund Prospectus Disclosure, or securities legislation that imposes a similar requirement, must file a copy of any material contract of the investment fund not previously filed, or any amendment to any material contract of the investment fund not previously filed

 

(a) with the final prospectus of the investment fund; or

 

(b) upon the execution of the material contract or amendment.

 

 

PART 16.1 - INVESTMENT FUND WEBSITE

 

Application

16.1.1                   This Part applies to an investment fund that is a reporting issuer.

 

Requirement to Have a Designated Website

16.1.2(1)               An investment fund must designate one qualifying website on which the fund intends to post disclosure as required by securities legislation.

 

16.1.2(2)               In this section, a “qualifying website” of an investment fund is a website that is

 

(a) publicly accessible, and

 

(b) established and maintained by the fund or on its behalf by one or more of the following persons:

 

(i) its investment fund manager;

 

(ii) a person or company designated by its investment fund manager.

 

16.1.2(3)               The designated website referred to in subsection (1) must be identified as the designated website in the following, as applicable:

 

(a) item 19.13 of Form 41-101F2, if the investment fund last distributed securities under a prospectus prepared in accordance with that form;

 

(b) item 2.18 of Part D of Form 41-101F3, if the scholarship plan last distributed securities under a prospectus prepared in accordance with that form;

 

(c) item 4.19 of Form 81-101F1, if the mutual fund last distributed securities under a prospectus prepared in accordance with that form;

 

(d) item 10.11 of Form 81-101F2, if the investment fund is required to file an annual information form under section 9.2 of this Instrument.

 

 

PART 17 – EXEMPTIONS

 

 

Exemption

17.1(1)                  The regulator or securities regulatory authority may grant an exemption from this Instrument, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption.

 

17.1(2)                  Despite subsection (1), in Ontario only the regulator may grant an exemption from any part of this Instrument.

 

 

PART 18 – EFFECTIVE DATE AND TRANSITION

 

 

Effective Date

18.1                      This Instrument comes into force on June 1, 2005.

 

18.2                      [Repealed]

 

18.3                      [Repealed]

 

18.4                      [Repealed]

 

18.5                      [Repealed]

 

Transition to IFRS

18.5.1(1)               For the first interim period in the financial year beginning on or after January 1, 2014, an investment fund must file, with its interim financial report for that interim period, an opening statement of financial position as at the date of transition to IFRS.

 

18.5.1(2)               For the first financial year beginning on or after January 1, 2014, an investment fund must file, with its annual financial statements for that financial year, an audited opening statement of financial position as at the date of transition to IFRS.

 

18.5.1(3)               Despite sections 3.1, 3.2, 3.3, 3.4 and 3.6, for financial years beginning before January 1, 2014, an investment fund may present line items and use terminology in its financial statements consistent with the immediately preceding financial year.

 

Securities Lending

18.5.2                   For financial years beginning before January 1, 2016, an investment fund is not required to comply with subsections 3.8(4) and (5).

 

Existing Exemptions

18.6(1)                  An investment fund that has obtained an exemption or waiver from, or approval under, securities legislation, National Policy 39, National Instrument 81-101 Mutual Fund Prospectus Disclosure, National Instrument 81-102 Investment Funds, Multilateral Instrument 81-104 Commodity Pools or National Instrument 81-105 Mutual Fund Sales Practices relating to its continuous disclosure obligations is exempt from any substantially similar provision of this Instrument to the same extent and on the same conditions, if any, as contained in the exemption, waiver or approval, unless the regulator or securities regulatory authority        has revoked that exemption, waiver or approval under authority provided to it in securities legislation.

 

18.6(2)                  An investment fund must, at the time that it first intends to rely on subsection (1) in connection with a filing requirement under this Instrument, inform the securities regulatory authority in writing of

 

(a) the general nature of the prior exemption, waiver or approval and the date on which it was granted; and

 

(b) the provision in respect of which the prior exemption, waiver or approval applied and the substantially similar provision of this Instrument.