Arrow Capital Management Inc. and Arrow EC Equity Advantage Alternative Fund

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted under subsection 62(5) of the Securities Act to permit the extension of a prospectus lapse date by 158 days to facilitate the consolidation of the funds' prospectus with the prospectus of different funds under common management -- no conditions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).

November 22, 2024

IN THE MATTER OF
THE SECURITIES LEGISLATION OF ONTARIO
(the Jurisdiction)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
ARROW CAPITAL MANAGEMENT INC.
(the Filer)

AND

IN THE MATTER OF
ARROW EC EQUITY ADVANTAGE ALTERNATIVE FUND
(the Fund)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that in accordance with subsection 62(5) of the Securities Act (Ontario)(the Act) and subsection 2.5(7) of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) that the time limit for the renewal of the simplified prospectus of the Fund dated December 31, 2023 (the December Prospectus) be extended to a time limit that would apply if the lapse date of the December Prospectus was June 7, 2025 (the Requested Relief).

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

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11- 102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in National Instrument 81-102 Investment Funds, National Instrument 14-101 Definitions, and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

The Filer

1. The Filer is a corporation existing under the laws of Ontario having its registered head office in Toronto, Ontario.

2. The Filer is the investment fund manager and portfolio manager of the Fund.

3. The Filer is registered in the following categories in the Jurisdictions as indicated below:

a) Ontario: Portfolio Manager (PM), Investment Fund Manager (IFM); Exempt Market Dealer (EMD) and Commodity Trading Manager under the Commodity Futures Act (Ontario);

b) Alberta: EMD;

c) British Columbia: EMD;

d) Quebec: EMD and IFM; and

e) Newfoundland and Labrador: IFM.

4. The Filer is not in default of securities legislation in any of the Jurisdictions.

The Fund

5. The Fund is an alternative mutual fund established under the laws of the Province of Ontario and is a reporting issuer in each of the Jurisdictions.

6. The Fund is not in default of applicable securities legislation in any of the Jurisdictions.

7. Securities of the Fund are qualified for distribution in the Jurisdictions using the December Prospectus, the Fund Facts and ETF Facts prepared in accordance with NI 81-101, each dated December 31, 2023.

8. The Fund currently distributes securities in the Jurisdictions under the December Prospectus. Series ETF units of the Fund trade on the Toronto Stock Exchange.

9. Pursuant to subsection 62(1) of the Act, the lapse date of the December Prospectus is December 31, 2024 (the Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Fund would have to cease on the Lapse Date unless: (i) the Fund files a pro forma prospectus at least 30 days prior to the applicable Lapse Date; (ii) the final prospectus is filed no later than 10 days after the applicable Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days of the applicable Lapse Date.

10. The Filer is the investment fund manager of certain other mutual funds (the June Funds) that currently distribute their securities to the public under a prospectus that has a lapse date of June 7, 2025 (the June Prospectus).

11. The Filer wishes to combine the December Prospectus with the June Prospectus given that the Fund and the June Funds share many common operational and administrative features, to allow investors to compare the features of the Fund and the June Funds more easily and in order to reduce renewal, printing and related costs of the Fund and the June Funds.

12. Offering the Fund and the June Funds under one prospectus would facilitate the distribution of the Fund in the Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer's fund platform. As the Fund and the June Funds are all managed by the Filer, offering them under one prospectus (as opposed to two) will allow investors to more easily compare their features.

Reasons for the Requested Relief

13. We submit that the policy purpose behind section 62 of the Act is to ensure that the information contained in the prospectus of an issuer that is in continuous distribution remains current.

14. There have been no material changes in the affairs of the Fund since the date of the December Prospectus. Accordingly, the December Prospectus and current Fund Facts and ETF Facts of the Fund represent current information regarding the Fund.

15. Given the disclosure obligations of the Fund, should a material change in the affairs of the Fund occur, the prospectus of the Fund and current Fund Facts and ETF Facts of the Fund will be amended as required under the Legislation.

16. New investors in the Fund will receive the most recently filed Fund Facts or ETF Facts of the Fund. The prospectus of the Fund will still be available upon request.

17. The Requested Relief will not affect the accuracy of the information contained in the prospectus of the Fund or the June Funds and will therefore not be prejudicial to the public interest or to the protection of the Fund's unitholders.

18. If the Requested Relief is not granted, it will be necessary for the Filer to renew the December Prospectus and the June Prospectus separately within a short period of time and it would be unreasonable for the Filer to incur the costs and expenses associated therewith, given investors would not be prejudiced by the Requested Relief.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted.

"Darren McKall"
Manager, Investment Management
Ontario Securities Commission

Application File #: 2024/0663

SEDAR+ File #: 6205841