CI Investments Inc. and Trident Global Opportunities Fund
Headnote
Mutual fund in Ontario (non-reporting issuer) granted extension of the annual financial statement filing and delivery deadlines as substantially invested in offshore investment fund subject to different reporting requirements.
Rules Cited
National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 2.2, 5.1(2).
February 15, 2008
IN THE MATTER OF
NATIONAL INSTRUMENT 81-106
INVESTMENT FUND CONTINUOUS DISCLOSURE
AND
IN THE MATTER OF
CI INVESTMENTS INC.
(the Filer)
AND
IN THE MATTER OF
TRIDENT GLOBAL OPPORTUNITIES FUND
(the Fund)
ORDER
Background
The Ontario Securities Commission received an application from the Filer, on behalf of the Fund, for a decision pursuant to section 17.1 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) exempting the Fund from:
(a) the requirement in section 2.2 of NI 81-106 that the Fund file its audited annual financial statements on or before the 90th day after its most recently completed financial year (the Filing Deadline); and
(b) the requirement in subsection 5.1(2) of NI 81-106 that the Fund deliver its audited annual financial statements to securityholders by the Filing Deadline (the Delivery Requirement).
Representations
This Order is based on the following facts represented by the Filer:
1. The Filer is a corporation subsisting under the Business Corporations Act (Ontario) and has its registered office at 2 Queen Street East, Twentieth Floor, Toronto, Ontario M5C 3G7.
2. The Filer is registered under the Securities Act (Ontario) as an advisor in the categories of investment counsel and portfolio manager, and as a limited market dealer under the Securities Act (Ontario) and the Securities Act (Newfoundland and Labrador). The Filer also is registered as a commodity trading manager under the Commodity Futures Act (Ontario).
3. The Fund offers its units to investors pursuant to exemptions from the prospectus requirements under applicable Canadian securities laws.
4. The Fund's investment objective is to generate superior risk adjusted long-term rates of return through investments in global securities. To achieve its investment objective, the Fund's principal investment strategy is to obtain exposure to the returns of Vardana International Ltd. (Vardana International) through one or more derivative instruments (Derivatives).
5. Vardana International is an exempted company incorporated under the laws of the Cayman Islands. Vardana International is currently a shareholder of, and invests substantially all of its assets in, Vardana Fund Ltd. (the Vardana Fund), another exempted company incorporated under the laws of the Cayman Islands. The investment objective of the Vardana Fund is to achieve superior risk-adjusted long term rates of return by investing with a top-down, macro methodology in global securities.
6. Other than cash to provide short-term liquidity or that is pending investment in Derivatives, the Fund exposes substantially all of its assets to the returns of Vardana International. The Filer expects that the Fund will continue to expose substantially all of its net assets to the returns of Vardana International until such time as Vardana International no longer represents a suitable investment for the Fund.
7. Both the Fund and Vardana International have a fiscal year-end of December 31.
8. The Filer has been advised by Vardana International that Vardana International will not have completed its 2007 audited annual financial statements until June 30, 2008 and is not required by law to complete its audited annual financial statements prior to such date. The Filer expects this timing delay in the completion and receipt of audited annual financial statements from Vardana International to occur year after year for the foreseeable future.
9. The auditor of the Fund has indicated that in order to complete its audit of the Fund, the auditor needs to confirm the completion of the audit of Vardana International so that proper assessments can be made with respect to valuations. As a result, the Fund's auditor will not provide an audit opinion on the Fund's annual financial statements unless the auditor receives the audited annual financial statements of Vardana International.
10. Sections 2.2 and 5.1(2), together, of NI 81-106 require the Fund to file and deliver its annual audited financial statements generally by March 31 of the following year.
11. The Fund will not be able to meet the Filing Deadline and will not be able to comply with the Delivery Requirement.
12. The Filer anticipates that it will receive no complaints from securityholders of the Fund with respect to the delay in delivering the financial statements of the Fund.
13. The Fund will notify its securityholders that it has received and intends to rely on relief from the Filing Deadline and the Delivery Requirement.
14. The Fund will include a note in the offering memorandum of the Fund, if any, that it has received and intends to rely on relief from the Filing Deadline and the Delivery Requirement.
Order
The Director is satisfied that it would not be prejudicial to the public interest to grant the requested relief and orders that the Fund is exempt from the requirement to file its annual audited financial statements by the Filing Deadline and from the Delivery Requirement, provided that the audited annual financial statements are filed and delivered by June 30 of the year following the financial year for which the audited annual financial statements are prepared.
Nothing in this Order precludes the Fund from relying on the exemption contained in section 2.11 of NI 81-106 with respect to the audited financial statements for any given year provided the audited financial statements are delivered by the deadline specified above.