Mackenzie Financial Corporation et al.
Headnote
NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from National Instrument 81-106 Investment Fund Continuous Disclosure to permit mutual funds that invest indirectly in money market funds to provide disclosure in annual and interim management reports of fund performance in a manner applicable to money market funds.
Applicable Legislative Provisions
National Instrument 81-106 Investment Fund Continuous Disclosure, Items 3.1, 4.1 and 4.3 of Form 81-106F1, Part B and s. 17.1.
September 2, 2008
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
MACKENZIE FINANCIAL CORPORATION
(the "Filer")
AND
IN THE MATTER OF
MACKENZIE SENTINEL CANADIAN
MANAGED YIELD POOL AND
MACKENZIE SENTINEL U.S.
MANAGED YIELD POOL
(together, the "MY Pools")
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the MY Pools for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for an exemption from the following requirements of National Instrument 81-106 Investment Fund Continuous Disclosure ("NI 81-106") in order to permit the MY Pools to present disclosure in its interim and annual management reports of fund performance in a manner applicable to money market funds:
1. Item 3.1 of Form 81-106F1, Part B to enable the MY Pools to provide only that disclosure applicable to money market funds;
2. Item 4.1 of Form 81-106F1, Part B to exempt the MY Pools from having to comply with paragraph 15.10(6)(a) of National Instrument 81-102 Mutual Funds ("NI 81-102"), provided that the MY Pools comply with paragraph 15.10(6)(b) of NI 81-102; and
3. Item 4.3 of Form 81-106F1, Part B to exempt the MY Pools from including annual compound returns
(collectively, the "Exemption Sought").
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island, Northwest Territories, Nunavut and Yukon.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the laws of Ontario. Its head office is in Toronto.
2. A preliminary simplified prospectus and annual information form (collectively, the "Preliminary Prospectus") has been filed in all the provinces and territories of Canada to qualify Series R shares of the MY Pools for distribution across Canada. However, investment in the MY Pools will only be available to other mutual funds managed by the Filer.
3. The Filer will act as the manager of the MY Pools.
4. The investment objective of the Mackenzie Sentinel Canadian Managed Yield Pool will be to provide tax-efficient returns similar to those of a Canadian money market fund managed by the Filer. It will achieve this objective by investing in equity securities and selling those equity securities to a counterparty by use of a forward contract with the price being equal to the return on Mackenzie Sentinel Canadian Money Market Pool (the "Canadian Underlying Fund").
5. The investment objective of the Mackenzie Sentinel U.S. Managed Yield Pool will be to provide tax-efficient returns similar to those of a U.S. money market fund managed by the Filer. It will achieve this objective by investing in equity securities and selling those equity securities to a counterparty by use of a forward contract with the price being equal to the return on Mackenzie Sentinel U.S. Money Market Pool (the "U.S. Underlying Fund").
6. The Canadian Underlying Fund and the U.S. Underlying Fund (collectively, the "Underlying Funds") will be managed by the Filer. The Preliminary Prospectus also seeks to qualify for distribution units of the Underlying Funds.
7. The Underlying Funds will be "money market funds" as defined in section 1.1 of NI 81-102.
8. The Filer, the MY Pools and the Underlying Funds are or will be reporting issuers in all of the provinces and territories of Canada and are not in default of any requirements of the securities legislation of those jurisdictions.
9. Because substantially all of the assets of each MY Pool will be invested in units of its Underlying Fund through the use of forward contracts, each MY Pool will not be a "money market fund" as defined in section 1.1 of NI 81-102.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make a decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.