Northwest Mutual Funds Inc. et al. - MRRS Decision

Headnote

Exemption from the requirement to deliver comparativeannual financial statements for certain year-end dates to registeredsecurityholders of certain mutual funds.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., ss. 79 and 80(b)(iii).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, SASKATCHEWAN, MANITOBA,

ONTARIO, QUEBEC, NOVA SCOTIAand NEWFOUNDLAND AND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

THE FUNDS LISTED IN SCHEDULE"A"

(the "Funds")

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatoryauthority or regulator (the "Decision Maker") in eachof the Provinces of Alberta, Saskatchewan, Manitoba, Ontario,Québec, Nova Scotia, Newfoundland and Labrador (the "Jurisdictions")has received an application (the "Application") fromNorthwest Mutual Funds Inc., MD Funds Management Inc., MD PrivateTrust Company and BMO Investments Inc. (collectively the "Managers")and the Funds for a decision pursuant to the securities legislationof the Jurisdictions (the "Legislation") for relieffrom the requirement to deliver an annual report, where applicableand comparative annual financial statements of the Funds tocertain securityholders of the Funds unless they have requestedto receive them;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS it has been represented bythe Managers to the Decision Makers that:

(a) The Funds are either open-ended mutualfund trusts or separate classes of mutual fund corporationsgoverned by the laws of a Jurisdiction.

(b) Each Manager acts as manager of theFunds set out in Schedule "A" and, in the caseof its Funds which are trusts, unless otherwise indicatedon Schedule "A", it is the trustee of such Funds.

(c) The Funds are reporting issuers in eachof the Jurisdictions.

(d) Securities of the Funds are presentlyoffered for sale on a continuous basis in provinces andterritories of Canada pursuant to a simplified prospectus.

(e) Each of the Funds is required to deliverannually, within 140 days of its financial year-end, toeach holder of its securities ("Securityholders"),an annual report, where applicable and comparative financialstatements in the prescribed form pursuant to the Legislation.

(f) Each Manager will send to Securityholderswho hold securities of the Funds in client name (whetheror not the Manager is the dealer) (the "Direct Securityholders")in each year, a notice advising them that they will notreceive the annual report, where applicable and annual financialstatements of the Funds for the year then ended unless theyrequest same, and providing them with a request form tosend back, by fax or prepaid mail, if they wish to receivethe annual report and annual financial statements. The noticewill advise the Direct Securityholders where the annualreport and annual financial statements can be found on thewebsites listed in Schedule "A" (including onthe SEDAR website) and downloaded. Each Manager would sendsuch annual report and financial statements to any DirectSecurityholder who requests them in response to such noticeor who subsequently requests them.

(g) Securityholders who hold their securitiesin the Funds through a nominee will be dealt with pursuantto National Instrument 54-101.

(h) Securityholders will be able to accessannual reports and annual financial statements of the Fundseither on the SEDAR website or on the relevant website ofthe Manager or by calling the Manager's toll-free phoneline listed in Schedule "A". Top ten holdingswhich are updated on a periodic basis as listed in Schedule"A" will also be accessible to Securityholderson each Manager's website or by calling the Manager's toll-freeline.

(i) There would be substantial cost savingsif the Funds are not required to print and mail annual reports,where applicable and annual financial statements to thoseDirect Securityholders who do not want them.

(j) The Canadian Securities Administrators("CSA") have published for comment proposed NationalInstrument 81-106 ("NI 81-106") which, among otherthings, would permit a Fund not to deliver annual financialstatements to those of its Securityholders who do not requestthem, if the Funds provide each Securityholder with a requestform under which the Securityholder may request, at no costto the Securityholder, to receive the mutual fund's annualfinancial statements for that financial year.

(k) NI 81-106 would also require a Fundto have a toll-free telephone number for or accept collectcalls from persons or companies that want to receive a copyof, among other things, the annual financial statementsof the Fund.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersare satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

AND WHEREAS the Decision Makers are satisfiedthat making the Decision will not adversely affect the rule-makingprocess with respect to proposed National Instrument 81-106and is consistent with National Instrument 54-101;

THE DECISION of the Decision Makers pursuantto the Legislation is that for each Manager:

(i) the Funds; and

(ii) mutual funds created subsequent tothe date of the application, January 27, 2003, that areoffered by way of simplified prospectus and managed bythe Manager,

shall not be required to deliver their annualreport, where applicable and comparative annual financial statementsfor the year ended December 31, 2002, or for such other year-enddate specified in Schedule "A", to their Direct Securityholdersother than those Direct Securityholders who have requested toreceive them provided that:

(a) the Managers shall file on SEDAR, underthe annual financial statements category, confirmation ofmailing of the request forms that have been sent to theDirect Securityholders as described in clause (f) of therepresentations within 90 days of mailing the request forms;

(b) the Managers shall file on SEDAR, underthe annual financial statements category, information regardingthe number and percentage of requests for annual reportsand annual financial statements made by the return of therequest forms, on a province-by-province basis within 30days after the end of each quarterly period beginning fromthe date of mailing the request forms and ending 12 monthsfrom the date of mailing;

(c) the Managers shall record the numberand summary of complaints received from Direct Securityholdersabout not receiving the annual report and annual financialstatements and shall file on SEDAR, under the annual financialstatements category, this information within 30 days afterthe end of each quarterly period beginning from the dateof mailing the request forms and ending 12 months from thedate of mailing;

(d) the Managers shall, if possible, measurethe number of "hits" on the annual report andannual financial statements of the Funds on the Manager'swebsite and shall file on SEDAR, under the annual financialstatements category, this information within 30 days afterthe end of each quarterly period beginning from the dateof mailing the request forms and ending 12 months from thedate of mailing; and

(e) the Managers shall file on SEDAR, underthe annual financial statements category, estimates of thecost savings resulting from the granting of this Decisionwithin 90 days of mailing the request forms.

March 4, 2003.

"H. Lorne Morphy"                    "RobertL. Shirriff"

SCHEDULE "A" toMRRS DECISION DOCUMENT

LIST OF APPLICANT MANAGERSAND THEIR FUNDS

1. Northwest Mutual Funds Inc.

55 University Avenue

Suite 715

Toronto, Ontario

M5J 2H7

 

Year End:    December 31,2002

Toll Free:     (888)809-3333

Website: www.northwestfunds.com

Top Ten Holdings:     updatedbi-monthly

 

Northwest Money Market Fund

Northwest Balanced Fund

Northwest Growth Fund

Northwest International Fund

Northwest RSP International Fund

Northwest Specialty Equity Fund

Northwest Specialty Resource Fund

Northwest Specialty High Yield Bond Fund

 

2. MD Funds Management Inc.

1870 Alta Vista Drive

Ottawa, Ontario

K1G 6R7

 

Year End: December 31, 2002

Toll Free: (800) 267-2332

Website: www.cma.ca

Top Ten Holdings: updated monthly

 

MD Balanced Fund

MD Bond Fund

MD Bond and Mortgage Fund

MD Dividend Fund

MD Equity Fund

MD Global Bond Fund

MD Global Equity RSP Fund

MD Growth Investments Limited

MD Growth RSP Fund

MD Money Fund

MD Select Fund

MD US Large Cap Growth Fund

MD US Large Cap Growth RSP Fund

MD International Growth Fund

MD International Growth RSP Fund

MD US Large Cap Value Fund

MD US Large Cap Value RSP Fund

MD US Small Cap Growth Fund

 

3. MD Private Trust Company

1870 Alta Vista Drive

Ottawa, Ontario

K1G 6R7

 

Year End: December 31, 2002

Toll Free: (800) 267-2332

Website: www.cma.ca

Top Ten Holdings: updated monthly

 

MDPIM Canadian Equity Pool (formerly MDCanadian Tax Managed Pool) (Class "A" and "PrivateTrust Class" units)

MDPIM US Equity Pool (formerly MD US TaxManaged Pool) (Class "A" and "Private TrustClass" Units)

 

4. BMO Investments Inc.

77 King Street West

Suite 4200

Toronto, Ontario

M5K 1J5

 

or

 

BMO Investissements Inc.

630 Réné-Lévesque Blvd.W.

1st floor

Montréal, Québec

H3B 1S6

 

Year End: September 30, 2003

Toll Free: (800) 665-7700 or (888) 636-6376(in Quebec)

Website: http://www.bmo.com/mutualfunds(in English) or http://www.bmo.com/fonds (en français)

Top Ten Holdings: updated monthly

The Funds have a board of independent trustees(independent directors with respect to the corporate funds),as follows:

Peter Greer Beattie, Q.C.

Toronto, Ontario

Carol Mary Lascelles Gault

Calgary, Alberta

 

Kenneth Whyte McArthur

Toronto, Ontario

 

Charles William White, Q.C.

St. John's, Newfoundland

 

Rafe Jamie Plant

Abercorn, Québec

 

Louise Vaillancourt-Châtillon

Saint-Lambert, Québec

BMO Security Funds

BMO T-Bill Fund

BMO Money Market Fund

BMO AIR MILES^®† MoneyMarket Fund

BMO Premium Money Market Fund

 

BMO Income Funds

BMO Mortgage Fund

BMO Bond Fund

BMO Monthly Income Fund

BMO Global Bond Fund

BMO International Bond Fund

 

BMO Growth Funds

BMO Asset Allocation Fund

BMO RSP Global Balanced Fund

BMO Dividend Fund

BMO Equity Index Fund

BMO Equity Fund

BMO RSP U.S. Equity Index Fund

BMO U.S. Growth Fund

BMO U.S. Value Fund

BMO RSP International Index Fund

BMO International Equity Fund

BMO NAFTA Advantage Fund

BMO European Fund

BMO RSP European Fund

BMO Japanese Fund

BMO RSP Japanese Fund

 

BMO AGGRESSIVE GROWTH FUNDS

BMO Special Equity Fund

BMO U.S. Special Equity Fund

BMO RSP Global Opportunities Fund

BMO RSP Global Financial Services Fund

BMO Resource Fund

BMO Precious Metals Fund

BMO RSP Nasdaq^® Index Fund

BMO Global Science & Technology Fund

BMO RSP Global Science & TechnologyFund

BMO RSP Global Health Sciences Fund

BMO RSP Global Technology Fund

BMO Emerging Markets Fund

BMO Far East Fund

BMO Latin American Fund

 

BMO U.S. Dollar Funds

BMO U.S. Dollar Money Market Fund

BMO U.S. Dollar Bond Fund

BMO U.S. Dollar Equity Index Fund

 

BMO Global Tax Advantage Funds{±}

BMO Short-Term Income Class

BMO Global Balanced Class

BMO Global Opportunities Class

BMO Global Financial Services Class

BMO Global Health Sciences Class

BMO Global Technology Class

{±}All funds within this category are part of BMO Global Tax AdvantageFunds Inc., a mutual fund corporation