Pembroke Private Wealth Management Ltd. et al.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to funds for extension of the lapse date of prospectus -- Filer will incorporate a new fund into an existing prospectus that qualifies units of existing funds for distribution -- Extension of lapse date will not affect the currency or accuracy of the information contained in the prospectus.
Policy Statement 11-203 Process for Exemptive Relief Applications in Multiple Jurisdiction -- Regulation 11-102 respecting Passport System -- Relief granted to mutual funds for extension of the lapse date of their prospectuses -- Extension of the lapse date of the simplified prospectus until completion of mergers of the funds.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
[TRANSLATION]
March 24, 2022
IN THE MATTER OF THE SECURITIES LEGISLATION OF QUEBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF PEMBROKE PRIVATE WEALTH MANAGEMENT LTD. (the Filer) AND PEMBROKE MONEY MARKET FUND, PEMBROKE CANADIAN BOND FUND, PEMBROKE CORPORATE BOND FUND, PEMBROKE CANADIAN BALANCED FUND, PEMBROKE GLOBAL BALANCED FUND, PEMBROKE CANADIAN GROWTH FUND, PEMBROKE AMERICAN GROWTH FUND INC., PEMBROKE INTERNATIONAL GROWTH FUND AND PEMBROKE CONCENTRATED FUND (the Funds)
DECISION
Background
The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Maker") has received an application (the "Application") from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdictions (the "Legislation") allowing the Funds to extend the deadline for renewing the Funds' simplified prospectus, annual information form and fund facts documents (the "Current Prospectus Materials") as if the lapse date were April 25, 2022 (the "Exemption Sought")
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Autorité des marchés financiers is the principal regulator for this Application,
(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting Passport System, CQLR, c. V-1.1, r. 1 ("Regulation 11-102") is intended to be relied upon by the Filer in the following jurisdictions: Alberta, British Columbia, Prince Edward Island, Manitoba, New Brunswick, Nova Scotia, Saskatchewan and Newfoundland and Labrador (the "Notified Passport Jurisdictions" and collectively with the Jurisdictions, the Jurisdictions of Canada); and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Interpretation
Terms defined in Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3, Regulation 11-102, Regulation 81-101 respecting mutual fund prospectus disclosure, CQLR, c. V-1.1, r. 38 ("Regulation 81-101"), Regulation 81-102 respecting Investment Funds, CQLR, c. V-1.1, r. 39 ("Regulation 81-102") 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 the investment fund manager, promoter and trustee of each of the Funds.
2. The Filer is a corporation governed by the laws of Canada with its head office in Montréal, Québec.
3. The Filer acts as the investment fund manager of the Funds and is registered as an investment fund manager in Quebec, Ontario and Newfoundland and Labrador.
The Funds
4. Each of the Funds is an open-end mutual fund trust established by way of a declaration of trust governed by the laws of the Province of Ontario, except for Pembroke American Growth Fund Inc. which is an open-end mutual fund corporation governed by the laws of Canada.
5. The securities of each of the Funds are distributed under the Current Prospectus Materials dated March 25, 2021 prepared in accordance with Regulation 81-101 and filed in the Jurisdictions of Canada.
6. Each Fund is therefore a reporting issuer or equivalent thereof in the Jurisdictions of Canada.
7. Neither the Filer nor the Funds are in default of securities legislation in any of the Jurisdictions of Canada.
8. The lapse date of the Current Prospectus Materials is March 25, 2022 (the "Current Lapse Date"). Accordingly, pursuant to paragraph 62(2) of the Securities Act (Ontario) and Section 2.5 of Regulation 81-101, the distribution of securities of each Fund must not continue after the Current Lapse Date unless: (i) a pro forma simplified prospectus is filed not less than 30 days before the Current Lapse Date (i.e. February 23, 2022); (ii) a new final simplified prospectus is filed no later than 10 days after the Current Lapse Date (i.e. April 4, 2022); and (iii) a receipt for the new final simplified prospectus is obtained within 20 days of the Current Lapse Date (i.e. April 14, 2022).
9. The Filer filed a pro forma simplified prospectus for each of the Funds more than 30 days before the Current Lapse Date, which has been done on February 23,2022.
New fund
10. On March 1, 2022, the Filer created a new mutual fund named Pembroke Canadian All Cap Fund governed by Regulation 81-102 (the "New Fund"). The New Fund was previously an open-end mutual fund trust named Pembroke Canadian All Cap Pooled Fund whose units were distributed to investors on a prospectus-exempt basis in accordance with Regulation 45-106 respecting Prospectus and Registration Exemptions.
11. On March 2, 2022, the Filer filed a preliminary and pro forma prospectus and preliminary and pro forma annual information form for the Funds and for the New Fund as well as preliminary fund facts for the New Fund for review by the Decision Makers. (the "2022 Prospectus Materials")
12. On the same date, the Filer filed an exemption application with the Decision Makers for a decision pursuant to section 19.1 of Regulation 81-102 and section 6.1 of Regulation 81-101 to be authorized to present the performance data of the New Fund for the time period since it commenced operations, before it became a reporting issuer, in sales communications and fund facts (the "Past Performance Exemption Application").
Submissions for the Exemption Sought
13. The Filer wishes to offer the securities of the Funds and the New Fund, under one combined simplified prospectus in order to reduce renewal and related costs. Offering the securities of the Funds and the New Fund under one combined simplified prospectus, annual information form and fund facts would facilitate the distribution of the securities of the Funds and the New Fund in the Jurisdictions of Canada under the same prospectus and enable the Filer to streamline disclosure across the Funds and the New Fund. As the Funds and the New Fund are managed by the Filer, offering the securities of the Funds and the New Fund under the same combined simplified prospectus will allow investors to compare their features more easily.
14. In addition, the Filer wishes to extend the Current Lapse Date to April 25, 2022 to allow sufficient time to address adequately all additional comments of the Decision Makers on the 2022 Prospectus Materials, to receive the decision from each of the Decision Makers with regards to the Past Performance Exemption Application and to prepare the final prospectus, annual information form and fund facts documents for each Fund and the New Fund accordingly.
15. The Exemption Sought will permit the renewal simplified prospectus of the Funds to include the New Fund.
16. Given the Current Lapse Date, an extension of the Current Lapse Date to April 25, 2022 is minimal and does not represent a disadvantage to unitholders of the Funds.
17. Since the Current Prospectus Materials, there have been no material changes to the Funds that have not been disclosed. Accordingly, the Current Prospectus Materials continue to contain accurate information.
18. Given the disclosure obligations of the Filer and the Funds, should any material changes in the affairs of the Funds occur, the Current Prospectus Materials will be amended accordingly.
19. New investors in the Funds will receive delivery of the most recently filed fund facts documents of the Funds. The Current Prospectus Materials will remain available to investors upon request.
20. The Filer Submits the Exemption Sought will not impair the reliability and accuracy of the information presented in the Current Prospectus Materials and is not prejudicial to the public interest.
Decision
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.
"Frédéric Belleau"
Senior Director Investment Fund