R.E.G.A.R. Gestion Privée Inc.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from subsection 5.1(4) of NI 81-101 to permit simplified prospectus of alternative mutual funds to be consolidated with simplified prospectus of mutual funds that are not alternative mutual funds.
Applicable Legislative Provisions
National Instrument 81-101 Mutual Fund Prospectus Disclosure -- ss. 5.1(4) and 6.1(1).
[Original text in French]
February 6, 2023
IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the "Jurisdictions") AND THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND R.E.G.A.R. GESTION PRIVÉE INC. (the "Filer") AND RGP ALTERNATIVE INCOME PORTFOLIO (the "Existing Alternative Fund") AND THE ALTERNATIVE MUTUAL FUNDS ESTABLISHED IN THE FUTURE AND MANAGED BY THE FILER OR AN AFFILIATE OF THE FILER (the "Future Alternative Funds" and, Collectively with the "Existing Alternative Fund", the "Alternative Funds")
DECISION
Background
The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Makers") has received an application from the Filer on behalf of the Alternative Funds for a decision under the securities legislation of the Jurisdictions (the "Legislation") for an exemption pursuant to Section 6.1 of Regulation 81-101 respecting Mutual Fund Prospectus Disclosure, CQLR, c. V-1.1, r. 38 ("Regulation 81-101"), that grants relief to the Alternative Funds from the requirement in subsection 5.1(4) of Regulation 81-101, which states that a simplified prospectus for an alternative mutual fund must not be consolidated with a simplified prospectus of another mutual fund if the other mutual fund is not an alternative mutual fund, so that the simplified prospectus of one or more Alternative Funds can be consolidated with the simplified prospectus of one or more mutual funds existing today or created in the future (i) that are reporting issuers to which Regulation 81-101 and Regulation 81-102 respecting Investment Funds, CQLR, c. V-1.1, r. 39 ("Regulation 81-102") apply, (ii) that are not alternative mutual funds, and (iii) for which the Filer, or an affiliate of the Filer, acts or will act as the investment fund manager (the "Conventional Funds" and, collectively with the Alternative Funds, the "Funds") (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 subsection 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 in each of the provinces of Canada except the territories (together with Québec and Ontario, the "Canadian Jurisdictions"); 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 81-101, Regulation 81-102, Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3 and Regulation 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 established under the laws of Québec, and the head office of the Filer is in Quebec City, Québec.
2. The Filer is doing business under the name RGP Investments.
3. The Filer is, or will be, the investment fund manager of each of the Funds.
4. The Filer is registered as an investment fund manager in Québec, Ontario and Newfoundland and Labrador, and as a portfolio manager in Québec and Ontario.
5. The Filer is not in default of the securities legislation in any of the Canadian Jurisdictions.
The Funds
6. Each Alternative Fund is, or will be, established under the laws applicable in any Canadian Jurisdictions, as a mutual fund that is a trust or a class of shares of a mutual fund corporation and is or will be a reporting issuer in one or more of the Canadian Jurisdictions.
7. Each Conventional Fund is not, or will not be, an alternative mutual fund.
8. The Existing Alternative Fund is not in default of the securities legislation in any of the Canadian Jurisdictions.
9. The securities of each Fund are, or will be, qualified for distribution in one or more of the Canadian Jurisdictions using a simplified prospectus, and a fund fact prepared and filed in accordance with the securities legislation of such Canadian Jurisdictions.
10. The Filer wishes to combine the simplified prospectus of one or more Alternative Funds with the simplified prospectus of one or more Conventional Funds to reduce renewal, printing and other related costs. Offering the Alternative Funds using the same simplified prospectus as the Conventional Funds would facilitate the distribution of the Alternative Funds in the Canadian Jurisdictions under the same prospectus disclosure and enable the Filer to streamline disclosure across the Filer's fund platform.
11. Even though the Alternative Funds are, or will be, alternative mutual funds, they share, or will share, many common operational and administrative features with the Conventional Funds and combining them in the same simplified prospectus will allow investors to compare the features of the Alternative Funds and the Conventional Funds more easily.
12. The Filer may make changes to the features of the Funds as part of the renewal process of the simplified prospectus for the Conventional Funds. The ability to file the simplified prospectus of the Alternative Funds with the simplified prospectus of the Conventional Funds will allow the Filer to standardize the operational and administrative features of the Alternative Funds with those of the Conventional Funds, as appropriate.
13. Investors will continue to receive the fund facts when purchasing securities of the Alternative Funds or Conventional Funds as required by applicable securities legislation. The form and content of the fund facts of the Alternative Funds and Conventional Funds will not change as a result of the Exemption Sought. Investors will continue to receive, upon request, the simplified prospectus of the Alternative Funds and the Conventional Funds, as required by applicable securities legislation.
14. The Filer believes that the Exemption Sought is not prejudicial to the public interest and is in the best interests of the Alternative Funds and their securityholders.
15. Regulation 41-101 respecting General Prospectus Requirements, CQLR, c. V-1.1, r. 14 ("Regulation 41-101") does not contain a provision equivalent to subsection 5.1(4) of Regulation 81-101. Accordingly, an investment fund manager that manages exchange-traded funds (ETFs) is permitted to consolidate a prospectus under Regulation 41-101 for its ETFs that are alternative mutual funds with a prospectus for its ETFs that are conventional mutual funds. The Filer submits that there is no reason why mutual funds filing a prospectus under Regulation 81-101 should be treated differently from ETFs filing a prospectus under Regulation 41-101.
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 Funds
Autorité des marchés financiers