Viewpoint Investment Partners Corporation and the Funds

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Alternative mutual funds granted relief from section 2.9.1 of National Instrument 81-102 Investment Funds to permit the use of Value at Risk (VaR) to calculate exposure -- VaR limited to 20% of NAV -- Relief granted from section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure for the purposes of relief requested from Item 3 of Part I of Form 81-101F3 Contents of Fund Facts Document and Item 4 of Part B of Form 81-101F1 Contents of Simplified Prospectus to exempt the mutual fund from the requirement to disclose its maximum aggregate exposure to leverage as calculated pursuant to Section 2.9.1 of NI 81-102 -- Relief subject to conditions including the establishment of a derivatives risk management program and use of third-party verification of VaR calculations.

Relief granted from margin deposit limit contained in paragraphs 6.8(1) and 6.8(2)(c) of National Instrument 81-102 to invest in specified futures -- the Filer will use dealers in Canada and the United States -- conditional on the amount of margin deposited not exceeding 35% of the net assets of the fund with any one dealer and 70% of the net assets of the funds on all margin deposited with all dealers being held in segregated accounts.

Relief granted from 15.3(2), 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1), and 15.8(3)(a.1) of NI 81-102 to permit an alternative mutual fund, that has not distributed securities under a simplified prospectus in a jurisdiction for 12 consecutive months, to include in their sales communications performance data for the period when the fund was not a reporting issuer -- Relief granted from section 15.1.1 of NI 81-102 to permit a mutual fund to use performance data from periods prior the fund being a reporting issuer in calculating fund's investment risk level in accordance with Appendix F Investment Risk Classification Methodology to NI 81-102 and to disclose the risk level in the fund facts and ETF Facts -- Relief granted from section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure for the purposes of relief requested from (i) Item 4 and 5 of Part I of Form 81-101F3 Contents of Fund Facts Document, to permit the mutual fund to disclose in its fund facts the risk level calculated in accordance with the relief granted from NI 81-102 and to include in its fund facts the past performance data for the periods when the fund was not a reporting issuer, and (ii) Item 10(b) of Part B of Form 81-101F1 Contents of Simplified Prospectus to permit the mutual fund to disclose the risk level methodology used in accordance with relief from NI 81-102 -- Relief subject to conditions.

Relief granted from section 4.4 of National Instrument 81-106 Investment Fund Continuous Disclosure for the purposes of the relief requested from Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance, Items 3.1(7), 4.1(1), 4.1(2), 4.2(1), 4.3(1) and 4.3(2) of Part B of Form 81-106F1, and Items 3(1) and 4 of Part C of Form 81-106F1, to permit a mutual fund to include in annual and interim management reports of fund performance the financial highlights and past performance of the fund that are derived from the fund's annual financial statements that pertain to time periods when the fund was not a reporting issuer -- Relief subject to conditions.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 2.9.1, 6.8(1), 6.8(2)(c), 15.3(2), 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1), 15.8(3)(a.1), 15.1.1 and 19.1.

National Instrument 81-101 Investment Fund Prospectus Disclosure, ss. 2.1 and 6.1.

Form 81-101F1 Contents of Simplified Prospectus, Items 4 and 10(b) of Part B.

Form 81-101F3 Contents of Fund Facts Document, Item 3, 4 and 5 of Part I.

National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 4.4 and 17.1.

Form 81-0106F1 Contents of Annual and Interim Management Report of Fund Performance, Items 3.1(7), 4.1(1), 4.1(2), 4.2(1), 4.3(1) and 4.3(2) of Part B and Items 3(1) and 4 of Part C.

Citation: Re Viewpoint Investment Partners Corporation, 2023 ABASC 140

October 2, 2023

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF VIEWPOINT INVESTMENT PARTNERS CORPORATION (the Filer) AND IN THE MATTER OF THE FUNDS (defined below)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each, a Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) to grant the Filer, Viewpoint Global Multi-Asset Trust (VGMAT), Viewpoint Enhanced Global Multi-Asset Trust (VEGMAT) and Viewpoint Diversified Commodities Trust (VDCT, and together with VGMAT and VEGMAT, the Funds and individually, a Fund) exemptive relief from

Margin

(a) the requirements of

(i) subsection 6.8(1) of NI 81-102, which restricts an investment fund from depositing portfolio assets as margin with a member of a regulated clearing agency or dealer that is a member of a self-regulatory organization that is a participating member of the Canadian Investor Protection Fund (CIPF) for a transaction in Canada involving certain specified derivatives in excess of 10% of the net asset value (NAV) of the investment fund as at the time of deposit; and

(ii) paragraph 6.8(2)(c) of NI 81-102, which restricts an investment fund from depositing portfolio assets as margin with a member of a regulated clearing agency or dealer for a transaction outside of Canada involving certain specified derivatives in excess of 10% of the NAV of the investment fund as at the time of deposit;

to permit each Fund to deposit as margin portfolio assets of up to 35% of the Fund's NAV as at the time of deposit with any one futures commission merchant in Canada or the United States (each a Dealer) and up to 70% of the Fund's NAV as at the time of deposit with all Dealers in the aggregate, in each case for transactions in standardized futures (the Margin Deposit Relief);

Leverage

(b) the requirements of

(i) section 2.9.1 of NI 81-102, which limits an alternative mutual fund's aggregate exposure to cash borrowing, short selling and specified derivatives transactions to 300% of the fund's NAV; and

(ii) item 4 and instruction (4) of Part B of Form 81-101F1 Contents of Simplified Prospectus (Form 81-101F1) and item 3 of Part I of Form 81-101F3 Contents of Fund Facts Document (Form 81-101F3), which all require an alternative mutual fund to disclose its maximum aggregate exposure to leverage as calculated pursuant to section 2.9.1 of NI 81-102

(the Leverage Relief);

Performance

(c) the requirements of

(i) subsection 15.3(2), paragraph 15.3(4)(c), subparagraph 15.6(1)(a)(i), and paragraphs 15.6(1)(d), 15.8(2)(a.1) and 15.8(3)(a.1) of NI 81-102, to permit each Fund to include its past performance data in sales communications notwithstanding that the past performance data will relate to a period prior to that Fund offering its units under a simplified prospectus (the past performance data);

(ii) paragraph 15.1.1(a) of NI 81-102 and items 2 and 4 of Appendix F Investment Risk Classification Methodology to NI 81-102 (the Risk Classification Methodology) to permit each Fund to include its past performance data in determining its investment risk level in accordance with the Risk Classification Methodology;

(iii) paragraph 15.1.1(b) of NI 81-102, and item 4(2)(a) and instruction (1) of item 4 of Form 81-101F3, to permit each Fund to disclose its investment risk level as determined by including its past performance data in accordance with the Risk Classification Methodology;

(iv) item 10(b) of Part B of Form 81-101F1, to permit each Fund to use its past performance data to calculate its investment risk rating in its simplified prospectus;

(v) items 5(2), 5(3) and 5(4) and instruction (1) of Part I of Form 81-101F3 in respect of the requirement to comply with subsection 15.3(2), paragraph 15.3(4)(c), subparagraph 15.6(1)(a)(i) and paragraphs 15.6(1)(d), 15.8(2)(a.1) and 15.8(3)(a.1) of NI 81-102, to permit each Fund to include in its fund facts document the past performance data of that Fund notwithstanding that such performance data relates to a period prior to that Fund offering its units under a simplified prospectus and that such Fund has not distributed its units under a simplified prospectus for 12 consecutive months;

(vi) section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) for the purposes of the relief requested from Form 81-101F1 and Form 81-101F3;

(vii) items 3.1(7), 4.1(1) (in respect of the requirement to comply with subsection 15.3(2) and paragraph 15.3(4)(c) of NI 81-102), 4.1(2), 4.2(1), 4.3(1) and 4.3(2) of Part B of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance (Form 81-106F1), and items 3(1) and 4 of Part C of Form 81-106F1 to permit each Fund to include in its annual and interim management reports of fund performance (MRFP) the past performance data and financial highlights of that Fund notwithstanding that such performance data and financial highlights relate to a period prior to that Fund offering its units under a simplified prospectus; and

(viii) Section 4.4 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) for the purposes of relief requested herein from Form 81-106F1;

(the Performance Relief, and together with the Margin Deposit Relief and Leverage Relief, the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Alberta Securities Commission is the principal regulator for this application (the Principal Regulator);

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the provinces and territories of Canada other than Alberta and Ontario; and

(c) this 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 National Instrument 14-101 Definitions, MI 11-102 and NI 81-102 have the same meaning if used in this decision, unless otherwise defined. The following terms have the following meanings:

1. CFTC means the Commodity Futures Trading Commission;

2. DSRO means a designated self-regulatory organization;

3. NFA means the National Futures Association; and

4. U.S. Dealer means a Dealer located in the United States of America.

Representations

This decision is based on the following facts represented by the Filer:

The Filer and the Funds

1. The Filer is a corporation existing under the laws of the Province of Alberta. The head office of the Filer is located in Calgary, Alberta.

2. The Filer is registered:

(a) as an adviser in the category of portfolio manager under the securities legislation of each of Alberta, British Columbia, Ontario and Saskatchewan;

(b) as a dealer in the category of exempt market dealer under the securities legislation of each of Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan; and

(c) as an investment fund manager under the securities legislation of each of Alberta, Ontario and Québec. The Filer will be applying for registration as an investment fund manager in Newfoundland and Labrador. The Filer will not accept purchase orders from investors resident in Newfoundland and Labrador until such registration is obtained.

3. The Filer or an affiliate of the Filer is the investment fund manager of the Funds. The Filer or an affiliate of the Filer is also the portfolio manager or sub-advisor of the Funds.

4. Each Fund is a mutual fund created under the laws of the Province of Alberta. Each Fund is an "alternative mutual fund" within the meaning of NI 81-102.

5. VGMAT is a trust created under the laws of the Province of Alberta. It was formed on December 22, 2016. Prior to February 21, 2023, VGMAT was named "Viewpoint Global Asset Allocation Trust".

6. VEGMAT is a trust created under the laws of the Province of Alberta. It was formed on March 10, 2021. Prior to February 21, 2023, VEGMAT was named "Viewpoint Global Risk Parity Trust".

7. VDCT is a trust created under the laws of the Province of Alberta. It was formed on March 21, 2022. Prior to February 21, 2023, VDCT was named "Viewpoint Commodities Trust".

8. The investment objective of VGMAT is to achieve long-term capital appreciation with similar volatility to a global balanced mandate by investing in a diversified portfolio of global equities, global bonds, commodities, foreign currencies, and any derivatives that may be necessary for the Fund to achieve its investment objective.

9. The investment objective of VEGMAT is to achieve long-term capital appreciation by matching or exceeding global equity returns at a comparable level of volatility by investing in a diversified portfolio of global equities, global bonds, commodities, foreign currencies, and any derivatives that may be necessary for the Fund to achieve its investment objective.

10. The investment objective of VDCT is to provide liquid, efficient, and intelligent access to global commodity markets by investing primarily in futures contracts. The Fund seeks to capture diverse sources of inflation and commodity demand, and when added to a conventional investment portfolio, may increase overall portfolio diversification and provide protection against inflation.

11. The investment strategies of each Fund permit the Fund to enter into specified derivative transactions, including long and short positions in specified derivatives. These specified derivatives may be used for purposes of hedging, efficient portfolio management and/or investment purposes.

12. Securities of each Fund will be qualified for distribution pursuant to a prospectus that will be prepared and filed in accordance with the securities legislation of one or more of the provinces and/or territories of Canada. Accordingly, each Fund will be a reporting issuer or the equivalent in one or more of the provinces and/or territories of Canada and will be subject to the provisions of NI 81-102, subject to any relief therefrom granted by the securities regulatory authorities.

13. The Filer and the Funds are not in default of securities legislation in any Jurisdiction.

Margin Deposit Relief

14. To seek to achieve its investment objectives, a Fund may engage in specified derivative transactions in Canada and outside of Canada.

15. The investment strategies of each Fund will, except to the extent that the Exemption Sought is granted and other exemptive relief is applicable, be limited to the investment practices permitted by NI 81-102. Any use of leverage by a Fund will be in accordance with the applicable investment objectives, strategies and restrictions of the Fund.

16. The Filer is authorized to establish, maintain, change and close brokerage accounts on behalf of each Fund. In order to facilitate specified derivative transactions on behalf of each Fund, the Filer has established or will establish one or more accounts (each an Account) with one or more Dealers.

17. Each U.S. Dealer is regulated by the CFTC and the NFA in the United States, and is required to segregate all assets held on behalf of clients, including the Funds. Each U.S. Dealer is subject to regulatory audit and must have insurance to guard against employee fraud. Each U.S. Dealer has a net worth, determined from its most recent audited financial statements, in excess of the equivalent of C$50 million. Each U.S. Dealer has an exchange assigned to it as its DSRO. As a member of a DSRO, each U.S. Dealer must meet capital requirements, comply with the conduct rules of the CFTC, NFA and its DSRO, and participate in an arbitration process with a complainant.

18. Each Dealer is a member of the clearing corporations and exchanges that the standardized futures in the portfolios of the Funds are primarily traded through. Each Canadian Dealer will be a member of a regulated clearing agency or dealer that is a member of a self-regulatory organization that is a participating member of the CIPF. Each clearing corporation is obliged to apply its surplus funds and the security deposits of its members to reimburse clients of failed members.

19. A Dealer will require, for each Account established for a Fund, that portfolio assets of the Fund be deposited with the Dealer as collateral for specified derivative transactions (Initial Margin). Initial Margin represents the minimum initial amount of portfolio assets that must be deposited with a Dealer to initiate trading in specified derivatives transactions or to maintain the Dealer's open position in standardized futures.

20. Levels of Initial Margin are established at a Dealer's discretion. At no time will more than 70% of the NAV of a Fund be deposited as Initial Margin with Dealers in the aggregate.

21. Each Dealer is required to hold all Initial Margin, including cash and government securities, in segregated accounts and the Initial Margin will not be available to satisfy claims against the Dealer made by creditors of the Dealer.

22. The use of Initial Margin is an essential element of investing in standardized futures for the Funds.

23. The Margin Deposit Relief would allow a Fund to invest in standardized futures more extensively with any one Dealer, which would allow the Fund to pursue its investment strategies more efficiently and flexibly.

24. Opening Accounts and transacting with multiple Dealers adds complexity and cost to the management of a Fund. Using fewer Dealers will considerably simplify a Fund's investment and operations and will reduce the cost of implementing the Fund's strategy. Using fewer Dealers also simplifies compliance and risk management, as monitoring the data, controls and policies of a smaller number of Dealers is less complex.

Leverage Relief

25. A Fund may use a combination of short selling and specified derivatives that at times results in the Fund's aggregate exposure to cash borrowing, short selling and specified derivatives transactions exceeding 300% of the Fund's NAV, but in a manner that does not expose the Fund to an inappropriate level of leverage risk.

26. The correlations of most alternative investment strategies to equity benchmarks such as the S&P 500 are high. In contrast, the Funds construct a diversified portfolio of assets and then use the application of gross exposure to target a specified risk level. A Fund's portfolio has a lower correlation to equity markets and can be risk reducing when the volatility of equity markets is high.

27. Notional exposures of futures contracts move with price and do not represent risk. Risk, as measured by futures exchanges, is a function of price and volatility, both of which are captured in value-at-risk (as defined in Appendix A) (VaR), but not notional exposure. VaR is a better measure of risk for the Funds.

28. For example, the aggregate exposure to cash borrowing, short selling and specified derivatives transactions of each Fund as calculated pursuant to section 2.9.1 of NI 81-102 is typically between 100% and 400%. Notwithstanding this range, risk is still managed by the Filer at a consistent level, and there is no relationship between the aggregate notional exposure and the volatility of returns that the Filer has delivered since the inception of the Funds. Historically, periods of higher than average aggregate notional exposure have not represented periods of higher volatility (or risk), and periods of lower than average aggregate notional exposure have not represented periods of lower volatility (or risk).

29. The Filer on behalf of each Fund has used multiple definitions of risk to capture diversified risk premia while remaining adaptable to changing market conditions. The Filer also systematically manages risk across multiple constraints at the market level.

30. The current regulatory framework in section 2.9.1 of NI 81-102 does not appropriately or adequately address the uniqueness of the investment strategies that the Filer employs in relation to the Funds.

31. In relation to the Funds, unlike typical portfolio managers, the Filer:

(a) trades futures on margin, which is different than stocks and bonds (e.g., for stocks and bonds exchange margin requirements are determined by the value of the securities, whereas for futures, exchange margin requirements are determined by notional exposure and volatility (the primary inputs to VaR models));

(b) is systematic and technical versus being fundamental and discretionary; and

(c) utilizes systematic risk management, risk allocation as opposed to capital allocation, volatility targeting, and drawdown management techniques.

VGMAT and VEGMAT target specific volatility levels for the respective Funds as a risk management strategy. Using an ensemble of volatility forecasting models, the Filer forecasts day-ahead volatility for the underlying portfolio. For example, if the Fund's volatility target is 15%, and volatility of the underlying portfolio is forecast to be 5%, the Filer will utilize gross exposure of 300% in an effort to achieve the desired 15% volatility level. Conversely, if the forecast of volatility for the underlying portfolio rises to 15%, this means the Filer will only utilize gross exposure of 100% to target the same 15% volatility level for the overall portfolio. As portfolio weights, estimates of volatility and correlations change through time, the Filer will increase and decrease the Fund's gross exposure to underlying assets in order to maintain its target level of portfolio volatility. During periods of high volatility and high correlations, the Fund may have lower exposure to the underlying assets to maintain the target level of portfolio volatility. Conversely, during periods of low volatility and low correlations, the Fund may require greater exposure to underlying assets to maintain its target level of portfolio volatility.

32. The Funds provide returns that have historically achieved the desired risk level for each Fund's investment objective, without adding additional risk through the application of leverage.

33. The European Union approved a new regulation of mutual funds in 2010 in the fourth European Directive covering Undertakings for Collective Investment in Transferable Securities (UCITS IV), which introduced a VaR based approach to regulatory risk management for investment funds that extensively use derivatives.

34. This approach allows for two methods of VaR limits, "relative" and "absolute", as defined in Appendix A, and which in general terms can be summarized as follows:

(a)	Relative:	This approach uses a ratio of up to 200% between the VaR of the portfolio and the VaR of a reference portfolio.
(b)	Absolute:	This approach is generally used when there is no reference portfolio or benchmark and allows the one-month VaR to be up to 20% of the NAV of the portfolio.

35. UCITS IV also includes rules for the computation of VaR and requires regular stress- and back-testing to complement the VaR estimation.

36. On October 28, 2020, the SEC adopted new Rule 18f-4 under the U.S. Investment Company Act of 1940 (17 CFR § 270.18f-4) (the SEC Rule), which modernized the regulatory framework for derivatives used by registered funds. The SEC Rule is generally the same as the UCITS IV rules as it adopted a 200% limit for funds using a relative VaR approach, and a 20% VaR limit for funds using an absolute VaR approach.

37. When dealing with a fund that is managed using a multi-asset approach like the Filer, a VaR-based approach is a better means of managing risk because, unlike notional amounts which do not measure risk or volatility, VaR enables risk to be measured in a reasonably comparable and consistent manner.

38. A risk-based approach which relies on VaR, stress testing, and overall risk management would address concerns about a Fund's use of leverage, while allowing the Funds to use derivatives for a variety of purposes.

39. The Portfolio Managers of the Funds are CFA charterholders and are well versed with VaR as a risk management tool. In addition, the Filer's investment management team has built an internal VaR calculation tool to test and confirm the Bloomberg specifications and output from the MARS system.

40. Of the two VaR approaches ("relative" and "absolute"), the Filer has determined that the relative VaR approach is the approach that is most suitable for VDCT, as the Filer has identified an appropriate reference portfolio that can be used in respect of that Fund for the purpose of complying with the 200% limit applicable to funds using a relative VaR approach. Specifically, the Filer has identified the Bloomberg Commodity Index (BCOM) as an appropriate reference portfolio for VDCT. BCOM provides broad-based exposure to commodities, where no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments. Similarly, VDCT provides liquid and efficient exposure to commodity markets by investing in a wide range of commodity futures contracts. VDCT seeks to capture diverse sources of inflation and commodity demand, and potentially reduces volatility in comparison with other non-diversified commodity investments. BCOM tracks exchange-traded futures contracts linked to six different commodity sectors comprised of 23 physical commodities. VDCT holds exchange-traded futures contracts linked to six different commodity sectors comprised of 17 physical commodities. The commodity sectors and physical commodities tracked by BCOM are similar to the commodity sectors and physical commodities to which VDCT is exposed. If BCOM's standard deviation was calculated under the methodology as outlined under Appendix F of NI 81-102 in order to determine the investment risk level, BCOM would be classified as "medium risk", which is the same classification as VDCT. For these reasons, the DRM (defined below) has determined that BCOM has a risk profile that is very close to VDCT, and there is a clear link between the risk of loss of BCOM and the risk of loss of VDCT as per UCITS IV. Although BCOM uses futures contracts linked to commodity markets, it is fully collateralized and is an unleveraged index. As per the SEC Rule, the reference portfolio must be an unleveraged index that reflects the asset classes in which VDCT invests.

41. The Filer has determined that the absolute VaR approach is the approach that is most suitable for VGMAT and VEGMAT, as there are no appropriate reference portfolios that can be used in respect of those Funds for the purpose of complying with the 200% limit applicable to funds using a relative VaR approach. In particular, the Filer has determined that, due to the nature of the investment strategies of VGMAT and VEGMAT, the potential reference portfolios for such Funds would incorporate dynamic gross exposure with periods of time where this exposure would be greater than 100%, and therefore would not be permitted reference portfolios.

42. The Filer has the necessary policies and procedures in place to use a VaR model, and, when they are public funds, each Fund will adhere to the applicable VaR limit and will operate in accordance with the conditions set out in Appendix A, which are conditions of the exemptive relief granted by the Principal Regulator to Auspice Capital Advisors Ltd. in a decision dated February 23, 2023 and which are based on the SEC Rule.

43. The Filer will use a historical simulation VaR model with respect to each of the Funds, when they are public funds, that will not change. In addition, the Filer will upload the investment portfolios of the Funds each business day to the Bloomberg MARS system in order to have the daily reports from the Bloomberg MARS system (each a Bloomberg Report) confirm that each Fund is compliant with the applicable VaR test as set out in Appendix A on each business day.

44. The Filer has appointed a "derivatives risk manager" (a DRM) and has developed a "Derivatives Risk Management Program" (the DRMP) that is consistent with and adheres to the conditions set out in Appendix A. A copy of the DRMP has been provided to the Principal Regulator.

45. The Filer's DRMP incorporates the well documented policies and procedures for risk monitoring, risk management and risk reporting of a fund's VaR methodology to regulators as developed by securities regulators in the U.S. and the European Union.

Performance Relief

46. Since the commencement of operations of each Fund, the units of that Fund have been distributed to investors in Canada on a prospectus-exempt basis in accordance with National Instrument 45-106 Prospectus Exemptions.

47. Each Fund will distribute units of the Fund pursuant to a simplified prospectus and fund facts document (the Disclosure Documents) filed in accordance with the securities legislation of one or more of the provinces and territories of Canada. Upon the issuance of a final receipt for the Disclosure Documents of each Fund, that Fund will become a reporting issuer in each jurisdiction of Canada where the Disclosure Documents have been filed and, subject to the Exemption Sought, will become subject to the requirements of NI 81-102 that relate to alternative mutual funds and the requirements of NI 81-106 that apply to investment funds that are reporting issuers.

48. Each Fund will be managed on the same basis after it becomes a reporting issuer as it was during the period before it became a reporting issuer. For each Fund, the investment objective of the Fund, the fees payable in respect of each series of units of the Fund, and the day-to-day administration of the Fund will not change when the Fund becomes a reporting issuer.

49. Each Fund previously sought to achieve its investment objective by investing indirectly through an investment fund that (i) was structured as a limited partnership, (ii) was managed by the Filer, and (iii) had the same investment objective as the Fund (the "Prior Indirect Investment Structure"). In anticipation of the initial public offering of the Funds, the Prior Indirect Investment Structure has been eliminated and now each Fund makes direct investments in accordance with its investment objective and strategies.

Except:

(a) with respect to the Prior Indirect Investment Structure (which would not have been permitted by NI 81-102 had the funds been reporting issuers at the time) and

(b) as contemplated in the Exemption Sought,

each Fund has complied with the investment restrictions and practices contained in NI 81-102 since inception.

50. The Filer proposes to use each Fund's past performance data to determine its investment risk level and to disclose that investment risk level in the Disclosure Documents for that Fund, or series or class of the Fund as applicable. Without the Performance Relief, the Filer, in determining and disclosing the investment risk level of that Fund, or series or class of the Fund as applicable, in the Disclosure Documents, cannot use performance data that relates to a period prior to that Fund becoming a reporting issuer.

51. The Filer proposes to include in the fund facts documents for any existing series of units of a Fund offered under a simplified prospectus past performance data in the charts required by items 5(2), 5(3) and 5(4) of Form 81-101F3 under the sub-headings "Year-by-year returns", "Best and worst 3-month returns" and "Average return", respectively, related to periods prior to that Fund becoming a reporting issuer. Without the Performance Relief, the fund facts documents of each Fund cannot include performance data of that Fund that relates to a period prior to that Fund becoming a reporting issuer.

52. As a reporting issuer, each Fund is required under NI 81-106 to prepare and send MRFPs to all holders of its securities on an annual and interim basis. Without the Performance Relief, the MRFPs of each Fund cannot include financial highlights and performance data of that Fund that relates to a period prior to that Fund becoming a reporting issuer.

53. The performance data and other financial data of each Fund for the time period before it became a reporting issuer is significant and meaningful information for existing and prospective investors of units of that Fund.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

1. In respect of the Margin Deposit Relief:

(a) a Fund shall only use Initial Margin such that the amount of Initial Margin held by any one Dealer on behalf of the Fund does not exceed 35% of the net assets of the Fund, taken at market value as at the time of the deposit;

(b) a Fund shall only use Initial Margin such that the amount of Initial Margin held by Dealers in aggregate on behalf of the Fund does not exceed 70% of the net assets of the Fund, taken at market value as at the time of the deposit; and

(c) all Initial Margin deposited with any Dealer is and will be held in segregated accounts and is not, and will not be available to satisfy claims against such Dealer made by creditor of the Dealer.

2. In respect of the Leverage Relief:

(a) the Filer has appointed a DRM;

(b) each Fund complies with the applicable VaR test as set out in Appendix A and all of the additional leverage conditions set out in Appendix A;

(c) the Filer discloses in each Fund's simplified prospectus and fund facts documents the maximum VaR that the Fund is permitted to incur, and the Filer discloses in the annual and interim management report on fund performance of each Fund the maximum amount of VaR incurred by the Fund over the applicable period;

(d) the Filer files a copy of its initial DRMP with the Principal Regulator;

(e) the Filer notifies the Principal Regulator promptly of any changes to its DRM or DRMP;

(f) no later than 30 days after the end of each month, the Filer prepares and retains a monthly portfolio investment report containing the elements set out in its DRMP, and, no later than 60 days after the end of each fiscal quarter, files with the Principal Regulator the monthly portfolio investment reports for that quarter;

(g) the Filer does not change the VaR model that it is using with respect to a Fund;

(h) the Filer uploads the investment portfolios of the Funds each business day to the Bloomberg MARS system in order to have the applicable Bloomberg Reports confirm that each Fund is compliant with the applicable VaR test as set out in Appendix A on each business day;

(i) the Filer provides to the Principal Regulator on a quarterly basis a copy of each daily Bloomberg Report for the last quarter for each Fund;

(j) the Filer notifies the Principal Regulator within one business day if any Fund is offside the applicable VaR test as set out in Appendix A for more than five consecutive business days, providing the information set out in the Viewpoint VaR breach memo (as defined in the DRMP);

(k) the Filer promptly (e.g., within 24 hours) provides the Principal Regulator with any other information that the Principal Regulator may request regarding the intermonth calculations and risk metrics the Filer is using; and

(l) the Filer appropriately documents its risk methodology for each Fund in accordance with the requirements of the Risk Classification Methodology.

3. In respect of the Performance Relief:

(a) any sales communication, fund facts document and MRFP that contains performance data of the units of a Fund relating to a period of time prior to when the Fund was a reporting issuer discloses that

(i) the Fund was not a reporting issuer during such period;

(ii) the expenses of the Fund would have been higher during such period had the Fund been subject to the additional regulatory requirements applicable to a reporting issuer;

(iii) the Filer obtained exemptive relief on behalf of the Fund to permit the disclosure of performance data of the units of the Fund relating to a period prior to when the Fund was a reporting issuer; and

(iv) with respect to any MRFP, the financial statements of the Fund for such period are posted on the Fund's designated website and are available to investors upon request; and

(b) the Filer posts the financial statements of each Fund on the Fund's designated website and delivers those financial statements to investors upon request.

Expiration

4. This decision expires on October 2, 2027.

Application File #: 2023/0043

SEDAR+ File #: 3483847

APPENDIX A

ADDITIONAL LEVERAGE CONDITIONS

In these conditions,

"absolute VaR test" means that the VaR of a fund's portfolio does not exceed 20% of the value of the fund's net assets;

"board", with respect to a fund, means the fund manager's board of directors;

"derivatives risk manager" means an officer or officers of the fund's investment adviser responsible for administering the program and policies and procedures required by condition 1 below, provided that the derivatives risk manager:

(1) may not be a portfolio manager of the fund, or if multiple officers serve as derivatives risk manager, a majority of the derivatives risk managers must not be portfolio managers of the fund; and

(2) must have relevant experience regarding the management of derivatives risk;

"derivatives risks" means the risks associated with a fund's derivatives transactions or its use of derivatives transactions, including leverage, market, counterparty, liquidity, operational, and legal risks and any other risks the derivatives risk manager deems material;

"derivatives transaction" means

(1) any swap, security-based swap, futures contract, forward contract, option, any combination of the foregoing, or any similar instrument, under which a fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; and

(2) any short sale borrowing.

"designated index" means an unleveraged index that is approved by the derivatives risk manager for purposes of the relative VaR test and that reflects the markets or asset classes in which the fund invests and is not administered by an organization that is an affiliated person of the fund, its investment adviser, or principal underwriter, or created at the request of the fund or its investment adviser, unless the index is widely recognized and used. In the case of a blended index, none of the indexes that compose the blended index may be administered by an organization that is an affiliated person of the fund, its investment adviser, or principal underwriter, or created at the request of the fund or its investment adviser, unless the index is widely recognized and used;

"designated reference portfolio" means a designated index or the fund's securities portfolio. Notwithstanding the first sentence of the definition of designated index in these conditions, if the fund's investment objective is to track the performance (including a leverage multiple or inverse multiple) of an unleveraged index, the fund must use that index as its designated reference portfolio;

"independent director" means a director who would be independent within the meaning of section 1.4 of National Instrument 52-110 Audit Committees;

"relative VaR test" means that the VaR of the fund's portfolio does not exceed 200% of the VaR of the designated reference portfolio;

"securities portfolio" means the fund's portfolio of securities and other investments, excluding any derivatives transactions, that is approved by the derivatives risk manager for purposes of the relative VaR test, provided that the fund's securities portfolio reflects the markets or asset classes in which the fund invests (i.e., the markets or asset classes in which the fund invests directly through securities and other investments and indirectly through derivatives transactions);

"value-at-risk" or "VaR" means an estimate of potential losses on an instrument or portfolio, expressed as a percentage of the value of the portfolio's assets (or net assets when computing a fund's VaR), over a specified time horizon and at a given confidence level, provided that any VaR model used by a fund for purposes of determining the fund's compliance with the relative VaR test or the absolute VaR test must:

(1) take into account and incorporate all significant, identifiable market risk factors associated with a fund's investments, including, as applicable:

(i) equity price risk, interest rate risk, credit spread risk, foreign currency risk and commodity price risk;

(ii) material risks arising from the nonlinear price characteristics of a fund's investments, including options and positions with embedded optionality; and

(iii) the sensitivity of the market value of the fund's investments to changes in volatility;

(2) use a 99% confidence level and a time horizon of 20 trading days; and

(3) be based on at least three years of historical market data.

Conditions

1. Derivatives risk management program. The fund must adopt and implement a written derivatives risk management program (program), which must include policies and procedures that are reasonably designed to manage the fund's derivatives risks and to reasonably segregate the functions associated with the program from the portfolio management of the fund. The program must include the following elements:

(i) Risk identification and assessment. The program must provide for the identification and assessment of the fund's derivatives risks. This assessment must take into account the fund's derivatives transactions and other investments.

(ii) Risk guidelines. The program must provide for the establishment, maintenance, and enforcement of investment, risk management, or related guidelines that provide for quantitative or otherwise measurable criteria, metrics, or thresholds of the fund's derivatives risks. These guidelines must specify levels of the given criterion, metric, or threshold that the fund does not normally expect to exceed, and measures to be taken if they are exceeded.

(iii) Stress testing. The program must provide for stress testing to evaluate potential losses to the fund's portfolio in response to extreme but plausible market changes or changes in market risk factors that would have a significant adverse effect on the fund's portfolio, taking into account correlations of market risk factors and resulting payments to derivatives counterparties. The frequency with which the stress testing under this paragraph is conducted must take into account the fund's strategy and investments and current market conditions, provided that these stress tests must be conducted no less frequently than weekly.

(iv) Backtesting. The program must provide for backtesting to be conducted no less frequently than weekly, of the results of the VaR calculation model used by the fund in connection with the relative VaR test or the absolute VaR test by comparing the fund's gain or loss that occurred on each business day during the backtesting period with the corresponding VaR calculation for that day, estimated over a one-trading day time horizon, and identifying as an exception any instance in which the fund experiences a loss exceeding the corresponding VaR calculation's estimated loss.

(v) Internal reporting and escalation --

A. Internal reporting. The program must identify the circumstances under which persons responsible for portfolio management will be informed regarding the operation of the program, including exceedances of the guidelines specified in paragraph 1(ii) of these conditions and the results of the stress tests specified in paragraph 1(iii) of these conditions.

B. Escalation of material risks. The derivatives risk manager must inform in a timely manner persons responsible for portfolio management of the fund, and also directly inform the board as appropriate, of material risks arising from the fund's derivatives transactions, including risks identified by the fund's exceedance of a criterion, metric, or threshold provided for in the fund's risk guidelines established under paragraph 1(ii) of these conditions or by the stress testing described in paragraph 1(iii) of these conditions.

(vi) Periodic review of the program. The derivatives risk manager must review the program at least annually to evaluate the program's effectiveness and to reflect changes in risk over time. The periodic review must include a review of the VaR calculation model used by the fund under condition 2 below (including the backtesting required by paragraph 1(iv) of these conditions) and any designated reference portfolio to evaluate whether it remains appropriate.

2. Limit on fund leverage risk.

(i) The fund must comply with the relative VaR test unless the derivatives risk manager reasonably determines that a designated reference portfolio would not provide an appropriate reference portfolio for purposes of the relative VaR test, taking into account the fund's investments, investment objectives, and strategy. A fund that does not apply the relative VaR test must comply with the absolute VaR test.

(ii) The fund must determine its compliance with the applicable VaR test at least once each business day. If the fund determines that it is not in compliance with the applicable VaR test, the fund must come back into compliance promptly after such determination, in a manner that is in the best interests of the fund and its securityholders.

(iii) If the fund is not in compliance with the applicable VaR test within five business days,

A. The derivatives risk manager must provide a written report to the board and explain how and by when (i.e., number of business days) the derivatives risk manager reasonably expects that the fund will come back into compliance;

B. The derivatives risk manager must analyze the circumstances that caused the fund to be out of compliance for more than five business days and update any program elements as appropriate to address those circumstances; and

C. The derivatives risk manager must provide a written report within thirty calendar days of the exceedance to the board explaining how the fund came back into compliance and the results of the analysis and updates required under paragraph 2(iii)(B) of these conditions. If the fund remains out of compliance with the applicable VaR test at that time, the derivatives risk manager's written report must update the report previously provided under paragraph 2(iii)(A) of these conditions and the derivatives risk manager must update the board on the fund's progress in coming back into compliance at regularly scheduled intervals at a frequency determined by the board.

3. Board oversight and reporting --

(i) Approval of the derivatives risk manager. The board, including a majority of independent directors of the fund manager, if any, must approve the designation of the derivatives risk manager.

(ii) Reporting on program implementation and effectiveness. On or before the implementation of the program, and at least annually thereafter, the derivatives risk manager must provide to the board a written report providing a representation that the program is reasonably designed to manage the fund's derivatives risks and to incorporate the elements provided in paragraphs 1(i) through (vi) of these conditions. The representation may be based on the derivatives risk manager's reasonable belief after due inquiry. The written report must include the basis for the representation along with such information as may be reasonably necessary to evaluate the adequacy of the fund's program and, for reports following the program's initial implementation, the effectiveness of its implementation. The written report also must include, as applicable, the derivatives risk manager's basis for the approval of any designated reference portfolio or any change in the designated reference portfolio during the period covered by the report; or an explanation of the basis for the derivatives risk manager's determination that a designated reference portfolio would not provide an appropriate reference portfolio for purposes of the relative VaR test.

(iii) Regular board reporting. The derivatives risk manager must provide to the board, annually or at such other frequency determined by the board, a written report regarding the derivatives risk manager's analysis of exceedances described in paragraph 1(ii) of these conditions, the results of the stress testing conducted under paragraph 1(iii) of these conditions, and the results of the backtesting conducted under paragraph 1(iv) of these conditions since the last report to the board. Each report under this paragraph must include such information as may be reasonably necessary for the board to evaluate the fund's response to exceedances and the results of the fund's stress testing.

4. [Not applicable]

5. [Not applicable]

6. Recordkeeping --

(i) Records to be maintained. A fund must maintain a written record documenting the following, as applicable:

A. The fund's written policies and procedures required by condition 1, along with

(1) The results of the fund's stress tests under paragraph 1(iii) of these conditions;

(2) The results of the backtesting conducted under paragraph 1(iv) of these conditions;

(3) Records documenting any internal reporting or escalation of material risks under paragraph 1(v)(B) of these conditions; and

(4) Records documenting the reviews conducted under paragraph 1(vi) of these conditions.

B. Copies of any materials provided to the board in connection with its approval of the designation of the derivatives risk manager, any written reports provided to the board relating to the program, and any written reports provided to the board under paragraphs 2(iii)(A) and (C) of these conditions.

C. Any determination and/or action the fund made under paragraphs 2(i) and (ii) of these conditions, including a fund's determination of: the VaR of its portfolio; the VaR of the fund's designated reference portfolio, as applicable; the fund's VaR ratio (the value of the VaR of the fund's portfolio divided by the VaR of the designated reference portfolio), as applicable; and any updates to any VaR calculation models used by the fund and the basis for any material changes thereto.

(ii) Retention periods.

A. A fund must maintain a copy of the written policies and procedures that the fund adopted under condition 1 that are in effect, or at any time within the past seven years were in effect, in an easily accessible place.

B. A fund must maintain all records and materials that paragraphs 6(i)(A)(1) through (4) and 6(i)(B) through (D) of these conditions describe for a period of not less than seven years (the first two years in an easily accessible place) following each determination, action, or review that these paragraphs describe.