iPerformance Fund Corp. - MRRS Decision
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO
NEW BRUNSWICK, NOVA SCOTIA, PRINCE EDWARD ISLAND,
NEWFOUNDLAND, YUKON, NORTHWEST TERRITORIES AND NUNAVUT
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
iPERFORMANCE FUND CORP.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Yukon,Northwest Territories and Nunavut (the "Jurisdictions") has received an application from iPerformance Fund Corp. (the"Applicant") for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that:
(a) certain trades in units ("Units") of open-end unit trusts established, or to be established from time totime, by the Applicant or an affiliate of the Applicant (the "Funds") shall not be subject to theregistration and prospectus requirements of the Legislation of the Jurisdictions other than BritishColumbia;
(b) trades in additional Units ("Additional Units") of the Funds to an investor upon:
(i) the subsequent subscription of an investor shall not subject to the registration andprospectus requirements of the Legislation; and
(ii) the reinvestment of distributions by a Fund shall not be subject to the registration andprospectus requirements of the Legislation of, New Brunswick, Newfoundland, PrinceEdward Island and Yukon Territory; and
(c) trades in Units are not subject to the requirements of the Legislation of the Jurisdictions other thanManitoba relating to the filing of forms and the payment of fees within 10 days of each trade;
AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS the Applicant has represented to the Decision Maker that:
1. The Applicant has applied for registration under the Securities Act (Ontario) as an adviser in the categories ofinvestment counsel and portfolio manager. Until such time as the registration has been approved by theapplicable regulatory authority, the Applicant will act under the registration of its controlling shareholder, HirschAsset Management Corp., which is a mutual fund dealer, investment counsel and portfolio manager in Ontario.
2. The Applicant intends to establish one or more Funds pursuant to declarations of trust for which the Applicantwill act as the trustee and manager.
3. Each Fund is or will be a "mutual fund" as defined in the Legislation.
4. None of the Funds currently intends to become a reporting issuer, as such term is defined in the Legislation,and the Units of the Funds will not be listed on any stock exchange.
5. Each Fund will be divided into Units which will evidence each investor's undivided interest in the assets of theFund.
6. It is intended that Units of the Funds will be qualified for investment by a trust governed by a self-administeredregistered retirement savings plan or registered retirement income fund ("Registered Plans").
7. The initial distribution of Units of a Fund (the "Initial Investment") to an investor and the Registered Plans of theinvestor will have an aggregate acquisition cost to the investor and the investor's Registered Plans (an investoralone, an investor's Registered Plan alone, or any combination of the foregoing, a "Unitholder") of at least theamount prescribed by the Legislation (the "Prescribed Amount") in connection with exemptions from theprospectus and registration requirements (the "Private Placement Exemptions") which require the investor topurchase securities of an issuer having a minimum acquisition cost.
8. Where the Prescribed Amount of an Initial Investment in a fund is met through the aggregation of the acquisitioncosts of Units of a Fund by some or all of an investor and an investor's Registered Plans, the Private PlacementExemptions would not be available and exemptive relief required.
9. Following an Initial Investment, it is proposed that a Unitholder be able to subscribe and pay for Additional Unitsof a Fund in increments of less than the Prescribed Amount, provided that at the time of such subsequentacquisition the Unitholder holds Units of the Fund with an aggregate acquisition cost or aggregate net assetvalue of at least the Prescribed Amount.
10. Each Fund proposes to distribute Additional Units by way of automatic reinvestment of distributions toUnitholders of the Fund.
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISIONS of the Decision Makers pursuant to the Legislation are that:
(A) an Initial Investment in Units of a Fund shall not be subject to the registration and prospectus requirements ofthe Legislation provided that:
(i) the aggregate acquisition cost to a Unitholder of the Initial Investment is not less than the PrescribedAmount; and
(ii) this paragraph (A) will cease to be in effect in a Jurisdiction 90 days after the coming into force,subsequent to the date of this Decision, of any legislation, regulation or rule in the Jurisdiction relating,in whole or in part, to the distribution of mutual fund securities under exemptions from the registrationand prospectus requirements;
(B) a trade in Additional Units pursuant to a subsequent subscription and payment by a Unitholder shall not besubject to the registration and prospectus requirements of the Legislation in Manitoba, Ontario, New Brunswick,Newfoundland, Prince Edward Island and Yukon Territory provided that:
(i) at the time of trade of Additional Units, the Applicant or an affiliate is registered under the SecuritiesAct (Ontario) as an adviser in the categories of investment counsel and portfolio manager;
(ii) at the time of the trade of Additional Units of a Fund, the Unitholder then owns Units of the Fundhaving an aggregate acquisition cost or an aggregate net asset value of not less than the PrescribedAmount;
(iii) this paragraph (B) will cease to be in effect in a Jurisdiction 90 days after the coming into force,subsequent to the date of this Decision, of any legislation, regulation or rule in the Jurisdiction relating,in whole or in part, to the distribution of mutual fund securities under exemptions from the registrationand prospectus requirements;
(C) trades in Additional Units of a Fund pursuant to the reinvestment of distributions of the Fund shall not subjectto the registration and prospectus requirements of the Legislation in Manitoba, New Brunswick, Newfoundland,Prince Edward Island and Yukon Territory provided that:
(i) no sales commissions or other charge in respect of such issuance of Additional Units is payable; and
(ii) each Unitholder who receives Additional Units has received, not more than 12 months before suchissuance, a statement describing (a) the details of any deferred or contingent sales charges orredemption fee that is payable at the time of the redemption of a Unit, (b) any rights that the Unitholderhas to make an election to receive cash instead of Units in the payment of the net income or netrealized capital gains distributed by the Fund, (c) instructions on how the right referred to in subclause(b), if any, can be exercised and (d) the fact the no prospectus is available for the Fund as Units areoffered pursuant to prospectus exemptions only;
(D) the first trade of Units acquired under an exemption from the registration and prospectus requirements providedin this Decision is deemed to be a distribution or primary distribution to the public in a Jurisdiction unlessotherwise exempt under the Legislation of the Jurisdiction or unless at the time of the first trade:
(i) the Fund is a reporting issuer or the equivalent under the applicable Legislation;
(ii) if the seller of the Units is in a special relationship (as defined in the applicable Legislation) with theFund, the seller has reasonable grounds to believe that the Fund is not in default of any requirementof the applicable Legislation;
(iii) no unusual effort is made to prepare the market or to create a demand for the Units and noextraordinary commission or consideration is paid in respect of such trades; and
(iv) the Units have been held for a period of at least eighteen months from the date they were acquiredby the seller of the Units.
(E) the requirements contained in the Legislation of the Jurisdictions other than Manitoba to file a report of tradesin Units and pay the associated fee shall not apply to a trade in Units of a Fund made in reliance on theexemptions from the registration and prospectus requirements contained in this Decision or in reliance on thePrivate Placement Exemptions provided that within 30 days of the end of each financial year of each Fund, suchFund:
(i) files with the applicable Decision Maker a report in respect of all trades in Units of the Fund duringsuch financial year, in a form proscribed by applicable Legislation; and
(ii) remits to the applicable Decision Maker the fee prescribed by the applicable Legislation.
April 16, 2001.
"J.A. Geller" "Stephen N. Adams"