iPerformance Fund Corp. - s. 5.1
Headnote
Section5.1 of Rule 31-506 SRO Membership - Mutual Fund Dealers- mutual fund dealer exempted from the requirements of the Rulethat it become a member of the Mutual Fund Dealers Associationof Canada - mutual fund dealer subject to certain terms and conditionsof registration.StatuteCited
SecuritiesAct, R.S.O. 1990, c. S. 5, as am.RuleCited
Rule31-506 SRO Membership - Mutual Fund Dealers, ss. 2.1 and 5.1PublishedDocument Cited
Lettersent to the Investment Funds Institute of Canada and the InvestmentCounsel Association of Canada, December 6, 2000, (2000) 23 OSCB8467INTHE MATTER OF
THESECURITIES ACT
R.S.O.1990, CHAPTER S.5, AS AMENDED (the "Act")
AND
ONTARIOSECURITIES COMMISSION RULE 31-506
SROMEMBERSHIP - MUTUAL FUND DEALERS (the "Rule")
AND
INTHE MATTER OF
iPERFORMANCEFUND CORP.
DECISION
(Section5.1 of the Rule)
UPONthe Director having received an application (the "Application")from iPerformance Fund Corp. (the "Registrant")for a decision, pursuant to section 5.1 of the Rule, exemptingthe Registrant from the requirements in section 2.1 of the Rule,which would otherwise require that the Registrant be a memberof the Mutual Fund Dealers Association of Canada (the "MFDA")on and after July 2, 2002;
UPONconsidering the Application and the recommendation of staffof the Ontario Securities Commission (the "Commission");
ANDUPON the Registrant having represented to the Directorthat:
1.the Registrant is registered under the Act as an adviser inthe categories of "investment counsel" and "portfolio manager"("ICPM") and as a dealer in the category of"mutual fund dealer";
2.the Registrant is not otherwise registered under the Act andis not registered under the securities legislation of any otherprovince or territory of Canada;
3.this application is not being made in any other jurisdiction;
4.the Registrant's current primary activities are (i) portfolioadviser of CEO Hirsch Opportunistic Canadian Fund, CEO HirschOpportunistic Natural Resource Fund and CEO Hirsch OpportunisticTactical Allocation Fund (the "CEO Hirsch Funds")(for which the Registrant was formerly the administrative manager,trustee and principal distributor) and (ii) manager, trusteeand distributor of other mutual funds which are offered on aprivate placement basis only (the "Pooled Funds");
5.at present, Hirsch Asset Management Corp.("Hirsch"),an affiliate of the Registrant, is registered under the Actas a mutual fund dealer and ICPM. On May 30, 2001, the Directorexempted Hirsch from section 3.1 of the Rule provided that theRegistrant prepare and submit an application to the MFDA;
6.it is Hirsch's intention to transfer its house accounts to theRegistrant and surrender its registration as a mutual fund dealer;
7.the Registrant filed an application for membership with theMFDA, in compliance with such exemption decision and the Rule,with the intention of becoming a member of the MFDA;
8.membership with the MFDA for the Registrant is not appropriatedue to the nature of the Registrant's intended primary businessof a manager of Pooled Funds and portfolio adviser to the CEOHirsch Funds;
9.the Registrant does not currently and does not intend to carryon the business of retail distribution of publicly-offered mutualfunds;
10.the Registrant's trading activities as a mutual fund dealercurrently represent and will continue to represent activitiesthat are incidental to its principal business activities;
11.the Registrant has agreed to the imposition of the terms andconditions on the Registrant's registration as a mutual funddealer set out in the attached Schedule "A", which outlinesthe activities the Registrant has agreed to adhere to in connectionwith its application for this Decision;
12.any person or company that is not currently a client of theRegistrant on the date of this Decision, will, before they areaccepted as a client of the Registrant, receive prominent writtennotice from the Registrant that:
TheRegistrant is not currently a member, and does not intend tobecome a member of the Mutual Fund Dealers Association; consequently,clients of the Registrant will not have available to them investorprotection benefits that would otherwise derive from membershipof the Registrant in the MFDA, including coverage under anyinvestor protection plan for clients of members of the MFDA;
13.upon the next general mailing to its account holders and inany event before July 2, 2002, the Registrant shall provide,to any client that was a client of the Registrant on the dateof this Decision, the prominent written notice referred to inparagraph 12, above;
ANDUPON the Director being satisfied that to do so wouldnot be prejudicial to the public interest;
ITIS THE DECISION of the Director, pursuant to section5.1 of the Rule, that the Registrant is exempt from the requirementsin section 2.1 of the Rule;
PROVIDEDTHAT:
TheRegistrant complies with the terms and conditions on its registrationunder the Act as a mutual fund dealer set out in the attachedSchedule "A".
January21, 2002.
"RebeccaCowdery"
Schedule"A"
TERMSAND CONDITIONS OF REGISTRATION
OF
iPERFORMANCEFUND CORP.
ASA MUTUAL FUND DEALER
Definitions
1. Forthe purposes hereof, unless the context otherwise requires: (a)"Act" means the Securities Act, R.S.O. 1990, c. S.5,as amended; (b)"Client Name Trade" means, for the Registrant, a trade to, oron behalf of, a person or company, in securities of a mutual fund,for which the Registrant or Hirsch is a portfolio adviser, where,immediately before the trade, the person or company is shown onthe records of the mutual fund or of an other mutual fund forwhich the Registrant or Hirsch is a portfolio adviser, as theholder of securities of such mutual fund, and the trade consistsof: (A)a purchase, by the person or company, through the Registrant,of securities of the mutual fund; or (B)a redemption, by the person or company, through the Registrant,of securities of the mutual fund; andwhere, the person was an existing client of the Registrant onthe Effective Date; (c)"Commission" means the Ontario Securities Commission; (d)"Effective Date" means the date on which the Registrant is registeredwith the Commission as a mutual fund dealer; (e)"Employee", for the Registrant, means: (A)an employee of the Registrant; (B)an employee of an affiliated entity of the Registrant; or (C)an individual that is engaged to provide, on a bona fidebasis, consulting, technical, management or other services tothe Registrant or to an affiliated entity of the Registrant, undera written contract between the Registrant or the affiliated entityand the individual or a consultant company or consultant partnershipof the individual, and, in the reasonable opinion of the Registrant,the individual spends or will spend a significant amount of timeand attention on the affairs and business of the Registrant oran affiliated entity of the Registrant; (f)"Employee", for a Service Provider, means an employee of the ServiceProvider or an affiliated entity of the Service Provider, providedthat, at the relevant time, in the reasonable opinion of the Registrant,the employee spends or will spend, a significant amount of timeand attention on the affairs and business of: (A)the Registrant or an affiliated entity of the Registrant; or (B)a mutual fund managed by the Registrant or an affiliated entityof the Registrant; (g)"Employee Rule" means Commission Rule 45-503 Trades To Employees,Executives and Consultants; (h)"Executive", for the Registrant, means a director, officer orpartner of the Registrant or of an affiliated entity of the Registrant; (i)"Executive", for a Service Provider, means a director, officeror partner of the Service Provider or of an affiliated entityof the Service Provider; (j)"Exempt Trade", for the Registrant, means: (i)a trade in securities of a mutual fund that is made between aperson or company and an underwriter acting as purchaser or betweenor among underwriters; or (ii)a trade in securities of a mutual fund for which the Registrantwould have available to it an exemption from the registrationrequirements of clause 25(1)(a) of the Act if the Registrant werenot a "market intermediary" as such term is defined in section204 of the Regulation; (k)"Hirsch" means Hirsch Asset Management Corp.; (l)"In Furtherance Trade" means, for the Registrant, a trade by theRegistrant that consists of any act, advertisement, or solicitation,directly or indirectly in furtherance of an other trade in securitiesof a mutual fund, where the other trade consists of: (i)a purchase or sale of securities of a mutual fund that is portfoliomanaged by the Registrant or an affiliated entity of the Registrantand where the purchase or sale is made by or through an otherregistered dealer if the Registrant is not otherwise permittedto make the purchase or sale pursuant to these terms and conditions; (m)"Mutual Fund Instrument" means National Instrument 81-102 MutualFunds, as amended; (n)"Permitted Client", for the Registrant, means a person or companythat is a client of the Registrant, and that is, or was at thetime the person or company became a client of the Registrant: (i)an Executive or Employee of the Registrant; (ii)a Related Party of an Executive or Employee of the Registrant; (iii)a Service Provider of the Registrant or an affiliated entity ofa Service Provider of the Registrant; (iv)an Executive or Employee of a Service Provider of the Registrant;or (v)a Related Party of an Executive or Employee of a Service Providerof the Registrant; (o)"Permitted Client Trade" means, for the Registrant, a trade toa person who is a Permitted Client or who represents to the Registrantthat he or she is a person included in the definition of PermittedClient, in securities of a mutual fund for which the Registrantor Hirsch is a portfolio adviser, and the trade consists of: (i)a purchase, by the person, through the Registrant, of securitiesof the mutual fund; or (ii)a redemption, by the person, through the Registrant, of securitiesof the mutual fund; (p)"Registered Plan" means a registered pension plan, deferred profitsharing plan, registered retirement savings plan, registered retirementincome fund, registered education savings plan or other deferredincome plan registered under the Income Tax Act (Canada); (q)"Registrant" means iPerformance Fund Corp.; (r)"Regulation" means R.R.O. 1990, Reg. 1015, as amended, made underthe Act; (s)"Related Party", for a person, means an other person who is: (i)the spouse of the person; (ii)the issue of: (A)the person, (B)the spouse of the person, or (C)the spouse of any person that is the issue of a person referredto in subparagraphs (A) or (B) above; (iii)the parent, grandparent or sibling of the person, or the spouseof any of them; (iv)the issue of any person referred to in paragraph (iii) above;or (v)a Registered Plan established by, or for the exclusive benefitof, one, some or all of the foregoing; (vi)a trust where one or more of the trustees is a person referredto above and the beneficiaries of the trust are restricted toone, some, or all of the foregoing; (vii)a corporation where all the issued and outstanding shares of thecorporation are owned by one, some, or all of the foregoing; (t)"securities", for a mutual fund, means shares or units of themutual fund; and (u)"Service Provider", for the Registrant, means a person or companythat provides or has provided professional, consulting, technical,management or other services to the Registrant or an affiliatedentity of the Registrant. 2.For the purposes hereof, a person or company is considered tobe an "affiliated entity" of an other person or company if theperson or company would be an affiliated entity of that otherperson or company for the purposes of the Employee Rule. 3.For the purposes hereof: (a)"issue", "niece", "nephew" and "sibling" includes any person havingsuch relationship through adoption, whether legally or in fact; (b)"parent" and "grandparent" includes a parent or grandparent throughadoption, whether legally or in fact; (c)"registered dealer" means a person or company that is registeredunder the Act as a dealer in a category that permits the personor company to act as dealer for the subject trade; and (d)"spouse", for an Employee or Executive, means a person who, atthe relevant time, is the spouse of the Employee or Executive. 4.Any terms that are not specifically defined above shall, unlessthe context otherwise requires, have the meaning: (a)specifically ascribed to such term in the Mutual Fund Instrument;or (b)if no meaning is specifically ascribed to such term in the MutualFund Instrument, the same meaning the term would have for thepurposes of the Act. RestrictedRegistration PermittedActivities 5.The registration of the Registrant as a mutual fund dealer underthe Act shall be for the purposes only of trading by the Registrantin securities of a mutual fund where the trade consists of: (a)a Client Name Trade; (b)an Exempt Trade; (c)an In Furtherance Trade; or (d)a Permitted Client Trade providedthat, in the case of all trades that are only referred to in clauses(a) or (d), the trades are limited and incidental to the principalbusiness of the Registrant.