Purpose Investments Inc. et al.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to mutual funds for extension of lapse date of their prospectus -- Filer will incorporate offering of the mutual fund under the same offering documents as related family of funds when they are renewed -- Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectus.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
April 20, 2018
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF PURPOSE INVESTMENTS INC. (the Filer) AND PURPOSE CORE DIVIDEND FUND, PURPOSE TACTICAL HEDGED EQUITY FUND, PURPOSE MONTHLY INCOME FUND, PURPOSE TOTAL RETURN BOND FUND, PURPOSE BEST IDEAS FUND, PURPOSE DURATION HEDGED REAL ESTATE FUND, PURPOSE SHORT DURATION TACTICAL BOND FUND (each, a Fund and, collectively, the Funds) AND CERTAIN OTHER FUNDS LISTED IN PARTS I AND II OF SCHEDULE A
DECISION
I. BACKGROUND
1. The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds and certain of the Other Funds (as defined below) for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limits for the renewal of the simplified prospectus of the Funds dated May 5, 2017 and the simplified prospectuses of certain of the Filer's Other Funds dated May 11, 2017 and May 12, 2017 be extended to those time limits that would apply if the lapse date was May 31, 2018 (the Requested Relief).
2. Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) The Ontario Securities Commission is the principal regulator for this application; and
(b) The Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).
II. INTERPRETATION
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
III. REPRESENTATIONS
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation incorporated under the laws of the Province of Ontario.
2. The Filer's head office is located in Toronto, Ontario.
3. The Filer is registered as (a) an investment fund manager in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan, (b) a portfolio manager in British Columbia and Ontario and (c) a dealer in the category of exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan.
4. Each of the Funds and the funds listed in Schedule A (the Other Funds) is a reporting issuer in the Jurisdictions.
5. Neither the Filer nor any of the Funds or the Other Funds are in default of securities legislation in any of the Jurisdictions.
6. The Filer is the manager and trustee of the Funds. The Filer is also the manager of all and trustee of certain of the Other Funds listed in Schedule A.
7. Each Fund currently distributes its securities in the Jurisdictions pursuant to a simplified prospectus dated May 5, 2017 and an annual information form dated May 5, 2017 (collectively, the Current Prospectus). Each of the Other Funds currently distributes its securities in the Jurisdictions pursuant to the simplified prospectuses and annual information forms set forth in Schedule A.
8. The lapse date of the Current Prospectus under the Legislation is May 5, 2018 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of securities of the Funds would have to cease on the Current Lapse Date unless: (i) the Funds file a pro forma simplified prospectus at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days after the Current Lapse Date.
9. The lapse date of the current prospectuses of certain of the Other Funds under the Legislation is May 11 and May 12, 2018.
10. In December 2017, the Filer's wholly-owned subsidiary Redwood Asset Management Inc. (Redwood) acquired the retail asset management agreements of LOGiQ Asset Management Inc. and its affiliates, and Redwood became the manager of the Other Funds.
11. The Filer and Redwood have been integrating the Other Funds into the Filer's fund platform and have implemented certain changes since the closing of the transactions such as adding ETF securities and changing the names of certain funds.
12. Effective March 31, 2018, the Filer and Redwood amalgamated and the Filer is now the manager of the Funds and the Other Funds.
13. The Filer wishes to combine the simplified prospectuses of the Other Funds with the Current Prospectus of the Funds in order to reduce renewal, printing and related costs of the Funds and the Other Funds. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of the Funds in the Jurisdictions under the same simplified prospectus and enable the Filer to streamline disclosure across the Filer's fund platform. As the Funds and the Other Funds are managed by the Filer, offering them under the same simplified prospectus would allow investors to more easily compare the features of the Funds.
14. In connection with the integration of the Other Funds, the simplified prospectus, annual information form and several fund facts documents and ETF facts documents require review and updating. Given the time required to perform these tasks accurately, the Filer would not have sufficient time to finalize and file the pro forma simplified prospectus and annual information form combining the Funds and the Other Funds as well as prepare and update the fund facts documents and ETF facts documents by at least 30 days prior to the Current Lapse Date.
15. It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal simplified prospectuses, annual information forms, fund facts documents and ETF facts documents, as applicable (the Prospectus Documents) of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the Prospectus Documents of the Other Funds can be filed earlier with the Prospectus Documents of the Funds.
16. The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds' Prospectus Documents in May 2018. The ability to file the Prospectus Documents of the Funds with those of the Other Funds will ensure that the Filer can make the operational and administrative features of the Funds and the Other Funds consistent with each other, if necessary.
17. There have been no material changes in the affairs of the Funds and the Other Funds since the date of the Current Prospectus and the date of the current prospectuses of the Other Funds, as amended, as applicable. Accordingly, the Current Prospectus, the current prospectuses of the Other Funds, the fund facts documents and the ETF facts documents represent the current information of the Funds and Other Funds, as applicable.
18. Given the disclosure obligation of the Funds and the Other Funds, should any material changes occur, the Current Prospectus of the Funds and the current prospectuses of the Other Funds will be amended as required under the Legislation.
19. New investors of the Funds or of the Other Funds will receive delivery of the most recently filed fund facts document or ETF facts of the Funds or of the Other Funds, as applicable. The Current Prospectus of the Funds and the current prospectuses of the Other Funds will still be available upon request.
20. The Requested Relief will not affect the accuracy of the information contained in the Current Prospectus of the Funds and the current prospectus of the Other Funds and therefore will not be prejudicial to the public interest.
IV. DECISION
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Requested Relief is granted.
SCHEDULE A
THE OTHER FUNDS
I. OTHER FUNDS WITH MAY 11, 2018 LAPSE DATE:
Simplified Prospectus dated May 11, 2017, as amended by Amendment No. 1 dated January 16, 2018
• Redwood Canadian Preferred Share Fund (formerly Redwood Floating Rate Preferred Fund)
• Marijuana Opportunities Fund (formerly Redwood Infrastructure Income Fund)
• Redwood Equity Growth Fund (formerly Redwood Equity Growth Class)
• Redwood Income Growth Fund (formerly Redwood Income Growth Class)
• Redwood Unconstrained Bond Class
• Redwood Global Equity Strategy Fund (formerly Redwood Global Equity Strategy Class)
• Redwood Tactical Asset Allocation Fund (formerly Connected Wealth Tactical Class)
• Redwood Core Income Equity Fund (formerly Connected Wealth Core Income Class)
II. OTHER FUNDS WITH MAY 12, 2018 LAPSE DATE:
Amended and Restated Simplified Prospectus dated March 5, 2018, Amending and Restating the Simplified Prospectus dated May 12, 2017, as Amended by Amendment No. 1 Dated September 21, 2017
• Purpose Strategic Yield Fund (formerly LOGiQ Strategic Yield Fund and Redwood Strategic Yield Fund)
• Purpose Multi-Asset Income Fund (formerly LOGiQ High Income Fund and Redwood High Income Fund)
III. OTHER FUNDS WITH SUBSEQUENT LAPSE DATES:
Amended and Restated Simplified Prospectus dated March 5, 2018, Amending and Restating the Simplified Prospectus dated June 28, 2017, as Amended by Amendment No. 1 Dated September 21, 2017
• Purpose MLP & Infrastructure Income Fund (formerly LOGiQ MLP and Infrastructure Income Class and Redwood MLP & Infrastructure Income Fund)
• Purpose Global Resource Fund (formerly LOGiQ Resource Growth and Income Class and Redwood Resource Growth & Income Fund)
• Purpose Special Opportunities Fund (formerly LOGiQ Special Opportunities Class and Redwood Special Opportunities Fund)
• Purpose Strategic Investment Grade Bond Fund (formerly LOGiQ Tactical Bond Class and Redwood Tactical Credit Fund)
• Purpose Global Innovators Fund (formerly LOGiQ Global Opportunities Class, Redwood Global Opportunities Fund and Redwood Global Innovators Fund)