Fund on Fund Relief and the Conflicts Provisions
This article was originally published in the Investment Funds Practitioner in January 2010.
The Director sometimes grants relief under NI 81-102 to facilitate fund on fund arrangements that do not comply with all of the conditions in section 2.5(2) of NI 81-102. Such applications are sometimes accompanied by a parallel application for relief from the conflicts of interest prohibitions under the Act. This second application is normally filed out of concern that the exemption codified under section 2.5(7) of NI 81-102 may not apply in instances where the fund on fund arrangement is exempt from some of the conditions in section 2.5(2). We generally do not request that applicants file the parallel Act application. We intend to amend section 2.5(7) at the next available opportunity to clarify that it still applies even where a fund has obtained an exemption from some of the conditions in section 2.5(2).