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AGF Investments Inc. and AGF Global Dividend Strategic Equity Fund
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted to conventional mutual fund to file a simplified prospectus, an annual information form, and a fund facts document following the requirements of NI 81-101 as it was in force prior to January 6, 2022 -- Relief granted to permit the Filer to consolidate the mutual fund into its main prospectus upon renewal in June 2023 under the requirements of current NI 81-101 requirements -- relief subject to conditions including that the Filer incorporate the mutual fund into its main prospectus upon renewal in June 2023.
Applicable Legislative Provisions
Securities Act (Ontario), R.S.O. 1990, c. S.5, as am., s. 147.
National Instrument 81-101 Mutual Fund Prospectus Disclosure, s. 6.1.
December 28, 2022
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 AGF INVESTMENTS INC. (the Filer) AND AGF GLOBAL DIVIDEND STRATEGIC EQUITY FUND (the Fund)
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief on behalf of each of the Filer and the Fund, a mutual fund to be established and managed by the Filer and that will be a reporting issuer subject to National Instrument 81-102 Investment Funds (NI 81-102). The Exemption Sought (as defined below) is to permit the Fund to be exempted from filing its initial offering documents in accordance with the current provisions of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) and the current form requirements in NI 81-101 that each came into force on January 6, 2022 (collectively, the New NI 81-101 Requirements), such that the Fund may be permitted to file a simplified prospectus, an annual information form and a fund facts document (Fund Facts) in reliance on the provisions of NI 81-101 and on the requirements of Form 81-101F1 Contents of Simplified Prospectus (Form 81-101F1), Form 81-101F2 Contents of Annual Information Form (Form 81-101F2) and NI 81-101F3 Contents of Fund Facts Document (Form 81-101F3), as they were each in force immediately prior to the implementation of the New NI 81-101 Requirements (collectively, the Previous NI 81-101 Requirements) (the Exemption Sought).
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).
Terms defined in National Instrument 14-101 Definitions (NI 14-101), MI 11-102 and NI 81-101 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation amalgamated under the laws of the Province of Ontario, with its head office located in Toronto, Ontario.
2. The Filer is registered in the categories of (a) exempt market dealer in the Provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan, (b) portfolio manager in each of the provinces and territories of Canada, (c) investment fund manager in the Provinces of Alberta, British Columbia, Newfoundland and Labrador, Ontario and Quebec, (d) a mutual fund dealer in the Provinces of British Columbia, Ontario and Quebec and (e) a commodity trading manager in the Province of Ontario.
3. The Filer will be the manager of the Fund.
4. The Filer is not in default of securities legislation in any province or territory of Canada (the Jurisdictions).
5. If the Exemption Sought is granted, the securities of the Fund will be qualified for distribution in one or more of the Jurisdictions and distributed to investors pursuant to a simplified prospectus, an annual information form and Fund Facts prepared in accordance with the Previous NI 81-101 Requirements.
6. On October 7, 2021, the Canadian Securities Administrators published amendments implementing eight initiatives aimed at reducing regulatory burden for investment funds. One of the initiatives was to consolidate the then form of simplified prospectus and the then form of annual information form for investment fund issuers, into a single simplified prospectus. The amendments repealed the requirement for a mutual fund in continuous distribution to file an annual information form by repealing Form 81-101F1 and replacing it with a new, streamlined Form 81-101F1. Although the amendments came into force on January 6, 2022, the Canadian Securities Administrators provided an exemption from compliance with the New 81-101 Simplified Prospectus Requirements for the period before September 6, 2022.
7. As it is now past September 6, 2022, without the Exemption Sought, the Filer would be required to prepare and file a simplified prospectus and Fund Facts in respect of the Fund pursuant to the New NI 81-101 Requirements.
8. Once the Fund is created and launched, the Filer plans to incorporate the Fund into the renewal simplified prospectus for its fund family known as the "AGF Platform Funds", which currently have a lapse date of June 22, 2023 (the AGF Platform Funds' Renewal Prospectus). The AGF Platform Funds Renewal Prospectus will be renewed under a simplified prospectus only, in accordance with the requirements of the New NI 81-101 Requirements, and will also file Fund Facts for each AGF Platform Fund in accordance with the New NI 81-101 Requirements. As of the date hereof, the AGF Platform Funds currently offer, and will continue to offer until the date of renewal on or about June 22, 2023, securities under a simplified prospectus, annual information form and Fund Facts which are based on the provisions of the Previous NI 81-101 Requirements.
9. As the Filer has not yet prepared or finalized an updated form of simplified prospectus or Fund Facts that is or will be compliant with the New NI 81-101 Requirements, the Filer therefore submits that it is more efficient and expedient to draft and file a simplified prospectus, annual information form and Fund Facts for the Fund using the Previous 81-101 Requirements, which is consistent with the offering documents currently employed by the other mutual funds in the AGF Platform Funds family.
10. This approach will also allow the Filer to avoid the administrative difficulties and inefficiencies, as well as the potential duplication of resources and effort, of seeking to finalize a new form of simplified prospectus and Fund Facts for the sole purpose of creating and launching the Fund, and instead, will afford the Filer more time to consider the New NI 81-101 Requirements wholistically on behalf of the AGF Platform Funds as a family of funds upon their renewal in 2023. Accordingly, the Exemption Sought, if granted, is expected to result in cost savings to the Filer.
11. The Filer will ensure that any disclosure contained in the simplified prospectus, annual information form and Fund Facts for the Fund will be accurately incorporated into the AGF Platform Funds' Renewal Prospectus in June 2023, at which time the offering documents of the AGF Platform Funds, including the Fund, will be renewed utilizing a form of simplified prospectus and Fund Facts that are each in compliance with the New NI 81-101 Requirements.
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 Exemption Sought is granted provided that:
(a) the Filer files the simplified prospectus, annual information form and Fund Facts in respect of the Fund in accordance with the Previous NI 81-101 Requirements;
(b) the Filer incorporates the Fund into the AGF Platform Funds' Renewal Prospectus in June 2023, which simplified prospectus and Fund Facts will be in compliance with the New NI 81-101 Requirements; and
(c) the Filer includes disclosure regarding this decision under the heading "Exemptions and Approvals" in the Fund's annual information form.