CIBC Asset Management Inc. et al.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granting extensions of the lapse dates of two prospectuses to permit their incorporation into a third prospectus when it is renewed -- relief granted from subsection 5.1(4) of NI 81-101 to permit simplified prospectus of alternative mutual funds to be consolidated with simplified prospectus of mutual funds that are not alternative mutual funds.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S. 5, as am., s. 62(5).
National Instrument 81-101 Mutual Fund Prospectus Disclosure, ss. 5.1(4) and 6.1.
March 16, 2023
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 CIBC ASSET MANAGEMENT INC. (the Filer) AND CIBC ALTERNATIVE FUNDS AND CIBC FIXED INCOME FUNDS AS SET OUT IN SCHEDULE A
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the CIBC Fixed Income Funds and CIBC Alternative Funds (the Current Alternative Funds and, together with the CIBC Fixed Income Funds, the Funds and each, aFund) and any alternative mutual fund established or restructured in the future and managed by the Filer or an affiliate of the Filer (collectively with the Current Alternative Funds, the Alternative Funds) for a decision under the securities legislation of the Jurisdiction (the Legislation) that:
(a) the time limits for the renewal of each simplified prospectus and fund facts document of the Funds (each, a Current Prospectus) be extended to those time limits that would apply if the lapse date was August 26, 2023 (the Lapse Date Extension); and
(b) grants relief to the Alternative Funds from the requirement in subsection 5.1(4) of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) that states that a simplified prospectus for an alternative mutual fund must not be consolidated with a simplified prospectus of another mutual fund if the other mutual fund is not an alternative mutual fund (the Simplified Prospectus Consolidation and, together with the Lapse Date Extension, 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 subsection 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 (the Other Jurisdictions and together with Ontario, the Canadian Jurisdictions).
Terms defined in National Instrument 14-101 Definitions, MI 11-102, and National Instrument 81-102 Investment Funds (NI 81-102) 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 incorporated under the laws of Canada and has its head office located in Toronto, Ontario.
2. The Filer is registered as follows: (i) as an investment fund manager in each of the provinces of Quebec, Ontario and Newfoundland and Labrador, (ii) as a portfolio manager in all Canadian Jurisdictions, (iii) as a commodity trading manager in Ontario and (iv) as a derivatives portfolio manager in Quebec.
3. The Filer is the trustee and investment fund manager of the Funds.
4. The Filer is also the trustee and investment fund manager of the Renaissance Investments family of funds, the Axiom Portfolios, the Renaissance Private Pools and the CIBC Fixed Income Pools as listed in Schedule A (collectively, the Other Funds), which are offered in each of the Canadian Jurisdictions under a simplified prospectus dated August 26, 2022 (the Other Funds Prospectus) and so have a lapse date of August 26, 2023.
5. Neither the Filer nor any of the Funds is in default of securities legislation in any of the Canadian Jurisdictions.
6. Each of the Funds is an open-end mutual fund trust established under the laws of the Province of Ontario and is a reporting issuer in each of the Canadian Jurisdictions.
7. Securities of the CIBC Fixed Income Funds are currently qualified for distribution in each of the Canadian Jurisdictions under a simplified prospectus dated May 6, 2022 (the CFIF Prospectus).
8. Securities of the Current Alternative Funds are currently qualified for distribution in each of the Canadian Jurisdictions under a simplified prospectus dated June 3, 2022, as amended on November 21, 2022 (collectively, the Alternative Funds Prospectus and together with the CFIF Prospectus, the Current Prospectuses).
9. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the CFIF Prospectus is May 6, 2023 (the CFIF Prospectus Lapse Date) and the lapse date of the Alternative Funds Prospectus is June 3, 2023 (the Alternative Funds Prospectus Lapse Date and, together with the CFIF Prospectus Lapse Date, the Current Lapse Dates). Accordingly, under subsection 62(2) of the Act, the distribution of securities of each Fund would have to cease on its respective Current Lapse Date unless: (i) the Fund files a pro forma simplified prospectus at least 30 days prior to its Current Lapse Date; (ii) the Fund files a final simplified prospectus no later than 10 days after its Current Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained by a Fund within 20 days after its Current Lapse Date.
Reasons for the Lapse Date Extension
10. The Filer wishes to combine each of the CFIF Prospectus and the Alternative Fund Prospectus with the Other Funds Prospectus in order to reduce renewal, printing and related costs. Offering the Funds under the same renewal simplified prospectus as the Other Funds would facilitate the distribution of the Funds in the Canadian Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer's fund platform.
11. Even though the Current Alternative Funds are alternative mutual funds, the Funds share many common operational and administrative features with each other and with the Other Funds and combining them in the same simplified prospectus will allow investors to more easily compare the features of the Other Funds and the Funds.
12. The Filer may make changes to the features of the Other Funds as part of the process of renewing the Other Funds Prospectus. The ability to combine the simplified prospectuses of the Funds with that 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.
13. If the Lapse Date Extension is not granted, it will be necessary to renew the CFIF Prospectus and the Alternative Funds Prospectus twice within a short period of time in order to consolidate the CFIF Prospectus and the Alternative Funds Prospectus with the Other Funds Prospectus and it would be unreasonable for the Filer to incur the costs and expenses associated therewith, given investors would not be prejudiced by the Lapse Date Extension.
14. There have been no material changes in the affairs of the Funds since the date of each Fund's respective Current Prospectus, other than as described in the amendment to the Alternative Funds Prospectus. Accordingly:
(a) the CFIF Prospectus and current fund facts document(s) of each of the CIBC Fixed Income Funds represent current information regarding the CIBC Fixed Income Funds, and
(b) the Alternative Funds Prospectus and current fund facts document(s) of each of the Current Alternative Funds represent current information regarding the Current Alternative Funds.
15. Given the disclosure obligations of the Filer and the Funds, should any material change in the business, operations or affairs of any of the Funds occur, the applicable Current Prospectus and related fund facts document(s) of the impacted Fund(s) will be amended as required under the Act.
16. New investors of the Funds will receive delivery of the most recently filed fund facts document(s) of the applicable Fund(s). The Current Prospectuses of the Funds will remain available to investors upon request.
17. The Lapse Date Extension will not affect the accuracy of the information contained in the Current Prospectuses or fund facts document(s) of each of the Funds, and will therefore not be prejudicial to the public interest.
Reasons for the Simplified Prospectus Consolidation
18. The Filer wishes to combine the simplified prospectus of the Alternative Funds with the simplified prospectus of the mutual funds existing today (currently, the Other Funds Prospectus) or created in the future (i) that are reporting issuers to which NI 81-101 and NI 81-102 apply, (ii) that are not alternative mutual funds, and (iii) for which the Filer acts as the investment fund manager (the Conventional Mutual Funds), in order to reduce renewal, printing and related costs. Offering the Alternative Funds using the same simplified prospectus as the majority of the mutual funds managed by the Filer would facilitate the distribution of the Alternative Funds in the Canadian Jurisdictions under the same prospectus disclosure and enable the Filer to streamline disclosure across the Filer's fund platform.
19. Even though the Alternative Funds are, or will be, alternative mutual funds, they share, or will share, many common operational and administrative features with the Conventional Mutual Funds and combining them in the same simplified prospectus will allow investors to more easily compare the features of the Alternative Funds and the Conventional Mutual Funds.
20. Investors will continue to receive a fund facts document when purchasing securities of an Alternative Fund as required by applicable securities legislation. The form and content of the fund facts document of the Alternative Funds will not change as a result of the Simplified Prospectus Consolidation.
21. The simplified prospectus of the Alternative Funds will continue to be provided to investors, upon request, as required by applicable securities legislation.
22. National Instrument 41-101 General Prospectus Requirements (NI 41-101) does not contain a provision equivalent to subsection 5.1(4) of NI 81-101. Accordingly, an investment fund manager that manages exchange-traded funds (ETFs) is permitted to consolidate a prospectus under NI 41-101 for its ETFs that are alternative mutual funds with a prospectus for its ETFs that are conventional mutual funds. The Filer submits that there is no reason why mutual funds filing a prospectus under NI 81-101 should be treated differently from ETFs filing a prospectus under NI 41-101.
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.