Genus Capital Management Inc.

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 81-102 Investment Funds.

National Instrument 81-102 Investment Funds (NI 81-102), s. 19.1 -- Exemption from requirements of past performance data in sales communications in Part 15 of NI 81-102 -- Before becoming a reporting issuer, the fund did not deviate from NI 81-102 investment restrictions and its past performance is reflective of how the fund would have performed as a reporting fund; although the fund is using a different series when reporting on past performance, the only difference in performance is due to the different management fees paid by each series; the fund's prior cost expenses are not materially different from a reporting fund; the fund discloses in the sales communications, fund facts document and MRFP that the past performance data is from a period when the fund was not a reporting issuer and that its expenses would have been higher had it been a reporting issuer; the manager posts on its website and makes available to investors the financial statements of the fund for all periods for which it is using the past performance.

National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), s. 6.1 -- Exemption from the fund facts form requirement in order to include past performance data -- Before becoming a reporting issuer, the fund did not deviate from NI 81-102 investment restrictions and its past performance is reflective of how the fund would have performed as a reporting fund; although the fund is using a different series when reporting on past performance, the only difference in performance is due to the different management fees paid by each series; the fund's prior cost expenses are not materially different from a reporting fund; the fund discloses in the sales communications, fund facts document and MRFP that the past performance data is from a period when the fund was not a reporting issuer and that its expenses would have been higher had it been a reporting issuer; the manager posts on its website and makes available to investors the financial statements of the fund for all periods for which it is using the past performance.

National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106), s. 17.1 -- Exemption from the MRFP form requirement in order to include past performance data -- Before becoming a reporting issuer, the fund did not materially deviate from NI 81-102 investment restrictions and its past performance is reflective of how the fund would have performed as a reporting fund; although the fund is using a different series when reporting on past performance, the only difference in performance is due to the different management fees paid by each series; the fund's prior cost expenses are not materially different from a reporting fund; the fund discloses in the sales communications, fund facts document and MRFP that the past performance data is from a period when the fund was not a reporting issuer and that its expenses would have been higher had it been a reporting issuer; the manager posts on its website and makes available to investors the financial statements of the fund for all periods for which it is using the past performance.

Exemption from requirements to calculate risk ratings -- A mutual fund wants relief to be able to use its past performance data to calculate its investment risk rating in its simplified prospectus -- Before becoming a reporting issuer, the fund did not deviate from NI 81-102 investment restrictions; the fund will be managed substantially similar in the period after becoming a reporting issuer as it was becoming a reporting issuer.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure ss. 2.1 and 6.1.

National Instrument 81-102 Investment Funds, ss. 15.3, 15.6, 15.8, 15.1.1, and 19.1.

National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 4.4 and 17.1.

January 9, 2024

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF GENUS CAPITAL MANAGEMENT INC. (the Filer) AND IN THE MATTER OF GENUS HIGH IMPACT EQUITY FUND (the Fund)

DECISION

Background

¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer on behalf of the Fund for a decision under the securities legislation of the Jurisdictions (the Legislation) for relief, exempting the Fund from:

(a) subsection 15.3(2) and paragraphs 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1) and 15.8(3)(a.1) of National Instrument 81-102 Investment Funds (NI 81-102) to permit the Fund to include performance data in sales communications relating to Series F units of the Fund notwithstanding that:

(i) the past performance data will relate to a period prior to the Fund offering its securities under a simplified prospectus;

(ii) the actual performance data will relate to Series O units of the Fund, and such actual past performance data would be used as the past performance data of the Series F units; and

(iii) the Fund has not distributed its securities under a prospectus for 12 consecutive months.

(b) subsection 15.1.1(a) of NI 81-102 and Items 2 and 4 of Appendix F -- Investment Risk Classification Methodology to NI 81-102 (the Risk Classification Methodology) to permit the Fund to include its past performance data in determining its investment risk level in accordance with the Risk Classification Methodology;

(c) subsection 15.1.1(b) of NI 81-102 and Item 4(2)(a) and Instruction (1) of Item 4 of Form 81-101F3 Contents of Fund Facts Document (Form 81-101F3), to permit the Fund to disclose its investment risk level as determined by including its past performance data in accordance with the Risk Classification Methodology;

(d) item 10(b) of Part B of Form 81-101F1 Contents of Simplified Prospectus (Form 81-101F1) to permit the Fund to use its past performance data to calculate its investment risk rating in its simplified prospectus;

(e) section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) for the purposes of the relief requested herein from Form 81-101F1 and Form 81-101F3;

(f) items 5(2), 5(3) and 5(4), and Instruction (1) of Part I of Form 81-101F3 in respect of the requirement to comply with sections 15.3(2), 15.6(1)(a)(i), 15.3(4)(c), 15.6(1)(d), 15.8(2)(a.1) and 15.8(3)(a.1) of NI 81-102 to permit the Fund to include in its fund facts past performance data relating to Series F units of the Fund notwithstanding that:

(i) the past performance data relates to a period prior to the Fund offering its securities under a simplified prospectus;

(ii) the actual performance data will relate to its Series O units, and such actual past performance data would be used as the past performance data of the Series F units; and

(iii) the Fund has not distributed its securities under a simplified prospectus for 12 consecutive months.

(collectively, the relief under paragraphs (a), (b), (c), (d), (e) and (f), the NI 81-101 and 81-102 Relief);

(g) section 4.4 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) for the purposes of the relief requested herein from Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance (Form 81-106F1); and

(h) items 3.1(7) and 4.1(1) in respect of the requirement to comply with section 15.3(2) and 15.3(4)(c) of NI 81-102, Items 4.1(2), 4.2(1), 4.3(1) and 4.3(2) of Part B of Form 81-106F1 and Items 3(1) and 4 of Part C of Form 81-106F1, to permit the Fund to include in its annual and interim management reports of fund performance (individually an MRFP and collectively, the MRFPs) past performance data notwithstanding that such performance data relates to a period prior to the Fund offering its securities under a simplified prospectus

(together, the relief under paragraphs (g) and (h), the NI 81-106 Relief),

(collectively such exemptive relief, the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the British Columbia Securities Commission is the principal regulator for the Application;

(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 other than the Jurisdictions; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

¶ 3 This decision is based on the following facts represented by the Filer:

The Filer

1. the Filer is a corporation organized under the laws of Canada with a head office in Vancouver, British Columbia;

2. the Filer is registered as an investment fund manager in British Columbia, Newfoundland and Labrador, Ontario and Quebec, as a portfolio manager in Alberta, British Columbia, Manitoba, New Brunswick, Northwest Territories, Newfoundland and Labrador, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, and Yukon, and as an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan and Yukon;

3. the Filer was previously a reporting issuer and ceased to be a reporting issuer on September 9, 2019; the Filer is not currently a reporting issuer in any Canadian jurisdiction and is not in default of securities legislation in any Canadian jurisdiction;

The Fund

4. the Fund is an open-end mutual fund established under the laws of the province of British Columbia as a trust on May 15, 2014 (the Inception Date) and governed by an amended and restated trust agreement made as of October 20, 2017, as amended;

5. the Filer is the manager and portfolio advisor of the Fund;

6. RBC Investor Services Trust acts as trustee of the Fund;

7. the Fund currently consists of five series of units:

(a) Series O units, which have been offered to investors on a private placement basis in accordance with National Instrument 45-106 Prospectus Exemptions (NI 45-106) since the Inception Date;

(b) Series F units, which were previously offered publicly from October 23, 2017 to September 6, 2019; and

(c) Series A units, Series C units and Series I units, which have not been offered to any investors and are not available for purchase.

8. the Fund does not intend to offer Series O units under a simplified prospectus and will continue to offer Series O units to investors on a private placement basis in accordance with NI 45-106;

9. Series F units have never been sold, whether on a private placement basis or publicly, to any investors;

10. the Fund is not in default of securities legislation of any Canadian jurisdiction;

11. the Fund intends to offer Series F units to the public in each of the provinces and territories of Canada pursuant to a simplified prospectus and fund facts documents (the IPO); the Fund filed a preliminary simplified prospectus and fund facts for Series F units with the securities regulator in each of the provinces and territories of Canada on November 30, 2023, and expects to file a final simplified prospectus and fund facts on January 25, 2024; upon issuance of a receipt for the final simplified prospectus, the Fund will become a reporting issuer in each of the provinces and territories of Canada and will become subject to the requirements of NI 81-102 and NI 81-106;

12. the investment objective of the Fund is to make positive social and environmental impacts in addition to generating better financial returns; this mandate focuses on investing in global companies who are leaders in areas of sustainability, such as: renewable energy, energy efficiency, green buildings, low negative impact products, as well as innovative companies in the healthcare, education and technology sectors;

13. since the Inception Date, the Fund has prepared audited annual and unaudited semi-annual financial statements in accordance with NI 81-106;

14. since the Inception Date, the Fund has complied with the investment restrictions and practices contained in NI 81-102;

15. since the Inception Date, the investment portfolios of Series F units and Series O units of the Fund have been the same;

16. the Fund will be managed substantially similarly after it becomes a reporting issuer as it was prior to becoming a reporting issuer; as a result of the Fund becoming a reporting issuer:

(a) the Fund's investment objectives will not change;

(b) the management fee charged to the Fund in respect of the Series F units and the Series O units will not change;

(c) the day-to-day administration of the Fund will not change, other than to comply with the additional regulatory requirements associated with being a reporting issuer (none of which will impact the portfolio management of the Fund); and

(d) the management expense ratio of the Series O units of the Fund is not expected to increase by more than 0.10%, which the Filer considers to be an immaterial amount.

17. the Filer proposes that the actual past performance data of Series O units of the Fund for the time period since the Inception Date be used as the past performance data of the Series F units of the Fund during such period, adjusted for the difference in management fee between the Series O units and the Series F units of the Fund; the only difference in performance between the Series O and the Series F units of the Fund since the Inception Date would have been due to the different management fees paid by each such series of units of the Fund;

18. without the Exemption Sought, sales communications pertaining to Series F units of the Fund cannot include performance data of the Fund that relate to a period prior to it becoming a reporting issuer;

19. without the Exemption Sought, sales communications pertaining to Series F units of the Fund would not be permitted to include performance data until the Fund has distributed securities under a simplified prospectus for 12 consecutive months;

20. as a reporting issuer, the Fund will be required under NI 81-101 to prepare and file a fund facts;

21. the Filer proposes to use the Fund's past performance data for the time period since the Inception Date to determine the investment risk level of the Series F units of the Fund, and to disclose that investment risk level in its simplified prospectus and fund facts document; without the Exemption Sought, the Filer, in determining and disclosing the Fund's investment risk level in its simplified prospectus and fund facts document for Series F units of the Fund, cannot use the past performance data of the Fund that relates to a period prior to the Fund becoming a reporting issuer;

22. the Filer proposes to include in the fund facts for the Series F units of the Fund the past performance data of Series O units in the disclosure required by Items 5(2), 5(3) and 5(4) under the sub-headings Year-by-year returns, Best and worst 3-month returns and Average return, respectively, related to periods prior to the Fund becoming a reporting issuer. Without the Exemption Sought, the fund facts for the Series F units of the Fund cannot include performance data of the Fund that relate to a period prior to it becoming a reporting issuer;

23. as a reporting issuer, the Fund will be required under NI 81-106 to prepare and send MRFPs to all holders of its securities on an annual and interim basis;

24. without the Exemption Sought, the MRFPs of the Fund cannot include financial highlights and performance data of Series F units of the Fund that relate to a period prior to it becoming a reporting issuer;

25. the performance data and other financial data of the Fund for the time period before it became a reporting issuer is significant and meaningful information for existing and prospective investors in the Fund;

26. as the Fund has prepared annual and interim financial statements in accordance with the requirements of NI 81-106 since its Inception Date, the past performance data of the Fund is based on the same standard of financial statement disclosure that is used by mutual funds to which NI 81-102 applies; and

27. in the absence of the Exemption Sought, investors in the Fund following the IPO will have no information about the Fund's past performance or financial highlights on which to base their investment decision.

Decision

¶ 4 Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:

(a) any sales communication, fund facts documents and MRFP that contains past performance data of the units of the Fund relating to a period of time prior to when the Fund was a reporting issuer discloses that:

(i) the Fund was not a reporting issuer during such period;

(ii) the expenses of the Fund would have been higher during such period had the Fund been subject to the additional regulatory requirements applicable to a reporting issuer;

(iii) the Filer obtained exemptive relief on behalf of the Fund to permit the disclosure of past performance data of the units of the Fund relating to a period prior to when the Fund was a reporting issuer; and

(iv) with respect to any MRFP, the financial statements of the Fund for such period are posted on the Fund's website and are available to investors upon request; and

(b) the Filer posts the financial statements of the Fund since the Inception Date on the Fund's designated website and delivers those financial statements to investors upon request.

Application File #: 2023/0599

SEDAR+ File #: 6059266