Manulife Investment Management Limited et al.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted under subsection 62(5) of the Securities Act to permit the extension of a prospectus lapse date by 84 days -- relief granted under subsection 5.1(4) of NI 81-101 Mutual Fund Prospectus Disclosure to combine the simplified prospectus of conventional mutual funds with the simplified prospectus of 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 7, 2025
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 MANULIFE INVESTMENT MANAGEMENT LIMITED (the Filer)
AND
MANULIFE ALTERNATIVE OPPORTUNITIES FUND, MANULIFE STRATEGIC INCOME PLUS FUND (the Existing Alternative Funds)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Existing Alternative Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limit for the renewal of the simplified prospectus, fund facts and ETF facts of the Existing Alternative Funds (the Alternative Funds Prospectus) be extended to the time limit that would apply if the lapse date of the Alternative Funds Prospectus was August 1, 2025 (the Lapse Date Extension), and that grants relief to the Existing Alternative Funds and any alternative mutual fund established or restructured in the future and managed by the Filer (collectively with the Existing Alternative Funds, the Alternative Funds) from the requirement in subsection 5.1(4) of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), which 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, 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 all provinces and territories of Canada (the Jurisdictions).
Interpretation
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.
Representations
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation amalgamated under the laws of Canada, with its registered head office located in Toronto, Ontario.
2. The Filer is currently registered as a portfolio manager in each province and territory of Canada, an investment fund manager in each of Ontario, Québec and Newfoundland and Labrador, a commodity trading manager in Ontario and a derivatives portfolio manager in Québec.
3. The Filer is, or will be, the investment fund manager of the Alternative Funds.
4. The Filer is not in default of applicable securities legislation in any of the Jurisdictions.
The Alternative Funds
5. Each of the Alternative Funds is, or will be, an open-end mutual fund established under the laws of the Province of Ontario and is, or will be, a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
6. The securities of each Alternative Fund are, or will be, qualified for distribution in one or more of the Jurisdictions using a simplified prospectus, fund facts and ETF facts document prepared and filed in accordance with the securities legislation of such Jurisdictions. Each Alternative Fund is, or will be, subject to the requirements of NI 81-101 and NI 81-102.
7. The Existing Alternative Funds currently distribute securities in the Jurisdictions under a simplified prospectus dated May 9, 2024.
8. Neither of the Existing Alternative Funds is in default of securities legislation in any of the Jurisdictions.
Reasons for the Simplified Prospectus Consolidation
9. The Filer wishes to combine the simplified prospectus of the Alternative Funds with the simplified prospectus of mutual funds existing today 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 or will act as the investment fund manager (the Conventional Funds) in order to reduce renewal, printing and related costs. Offering the Alternative Funds using the same simplified prospectus as the Conventional Funds would facilitate the distribution of the Alternative Funds in the Jurisdictions under the same prospectus disclosure and enable the Filer to streamline disclosure across the Filer's fund platform.
10. 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 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 Funds.
11. The ability to file the same simplified prospectus for the Alternative Funds and the Conventional Funds will ensure that the Filer can make corresponding changes to the operational and administrative features of the Alternative Funds and the Conventional Funds in a consistent manner, if required.
12. Investors will continue to receive the fund facts and ETF facts document(s) as applicable when purchasing securities of the Alternative Funds as required by applicable securities legislation. The form and content of the fund facts and ETF facts document(s) of the Alternative Funds will not change as a result of the Exemption Sought.
13. The simplified prospectus of the Alternative Funds will continue to be provided to investors, upon request, as required by applicable securities legislation.
14. 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. There is no reason why mutual funds filing a simplified prospectus under NI 81-101 should be treated differently from ETFs filing a prospectus under NI 41-101.
Reasons for the Lapse Date Extension
15. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the Alternative Funds Prospectus is May 9, 2025. Accordingly, under subsection 62(2) of the Act, the distribution of securities of each Existing Alternative Fund would have to cease on its current lapse date unless: (i) the Existing Alternative Funds file a pro forma simplified prospectus at least 30 days prior to its current lapse date; (ii) the final simplified prospectus is filed no later than 10 days after its current lapse date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days after its current lapse date.
16. The Filer is the investment fund manager of certain Conventional Funds (the Manulife Funds) that currently distribute their securities under a simplified prospectus with a lapse date of August 1, 2025 (the Manulife Funds Prospectus).
17. It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal simplified prospectus, fund facts and ETF facts documents for the Manulife Funds, and unreasonable to incur the costs and expenses associated therewith, so that the renewal simplified prospectus, fund facts and ETF facts documents of the Manulife Funds can be filed earlier with the renewal simplified prospectus, fund facts and ETF facts documents of the Existing Alternative Funds.
18. If the Exemption Sought is not granted, it will be necessary to file the Alternative Funds Prospectus twice within a short period of time in order to consolidate the Alternative Funds Prospectus with the Manulife Funds Prospectus.
19. The Manager may make minor changes to the features of the Manulife Funds as part of the process of renewing the Manulife Funds Prospectus. As noted above, the ability to file the simplified prospectus of the Existing Alternative Funds with those of the Manulife Funds will ensure that the Manager can make the operational and administrative features of the Existing Alternative Funds and the Manulife Funds consistent with each other, if necessary.
20. There have been no material changes in the affairs of the Existing Alternative Funds since the relevant current prospectus filings.
21. Given the disclosure obligations of the Existing Alternative Funds, should a material change in the business, operations, or affairs of each of the Existing Alternative Funds occur, the current simplified prospectus, fund facts and ETF facts document(s) of the applicable Existing Alternative Fund(s) will be amended as required under the Legislation.
22. New investors of the Existing Alternative Funds will receive delivery of the most recently filed fund facts or ETF facts document(s) of the applicable Existing Alternative Fund(s). The Alternative Funds Prospectus will still be available upon request.
23. The Exemption Sought will not affect the accuracy of the information contained in the Alternative Funds Prospectus and therefore will not be prejudicial to the public interest.
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 Exemption Sought is granted.
SEDAR+ File #: 6238837