McLean Asset Management Ltd. et al.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from sections 15.3(2), 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1) and 15.8(3)(a.1) and 15.1.1 of National Instrument 81-102 Investment Funds to permit two new prospectus qualified alternative mutual funds that have not distributed securities under a simplified prospectus in a jurisdiction for 12 consecutive months to include in its sales communications past performance data relating to a period when the funds' securities were previously distributed to investors on a prospectus-exempt basis and to use this past performance data to calculate its investment risk level in accordance with Appendix F Investment Risk Classification Methodology -- Each new alternative mutual fund is managed substantially similarly after it became a reporting issuer as it was during the period prior to becoming a reporting issuer and has substantially similar investment objectives and fee structure.

Relief granted from section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure for the purposes of the relief requested from (i) Item 10(b) of Part B of Form 81-101 Contents of Simplified Prospectus to permit two new alternative mutual funds to use the past performance data for a period when its securities were offered on a prospectus-exempt basis to calculate its investment risk rating in its simplified prospectus, (ii) Item 5 of Part I of Form 81-101F3 Contents of Fund Facts Document to permit two alternative mutual funds to include in its fund facts document past performance data for a period when the funds were offered on a prospectus-exempt basis, (iii) Item 2 of Part I and Item 1.3 of Part II of Form 81-101F3 to permit two alternative mutual funds to include in its fund facts document certain financial data, including the management expense ratio and trading expense ratio, for its units notwithstanding that the funds have not yet filed a management report of fund performance, and (iv) Item 4 of Form 81-101F3 to permit two alternative mutual funds to disclose its investment risk level as determined by including its past performance data in accordance with Appendix F Investment Risk Classification Methodology.

Relief granted from section 4.4 of National Instrument 81-106 Investment Fund Continuous Disclosure for the purposes of the relief requested from Items 3.1(7), 4.1(1), 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 Contents of Annual and Interim Management Report of Fund Performance, to permit two new alternative mutuals to include in its annual and interim management reports of fund performance the past performance and financial data relating to a period when the funds were previously offered on a prospectus-exempt basis.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 15.3(2), 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1), 15.8(3)(a.1), 15.1.1 and 19.1.

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

Item 10(b) of Part B of Form 81-101F1 Contents of Simplified Prospectus.

Items 2, 4 and 5 of Part I and Item 1.3 of Part II of Form 81-101F3 Contents of Fund Facts Document.

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

Items 3.1(7), 4.1(1), 4.1(2), 4.2(1), 4.3(1) and 4.3(2) of Part B and Items 3(1) and 4 of Part C of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance.

April 29, 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 JURISDICITONS AND IN THE MATTER OF MCLEAN ASSET MANAGEMENT LTD. AND GB WEALTH INC. (THE FILERS) AND IN THE MATTER OF THE GBW ALTERNATIVE ALL-WEATHER GROWTH FUND, THE GBW ALTERNATIVE SHORT-TERM GROWTH FUND (THE FUNDS)

DECISION

Background

The principal regulator in the Jurisdiction has received an application (the Application) from the Filers on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) that exempts the Funds from:

(a) sections 15.3(2), 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 each Fund to include performance data in sales communications notwithstanding that: (i) the performance data will relate to a period prior to the Fund offering its securities under a simplified prospectus; and (ii) the Fund has not distributed its securities under a prospectus for 12 consecutive months;

(b) paragraph 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 each Fund to include its past performance data in determining its investment risk level in accordance with the Risk Classification Methodology;

(c) paragraph 15.1.1(b) of NI 81-102, Item 4(2)(a) and Instruction 1 of Item 4 of Form 81-101F3 Contents of Fund Facts Document (Form 81-101F3) to permit each 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 each Fund to use its past performance data to calculate its investment risk level 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) from 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), 15.3(4)(c), 15.6(1)(a)(i), 15.6(1)(d), 15.8(2)(a.1), and 15.8(3)(a.1) of NI 81-102 to permit each Fund to include in its fund facts documents past performance data of the Fund notwithstanding that: (i) the performance data relates to a period prior to the Fund offering its securities under a simplified prospectus; and (ii) the Fund has not distributed its securities under a simplified prospectus for 12 consecutive months;

(g) from 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);

(h) from items 3.1(7) and 4.1(1) in respect of the requirement to comply with Sections 15.3(2) and 15.3(4)(c) of NI 81-102, 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 each Fund to include in its annual and interim management reports of fund performance (individually, an MRFP and, collectively, the MRFPs) past performance data and financial highlights notwithstanding that such performance data and financial highlights relate to a period prior to the Fund offering its securities under a simplified prospectus (together, with relief under paragraph (g), the NI 81-106 Relief); and

(i) Instruction (3) of Item 2 of Part I, Items 1.3(2), 1.3(3) and 1.3(4) of Part II, and Instructions (3), (5) and (7.1) of Item 1.3 of Part II of Form 81-101F3 to permit the Funds to include in their respective fund facts certain financial date, including the management expense ratio and trading expense ratio, for each series of units of the Funds notwithstanding that neither Fund has yet filed a MRFP,

(collectively, the Requested Relief).

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

(i) the Ontario Securities Commission is the principal regulator; and

(ii) the Filers have provided notice pursuant to subsection 4.7(1) of Multilateral Instrument 11-202 Passport System (MI 11-102) that the Requested Relief is intended to be relied upon in each of the provinces of Canada (the Other Jurisdictions and, together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined National Instrument 14-101 Definitions (NI 14-101), MI 11-102 and NI 81-102 have the same meaning if used in this decision unless otherwise defined herein.

Representations

This Decision is based on the following facts represented by the Filers:

The Filers and the Funds

1. McLean Asset Management Ltd. (McLean) is incorporated under the laws of Ontario with its head office and principal place of business located in Toronto, Ontario.

2. McLean is registered as an investment fund manager in the provinces of Ontario, Québec and Newfoundland and Labrador. McLean is also registered as a portfolio manager in the provinces of Ontario and Alberta.

3. McLean acts as the trustee, investment fund manager and portfolio manager of the Funds.

4. GB Wealth Inc. (GB Wealth) is incorporated under the laws of Ontario with its head office and principal place of business located in Toronto, Ontario.

5. GB Wealth is registered as a portfolio manager and commodity trading manager in the Province of Ontario.

6. Each of the Funds is an open-end investment fund established as a trust under the laws of Ontario on August 1, 2023 (the Inception Date) pursuant to a declaration of trust, as the same may be amended, restated, and/or supplemented from time to time.

7. GB Wealth has acted as the sub-adviser of the Funds since the Inception Date and will be appointed by McLean to act as the portfolio manager of the Funds as part of the Public Offering.

8. Each of the Funds currently consist of two series (each, a Series) of units, being the Series F and the Series I units.

9. Each of the Funds intend to offer the Series F and Series I units to the public in each of the provinces of Canada pursuant to a simplified prospectus and fund facts documents (the Public Offering). The Funds have filed a preliminary simplified prospectus and preliminary fund facts documents dated March 31, 2025 with the OSC and expect to file a final simplified prospectus and final fund facts documents in each of the Jurisdictions on or about April 30, 2025 or as soon as possible thereafter. Upon issuance of a receipt of the final simplified prospectus, the Funds will become a reporting issuer in each Jurisdiction and will become subject to the requirements of NI 81-102 and the requirements of NI 81-106 applicable to reporting issuer mutual funds.

10. The Filers and the Funds are not in default of securities legislation in any Jurisdiction.

The Requested Relief

11. The Series F and Series I units of the Funds have been offered to investors on a private placement basis in accordance with National Instrument 45-106 -- Prospectus Exemptions in one or more Jurisdictions other than Ontario and in accordance with the Securities Act (Ontario) in Ontario since August 31, 2024 (the Series Launch Date).

12. Since the Inception Date, each Fund has prepared audited annual financial statements and unaudited interim financial statements in accordance with NI 81-106.

13. Since the Inception Date, each Fund has complied with the investment restrictions and practices contained in NI 81-102 applicable to mutual funds.

14. Each Fund will be managed in substantially the same manner after it becomes a reporting issuer as it was prior to becoming a reporting issuer.

15. In connection with each Fund becoming a reporting issuer:

(a) the investment objective of the Fund will not change;

(b) the management fees charged on the series of units of the Fund offered under the Public Offering will not be higher than the management fees charged on the series of units of the Fund that are offered on a private placement basis;

(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 management of the Fund) and to provide additional features that are available to investors of mutual funds managed by McLean, as described in the simplified prospectus and fund facts documents of the Fund;

(d) the management expense ratio of the Fund is not expected to increase by more than 0.15%, which the Filers consider to be an immaterial amount; and

(e) the trading expense ratio of the Series F and Series I units of the Funds is not expected to change.

16. The Filers propose to present the performance data of the Funds for the time period since the Series Launch Date in sales communications pertaining to the Funds. Without the Requested Relief, sales communications pertaining to the Funds could not include performance data of a Fund that relate to a period prior to it becoming a reporting issuer, and a Fund could not provide performance data in its sales communications until the Fund has distributed securities under a simplified prospectus for at least 12 consecutive months.

17. As a reporting issuer, each Fund will be required under NI 81-101 to prepare and file fund facts documents.

18. The Filers propose to use each Fund's past performance data for the time period commencing as of the Series Launch Date to determine the investment risk level of the Series F and Series I units of the Fund, and to disclose that investment risk level in its simplified prospectus and fund facts documents for each such series of units of the Fund. Without the Requested Relief, the File, in determining and disclosing the Fund's investment risk level in its simplified prospectus and fund facts documents for each series of units of the Fund, cannot use the past performance date of a Fund that relates to a period prior to the Fund becoming a reporting issuer.

19. The Filers propose to include in the fund facts documents for each series of units of the Funds past performance data 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 applicable Fund becoming a reporting issuer. Without the Requested Relief, the fund facts documents for each series of units of a Fund could not include performance data of the Fund that relate to a period prior to it becoming a reporting issuer.

20. The Filers propose to use the management expense ratio, trading expense ratio and fund expenses of the units of each Fund that relate to a period prior to it becoming a reporting issuer in the "Fund expenses" sections of the fund facts documents. Without the Requested Relief, the fund facts documents for the Funds cannot include the management expense ratio, trading expense ratio and fund expenses of each series of units of the Funds that relate to a period prior to it becoming a reporting issuer.

21. As a reporting issuer, each 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. Without the Requested Relief, the MRFPs of a Fund could not include financial highlights and performance data of the Fund that relate to a period prior to it becoming a reporting issuer.

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

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 Requested Relief is granted provided that:

(a) any sales communication, fund facts document and MRFP that contains performance data of the units of a Fund relating to a period 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 Filers obtained exemptive relief on behalf of the Fund to permit the disclosure of 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;

(b) the management expense ratio and the trading expense ratio disclosed in any fund facts document are calculated as if the Fund had filed an annual MRFP for its most recently completed financial year and as if, in doing so, it had relied on the NI 81-106 Relief; and

(c) the Filers post the financial statements of each Fund since the Inception Date on the Fund's designated website and delivers those financial statements available to investors upon request.

"Darren McKall" 
Manager, Investment Management Division 
Ontario Securities Commission

Application File #: 2025/0187

SEDAR+ File #: 6265802