Relief granted to permit domestic and cross-border (U.S.) inter-fund trading
The Canadian Securities Administrators has granted exemptive relief to a group of investment funds and a registered adviser to permit domestic and cross-border (U.S.) inter-fund trading. The relief is expected to help investment funds execute transactions more efficiently and streamline their compliance procedures without compromising investor protection.
This exemptive relief decision gives investment funds more flexibility on how to comply with the market integrity requirements in section 6.1 of National Instrument 81-107 Independent Review Committee for Investment Funds as compared to prior decisions granting similar relief.
The conditions of this exemptive relief decision permit compliance with the market integrity requirements by using one of the following to execute an inter-fund trade: (a) a third-party Investment Industry Regulatory Organization of Canada (IIROC) registered dealer; or (b) provided certain conditions are met, a third-party broker or dealer based and registered in the U.S. Additionally, in certain circumstances, inter-fund trades in Canada-U.S. inter-listed securities executed by a third-party U.S. broker or dealer may be printed on a marketplace in Canada or in accordance with applicable U.S. market transparency obligations.
This relief exempts a group of funds from subsection 4.2(1) of National Instrument 81-102 Investment Funds and a registered adviser from subparagraphs 13.5(2)(b)(ii) and (iii) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Dimitri Bollegala, Legal Counsel, Investment Funds and Structured Products Branch
Susan Thomas, Senior Legal Counsel, Investment Funds and Structured Products Branch