Securities Law

BCN 2005/27 - Adoption of National Instrument 81-106 Investment Fund Continuous Disclosure and Related Instruments [BCN - Lapsed]

Published Date:	2005-05-25
Rescinded Date:	2012-05-31

Concurrently Published:

Substance and purpose of the Instrument
The Canadian Securities Administrators (CSA) have developed a nationally harmonized set of continuous disclosure (CD) requirements for investment funds that are reporting issuers, and in some provinces for certain mutual funds that are not reporting issuers. On March 11, 2005 with BCN 2005/14, we published advance notice that we expected to adopt the CD requirements.

The CD requirements for investment funds are set out in

National Instrument 81-106 Investment Fund Continuous Disclosure
(NI 81-106),
Form 81-106F1 Management Report of Fund Performance, (together the
NI 81-106 Instruments) and
Companion Policy 81-106CP Investment Fund Continuous Disclosure
(81-106CP).

Among other things, the NI 81-106 Instruments sets out the obligations of investment funds that are reporting issuers with respect to financial statements, a management report of fund performance, material change reporting, and proxy voting. They also

harmonize CD requirements among Canadian jurisdictions;
replace most existing local CD requirements;
enhance the consistency of disclosure for different types of investment funds.

Consequential amendments
In order to implement the NI 81-106 Instruments, we needed to amend, repeal, or rescind a number of national instruments, forms, and policies, as well as a number of BC rules, instruments, forms and policies. This notice lists all of those changes, and the new instrument we needed to make in order to implement the NI 81-106 Instruments.

National Amendments

We are amending:

National Instrument 81-101 Mutual Fund Prospectus Disclosure
Form 81-101F1 Contents of Simplified Prospectus
Form 81-101F2 Contents of Annual Information Form
Companion Policy 81-101CP
National Instrument 81-102 Mutual Funds
Companion Policy 81-102CP
National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR)
National Instrument 81-104 Commodity Pools
Companion Policy 81-104CP
National Instrument 51-102 Continuous Disclosure Obligations
National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency

We are repealing or revoking:

National Instrument 54-102 Interim Financial Statement and Report Exemption
National Policy 31 Change of Auditor of a Reporting Issuer
National Policy 50 Reservations in an Auditor’s Report
National Policy 51 Changes in the Ending Date of a Financial year and in Reporting Status

Local Amendments
We are also amending a number of sections in the Securities Rules, amending or repealing certain local instruments and policies in conjunction with implementing the NI 81-106 Instruments and are amending or repealing certain local forms as follows:

We are amending the following documents:

BC Policy 31-601 Registration Requirements
BC Policy 41-601 Prospectus Filing Requirements
BC Instrument 45-512 Real Estate Securities
BC Instrument 51-508 Exemption for interim periods in non-standard financial years
BC Instrument 51-801 Implementing National Instrument 51-102 Continuous Disclosure Obligations
National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (adopted in BC as a BC Instrument)

We are revoking the following documents:

BC Interpretation Note 52-701 Accounting for Business Combinations and Corporate Reorganizations
BC Instrument 53-502 Relief from concurrent delivery of financial statements and quarterly reports
BC Instrument 52-504 Directors’ Review of Interim Financial Statements
BC Instrument 81-506 Exemption for Mutual Funds from Delivering Financial Statements

Act Amendments
In 2003, the legislature passed the Securities Amendment Act, 2003 c. 24, which includes provisions to repeal sections 85, 117 and 119(1) of the current Securities Act and to make minor amendments to s. 155(1)(b) to correct cross-references to reflect the repeal of the noted sections. We will request an Order in Council to proclaim these amendments in the summer. In the meantime, BCI 81-801 provides an exemption from these sections, provided you comply with the equivalent sections in the NI 81-106 Instruments.

The new Securities Act S.B.C. 2004, c.43, when in force, already addresses the issues raised by these amendments, and therefore would not require any further amendments.

Forms
The Executive Director is amending and respecifying the following forms in BCP 13-601 Required Forms:

Form 33-906F Statement of Financial Condition (Audited)
Form 41-601F Information Required in a Prospectus
Form 51-901F Quarterly and Year End Report (rescinded effective June 1, 2006)
Form 81-901F Information Required to be Included in the Financial Statements of a Mutual Fund (rescinded effective June 1, 2006)

The amendments to the Securities Rules eliminate duplicative requirements between the rules and the NI 81-106 Instruments.

New instrument
We are adopting BC Instrument 81-801 Implementing National Instrument 81-106 Investment Fund Continuous Disclosure. This BC Instrument provides exemptions from certain requirements in the Securities Act and Securities Rules, provided the issuer complies with NI 81-106 for a period of time. It essentially provides a transition for investment funds so that they will continue to comply with the currently continuous disclosure reporting obligations until NI 81-106 applies to them.

Effective date
The effective date for the CD requirements, and most of the instruments, forms or policies that we have made, amended, rescinded or revoked is June 1, 2005.

In some cases, we needed to keep the document for a period of time to allow for an orderly transition. The following chart illustrates what documents or provisions have effective dates other than June 1, 2005.

Document	Section(s)	Effective Date
Securities Rules	s. 152	Repeal June 1, 2006
Form 81-101F1 Contents of Simplified Prospectus	Part B: Item 8, Item 11, s. 13.1 of Item 13	Repeal October 27, 2006
NI 81-101 Mutual Fund Prospectus Disclosure	s. 7.4	Repeal October 27, 2006
Form 51-901F Quarterly and Year End Report		Repeal June 1, 2006
Form 81-901F Information required to be included in the financial statements of a Mutual Fund		Repeal June 1, 2006

Questions
You may refer questions to:

Noreen Bent
Manager and Senior Legal Counsel
Legal Services, Corporate Finance
British Columbia Securities Commission
(604) 899-6741
(800) 373-6393 (in B.C. and Alberta)
nbent@bcsc.bc.ca

Christopher Birchall
Senior Securities Analyst
Corporate Finance
British Columbia Securities Commission
(604) 899-6722
(800) 373-6393 (in B.C. and Alberta)
cbirchall@bcsc.bc.ca

May 25, 2005

Douglas M. Hyndman Martin Eady
Chair Acting Executive Director

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the section Securities Law & Policy: Policies & Instruments.

View PDF of Enactment of NI 81-106 PDF

Please refer to NI 81-106 for Appendix A

Appendix B

National Instrument 81-101 Mutual Fund Prospectus Disclosure
Form 81-101F1 Contents of Simplified Prospectus and
Form 81-101F2 Contents of Annual Information Form
Amendment Instrument

1 National Instrument 81-101 Mutual Fund Prospectus Disclosure is amended by this Instrument.

2 Section 3.1 is amended by adding the following after paragraph 3:

4. The most recently filed annual management report of fund performance of the mutual fund that was filed before or after the date of the simplified prospectus.
5. The most recently filed interim management report of fund performance of the mutual fund that was filed before or after the date of the simplified prospectus and that pertains to a period after the period to which the annual management report of fund performance then incorporated by reference in the simplified prospectus pertains.

3 Part 7 is amended by adding the following after section 7.3:

7.4 Introduction of Management Reports of Fund Performance - Items 8, 11 and 13.1 of Part B of Form 81-101F1 do not apply to a mutual fund that has filed an annual management report of fund performance as required by National Instrument 81-106 Investment Fund Continuous Disclosure.

4 Form 81-101F1 Contents of Simplified Prospectus is amended

(a) by repealing the third bullet point in Item 3.1 of Part A and substituting the following:

Additional information about the Fund is available in the following documents:
- the Annual Information Form;
- the most recently filed annual financial statements;
- any interim financial statements filed after those annual financial statements;
- the most recently filed annual management report of fund performance;
- any interim management report of fund performance filed after that annual management report of fund performance.

These documents are incorporated by reference into this Simplified Prospectus, which means that they legally form part of this document just as if they were printed as a part of this document. You can get a copy of these documents, at your request, and at no cost, by calling [toll-free/collect] [insert the toll-free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your dealer. ,

(b) by repealing the third bullet point in Item 3.2 of Part A and substituting the following:

Additional information about each Fund is available in the following documents:
- the Annual Information Form;
- the most recently filed annual financial statements;
- any interim financial statements filed after those annual financial statements;
- the most recently filed annual management report of fund performance;
- any interim management report of fund performance filed after that annual management report of fund performance.

These documents are incorporated by reference into this document, which means that they legally form part of this document just as if they were printed as a part of this document. You can get a copy of these documents, at your request, and at no cost, by calling [toll-free/collect] [insert the toll-free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your dealer. ,

(c) by repealing Item 14 (2) of Part A and substituting the following:

(2) State, in substantially the following words:

Additional information about the Fund[s] is available in the Fund[’s/s’] Annual Information Form, management reports of fund performance and financial statements. These documents are incorporated by reference into this Simplified Prospectus, which means that they legally form part of this document just as if they were printed as a part of this document.
You can get a copy of these documents, at your request, and at no cost, by calling [toll-free/collect] [insert the toll-free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your dealer or by e-mail at [insert e-mail address].
These documents and other information about the Fund[s], such as information circulars and material contracts, are also available [on the [insert name of mutual fund manager] internet site at [insert website address] or] at www.sedar.com. ,

(d) by repealing Items 8 and 11 and section 13.1 of Item 13 of Part B, and

(e) in Item 13.2 of Part B by:

(i) repealing subsection 13.2 (1) and substituting the following:

(1) Under the heading “Fund Expenses Indirectly Borne by Investors”, provide an example of the share of the expenses of the mutual fund indirectly borne by investors, containing the information and based on the assumptions described in subsection (2). , and

(ii) repealing subsection 13.2 (4) and substituting the following:

(4) The management expense ratio used in calculating the disclosure provided under this Item must be the management expense ratio calculated in accordance with Part 15 of National Instrument 81-106 Investment Fund Continuous Disclosure.

5 Form 81-101F2 Contents of Annual Information Form is amended

(a) in Item 12 by adding the following after subsection (6):

(7) Unless the mutual fund invests exclusively in non-voting securities, describe the policies and procedures that the mutual fund follows when voting proxies relating to portfolio securities including
(a) the procedures followed when a vote presents a conflict between the interests of securityholders and those of the mutual fund’s manager, portfolio adviser, or any affiliate or associate of the mutual fund, its manager or its portfolio adviser;
(b) any policies and procedures of the mutual fund’s portfolio adviser, or any other third party, that the mutual fund follows, or that are followed on the mutual fund’s behalf, to determine how to vote proxies relating to portfolio securities.
State that the policies and procedures that the mutual fund follows when voting proxies relating to portfolio securities are available on request, at no cost, by calling [toll-free/collect call telephone number] or by writing to [address].
(8) State that the mutual fund’s proxy voting record for the most recent period ended June 30 of each year is available free of charge to any securityholder of the mutual fund upon request at any time after August 31 of that year. If the proxy voting record is available on the mutual fund’s website, provide the website address.
INSTRUCTION:
The mutual fund’s proxy voting policies and procedures must address the requirements of section 10.2 of National Instrument 81-106 Investment Fund Continuous Disclosure. ,

(b) by adding the following Instruction at the end of Item 15:

INSTRUCTION:
The disclosure required under Item 15(1) regarding executive compensation for management functions carried out by employees of a mutual fund must be made in accordance with the disclosure requirements of Form 51-102F6 Statement of Executive Compensation. , and

(c) by repealing Item 24 (2) and substituting the following:

(2) State, in substantially the following words:

Additional information about the Fund[s] is available in the Fund [’s/s’] management reports of fund performance and financial statements.
You can get a copy of these documents at no cost by calling [toll-free/collect] [insert the toll-free telephone number or telephone number where collect calls are accepted, as required by section 3.4 of the Instrument], or from your dealer or by e-mail at [insert e-mail address].
These documents and other information about the Fund[s], such as information circulars and material contracts, are also available [on the [insert name of mutual fund manager] internet site at [insert website address] or] at www.sedar.com.

6        (1)      Sections 2, 3, and 5 and paragraphs 4 (a), (b), (c) and (e) of this Instrument come into force on June 1, 2005.
(2)      Paragraph 4 (d) of this Instrument comes into force on October 27, 2006.
(3)      Section 7.4 of National Instrument 81-101 Mutual Fund Prospectus Disclosureis repealed on October 27, 2006.

Companion Policy 81-101CP
Mutual Fund Prospectus Disclosure
Amendment Instrument

1 Companion Policy 81-101CP Mutual Fund Prospectus Disclosure is amended by this Instrument.

2 Section 2.2 is amended by deleting subsection 2.2(2) and substituting the following:

“(2) The approach of the Instrument is to give investors a choice of the amount of information that they wish to consider before making a decision about investing in the mutual fund. Investors will have the option of purchasing the mutual fund's securities after reviewing the information in the simplified prospectus only or after requesting and reviewing the annual information form, financial statements or management reports of fund performance incorporated by reference into the simplified prospectus.”.

3 Section 2.4 is deleted and substituted by the following:

“2.4 Financial Statements and Management Reports of Fund Performance -The Instrument contemplates that the mutual fund’s most recently audited financial statements, and any interim statements filed after those audited statements, as well as the mutual fund’s most recently filed annual management report of fund performance, and any interim management report of fund performance filed after that annual management report, will be provided upon request to any person or company requesting them. Like the annual information form, these financial statements and management reports of fund performance are incorporated by reference into the simplified prospectus. The result is that future filings will be incorporated by reference into the simplified prospectus, while superseding the financial statements and management reports of fund performance previously filed.”

4 Section 7.5 is deleted.

5 Section 8.2 is deleted and substituted by the following:

“8.2 Portfolio Advisers -The AIF Form requires disclosure concerning the extent to which investment decisions are made by particular individuals employed by a portfolio adviser, or by committee, and requires in section 10.3(3)(b) of the AIF Form that certain specified information be given about those individuals principally responsible for the investment portfolio of the mutual fund. Part 11 of National Instrument 81-106 Investment Fund Continuous Disclosure requires a simplified prospectus to be amended if a material change occurs in the affairs of the mutual fund. Reference is made to section 7.1 of Companion Policy 81-106CP Investment Fund Continuous Disclosure for a discussion of when a departure of a high-profile individual from a portfolio adviser of a mutual fund may constitute a material change for the mutual fund. Mutual funds should consider these provisions if and when they encounter the departure of such a person from a portfolio adviser. If such a departure is not a material change for the mutual fund, then there is no requirement for an amendment to a simplified prospectus, subject to the general requirement that a simplified prospectus contain full, true and plain disclosure about the mutual fund.”

6 This Instrument comes into force on June 1, 2005.

Appendix C

National Instrument 81-102Mutual Funds
Amendment Instrument

1 National Instrument 81‑102 Mutual Funds is amended by this Instrument.

2 Section 1.1 is amended

(a) by repealing the definition of“management expense ratio”and substituting the following:

“management expense ratio” means the ratio, expressed as a percentage, of the expenses of a mutual fund to its average net asset value, calculated in accordance with Part 15 of National Instrument 81-106 Investment Fund Continuous Disclosure; ,

(b) by adding the following after the definition of “manager”:

“material change” has the meaning ascribed to that term in National Instrument 81-106 Investment Fund Continuous Disclosure; ,

(c) by repealing the definition of“report to securityholders”and substituting the following:

“report to securityholders” means a report that includes annual or interim financial statements, or an annual or interim management report of fund performance, and that is delivered to securityholders of a mutual fund; ,

(d) by adding the following as Item 6 to paragraph (b) of the definition of“sales communication”:

6. Annual or interim management report of fund performance; ,

(e) by repealing the definition of“significant change”; and

(f) by repealing the definition of“timely disclosure requirements”.

3 Subparagraph 5.1 (g) (iii) is repealed and the following is substituted:

(iii) the transaction would be a material change to the mutual fund.

4 Paragraph 5.6 (1) (g) is repealed and the following is substituted:

(g) the mutual fund has complied with Part 11 of National Instrument 81-106 Investment Fund Continuous Disclosure in connection with the making of the decision to proceed with the transaction by the board of directors of the manager of the mutual fund or of the mutual fund; .

5 Paragraph 5.7 (1) (d) is repealed and the following is substituted:

(d) if the application relates to a matter that would constitute a material change for the mutual fund, a draft of an amendment to the simplified prospectus of the mutual fund reflecting the change; and”.

6 Section 5.10 is repealed.

7 Subsection 10.1(4) is repealed and the following is substituted:

(4) The statement referred to in subsection (3) is not required to be separately provided, in any year, if the requirements are described in any document that is sent to all securityholders in that year.

8 Part 13 is repealed.

9 Subsection 15.9 (2) is amended by striking out “significant change” and substituting “material change” in each instance.

10 Part 16 is repealed.

11 Part 17 is repealed.

12 This Instrument comes into force on June 1, 2005.

Companion Policy 81-102CP
Mutual Funds
Amendment Instrument

1 Companion Policy 81-102CP Mutual Funds is amended by this Instrument.

2 Subsection 3.2(3) is amended by deleting the last sentence of the subsection and substituting the sentence“In addition, this decision would also constitute a material change for the mutual fund, thereby requiring an amendment to the simplified prospectus of the mutual fund and the issuing of a press release under Part 11 of National Instrument 81-106 Investment Fund Continuous Disclosure.”.

3 Subsection 7.3(2) is amended by deleting the last sentence of the subsection and substituting the sentence“The Canadian securities regulatory authorities believe that this type of transaction generally would constitute a material change for the smaller continuing mutual fund, thereby triggering the requirements of paragraph 5.1(g) of the Instrument and Part 11 of National Instrument 81-106 Investment Fund Continuous Disclosure.”.

4 Section 7.4 is deleted.

5 Part 12 is deleted.

6 Part 14 is deleted.

7 This Instrument comes into force on June 1, 2005.

Appendix D

National Instrument 13-101
System For Electronic Document Analysis And Retrieval(SEDAR)
Amendment Instrument

1 National Instrument 13‑101 System for Electronic Document Analysis and Retrieval (SEDAR) is amended by this Instrument.

2 Appendix A is amended

(a) by repealing item 6 of Part I B and substituting the following:
6 News Release ,

(b) by repealing item 8 of Part I B and substituting the following:
8.1 Annual Management Report of Fund Performance
8.2 Interim Management Report of Fund Performance ,

(c) by repealing item 13 of Part I B and substituting the following:
13 Labour Sponsored Investment Fund Valuation Reports ,

(d) by adding the following after Item 13 of Part I B:
14    Report of Management Company - Transactions        BC, Alta, Sask, Ont,
with related persons or companies                                          NS and Nfld
Form 81-903F - British Columbia,
Form 38 - Alberta and Ontario,
Form 36 - Saskatchewan,
Form 39 - Nova Scotia, and
Form 37 - Newfoundland
15    Annual Information Form
16    Change in Legal Structure Filings
17    Material Contracts ,

(e) by repealing item 1 of Part II B (a) and substituting the following:
1 News Release ,

(f) by striking out “BC, Alta, Sask, Ont, NS & Nfld” from item 2 of Part II B (a) ,

(g) by striking out “BC, Ont & Que” from item 6 of Part II B (a) ,

(h) by repealing item 8 of Part II B (a) and substituting the following:
8.1 Annual Management Report of Fund Performance
8.2 Interim Management Report of Fund Performance , and

(i) by adding the following after Item 18 of Part II B (a):
19 Change in Corporate/Legal Structure Filings
  20 Material Documents/Contracts .

3 This Instrument comes into force on June 1, 2005.

Appendix E

Multilateral Instrument 81-104Commodity Pools
Amendment Instrument

1 Multilateral Instrument 81‑104 Commodity Pools is amended by this Instrument.

2 Part 7 is repealed.

3 Sections 8.1, 8.2, 8.3 and 8.4 are repealed.

4 Section 9.2 is amended

(a) by repealing paragraph 9.2 (g) and substituting the following:

(g) provide the disclosure concerning the past performance of the commodity pool that is required to be provided by an investment fund under Item 4 of Part B of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance, except that
(i) the past performance of the commodity pool, in the bar chart prepared in accordance with Item 4.2 of Part B of Form 81-106F1, must show quarterly, non-annualized returns of the commodity pool over the period provided for in Item 4.2, rather than annual returns, and
(ii) the commodity pool may, at its option, in the disclosure required by Item 4.3 of Part B of Form 81-106F1, compare its performance to an index if it describes any differences between the commodity pool and the index that affect the comparability of the performance data of the commodity pool and the index; , and

(b) in paragraph 9.2 (n) by striking out “as required by section 7.3”.

5 Sections 9.3 and 9.4 are repealed.

6 This Instrument comes into force on June 1, 2005.

Companion Policy 81-104CP
Commodity Pools
Amendment Instrument

1 Companion Policy 81-104CP Commodity Pools is amended by this Instrument.

2 Subsection 3.1(3) is amended by striking out“Item 11.3 of Part B of Form 81-101F1” in the third sentence and substituting “Item 4.3 of Part B of Form 81-106F1”.

3 This Instrument comes into force on June 1, 2005.

Appendix F

National Instrument 51-102 Continuous Disclosure Obligations
Amendment Instrument

1 National Instrument 51‑102 Continuous Disclosure Obligations is amended by this Instrument.

2 Section 1.1 is amended

(a) by repealing the definition of“investment fund”and substituting the following:

“investment fund” means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an EVCC and a VCC as those terms are defined in National Instrument 81-106 Investment Fund Continuous Disclosure; , and

(b) by repealing the definition of“non-redeemable investment fund”and substituting the following:

“non-redeemable investment fund” means an issuer,

(a) whose primary purpose is to invest money provided by its securityholders,
(b) that does not invest,

(i) for the purpose of exercising or seeking to exercise control of an issuer, other than an issuer that is a mutual fund or a non-redeemable investment fund, or
(ii) for the purpose of being actively involved in the management of any issuer in which it invests, other than an issuer that is a mutual fund or a non-redeemable investment fund, and

(c) that is not a mutual fund; .

3 This Instrument comes into force on June 1, 2005.

Appendix G

National Instrument 52-107
Acceptable Accounting Principles, Auditing Standards and Reporting Currency
Amendment Instrument

1 National Instrument 52‑107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency is amended by this Instrument.

2 Section 1.1 is amended

(a) by repealing the definition of“investment fund”and substituting the following:

“investment fund” has the meaning ascribed to it in National Instrument 51-102; ,and

(b) by repealing the definition of“non-redeemable investment fund”.

3 This Instrument comes into force on June 1, 2005.

Appendix H

1 Section 1 (1) of the Securities Rules, B.C. Reg. 194/97, is amended

(a) by repealing the definition of“investment issuer”,

(b) by repealing the definitions of“investment fund”and“non-redeemable investment fund”and substituting the following:

“investment fund” means an investment fund as defined in NI 81-106;
“non-redeemable investment fund” means a non-redeemable investment fund as defined in NI 81-106; , and

(c) by adding the following definition:

“NI 81-106” means National Instrument 81-106 Investment Fund Continuous Disclosure”, .

2 Section 3 (1) is repealed and the following substituted:

(1) Subsection (5) does not apply if the financial statements are prepared in accordance with NI 52-107, .

3 Section 3 (4) is repealed and the following substituted:

(4) Subject to sections 99, 111 (1), 113.1, 113.2 and 144 (3), a person that is required to file financial statements under Part 9 of the Act or the regulations relating to that Part must include an auditor’s report.

4 Section 3 (9), (12), (13) and (14) is repealed.

5 Section 50 (1) (g) (i) is amended by striking out “section 145”and substituting “section 145 (1)”.

6 Section 64 (1) (a) is amended by striking out “section 145”and substituting “section 145 (1)”.

7 Section 69 is amended by striking out “under section 145,”and substituting “under section 145 (1),”.

8 Section 98.2 is repealed and the following substituted:

Alternative certificate of investment fund

98.2 (1) If an investment fund is established as a trust, the certificate required to be signed by the investment fund must be signed by

(a) each individual who is a trustee or by a duly authorized attorney of the individual, or
(b) the duly authorized signing officer or officers of the trustee, if the trustee of the investment fund is a corporation.

(2) Despite subsection (1), a certificate required to be signed by the trustee of an investment fund may be signed by any other person if that person is duly authorized to sign the certificate by the declaration of trust or trust agreement establishing the investment fund.

(3) Despite subsections (1) and (2), if the trustee of the investment fund is also its manager, the certificate must state that the certificate is being signed by the person in the capacity of both trustee and manager of the investment fund and must be signed in accordance with section 98.3.

(4) An investment fund to which NI 81-101 does not apply is exempt from paragraphs 68 (2) (a) and (b) and subsection 68 (3) of the Act if the certificate required by subsection 68 (1) of the Act is signed in accordance with this section.

9 Section 98.3 (1) is repealed and the following substituted:

(1) An investment fund to which NI 81-101 does not apply must contain a certificate from the manager of the investment fund.

10 Section 111 (1) is amended by adding “of an issuer other than an investment fund”after “A financial statement included in a prospectus”.

11 Section 112 (1) is amended by striking out “a mutual fund”and substituting “an investment fund”.

12 Section 112 (2) is repealed.

13 Section 113 is repealed and the following substituted:

Financial statements in a prospectus - investment fund

113 (1) Subject to subsections (2) and (3), an investment fund that files a prospectus under the Act must include in the prospectus the annual financial statements and audit report in the form specified by Part 2 and Part 3 of NI 81-106 for the investment fund’s 3 most recently completed financial years, or if the investment fund has not completed 3 financial years, for all of its financial years.

(2) An investment fund that is a mutual fund may omit its financial statements for the earliest financial year otherwise required under subsection (1).

(3) If an investment fund’s most recent financial year ended within 90 days of the date of the prospectus referred to in subsection (1), the investment fund may treat the previous year as the most recent financial year under subsection (1).

(4) If the investment fund has not completed its first financial year, the fund must include in the prospectus financial statements for the period from the date of the fund’s formation to a date not more than 90 days before the date of the prospectus.

Interim financial statements in a prospectus - investment fund

113.1 (1) An investment fund that files a prospectus must include in the prospectus its financial statements in the form specified by Part 2 and Part 3 of NI 81-106 for the interim period that began immediately after the financial year to which the annual financial statements required to be included in the prospectus under section 113 relate, if the prospectus is filed 60 days or more after the end of that interim period.

(2) The interim financial statements required by this section may be unaudited.

Financial statements exemption - mutual fund

113.2 Despite sections 113 and 113.1, a mutual fund that is subject to NI 81-101 must incorporate by reference in the prospectus the financial statements required to be incorporated in a prospectus under NI 81-101.

14 Section 114 (1) (b) is repealed and the following substituted:

(b) an income statement, a statement of retained earnings and a statement of changes in financial position of the acquired business

(i) for each of its last 5 financial years, and
(ii) for any part of its subsequent financial year to the date at which the balance sheet required by paragraph (a) (ii) is made up and for the comparative period in the immediately preceding financial year, .

15 Section 144 is repealed and the following substituted:

Interim financial statements

144 (1) A reporting issuer that is not an investment fund must prepare and file the interim financial statements required by NI 51-102.

(2) A reporting issuer that is an investment fund must prepare and file the interim financial statements required by NI 81-106.

(3) The interim financial statements filed under subsection (1) or (2) need not include an auditor’s report.

16 Section 145 is repealed and the following substituted:

Annual financial statements

145 (1) A reporting issuer that is not an investment fund must prepare and file the annual financial statements required by NI 51-102.

(2) A reporting issuer that is an investment fund must prepare and file the annual financial statements required by NI 81-106.

17 Sections 146 to 149 and 151 are repealed.

18 Section 153 (1) (a), (2) (a) and (3) is repealed.

19 Section 181 (2) is amended by striking out “mutual fund”and substituting “investment fund”.

20 Sections 183 and 184 are repealed.

News Releases

Popular Topics

Resources

Popular Topics

Investigation

Most Recent Decisions & Orders

Popular Topics

Upcoming Hearings

Popular Topics

BCN 2005/27 - Adoption of National Instrument 81-106 Investment Fund Continuous Disclosure and Related Instruments [BCN - Lapsed]

Concurrently Published: