Exemption Orders (Discretionary)

MACKENZIE FINANCIAL CORPORATION


2001 BCSECCOM 87


Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Trades in units of pooled funds exempt from the requirement to file a report of the trade within a specified period of time, provided that the reports are filed and fees paid within 30 days of the year end of the respective fund.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, s. 76

Securities Rules, R.B.C. Reg. 194/97, s. 139

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA, ONTARIO, NEW BRUNSWICK, NOVA SCOTIA, PRINCE EDWARD ISLAND, NEWFOUNDLAND, YUKON, NORTHWEST TERRITORIES AND NUNAVUT

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF MACKENZIE FINANCIAL CORPORATION

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Yukon, Northwest Territories and Nunavut (the “Jurisdictions”) has received an application from Mackenzie Financial Corporation (the “Applicant”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that:

(a) certain trades in units (“Units”) of open-end unit trusts (the “Funds”) to be established by the Applicant are not subject to the registration and prospectus requirements of the Legislation of Manitoba, Ontario, New Brunswick, Newfoundland, Prince Edward Island and Yukon Territory (the “Prospectus Jurisdictions”); and

(b) trades in Units are not subject to the requirements of the Legislation of the Jurisdictions other than Manitoba relating to the filing of forms and the payment of fees within 10 days of each trade;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS the Applicant has represented to the Decision Makers that:

1. the Applicant is registered under the Legislation of Ontario as an adviser in the categories of investment counsel and portfolio manager;
    2. the Applicant intends to establish one or more Funds pursuant to declarations of trust for which the Applicant will act as the trustee, manager and promoter. Each Fund will be a “mutual fund” as defined in the Legislation;

    3. none of the Funds currently intends to become a reporting issuer, as such term is defined in the Legislation, and the Units of the Funds will not be listed on any stock exchange;

    4. each Fund will be divided into Units which will evidence the undivided interest of each unitholder (collectively the “Unitholders”) in the assets of the Fund;

    5. Units will be distributed on a continuous basis to persons in the Jurisdictions in reliance on the exemption (the “Private Placement Exemption”) set out in the Legislation for distributions where the purchaser purchases as principal if the aggregate acquisition cost is not less than a prescribed amount (the “Prescribed Amount”);

    6. the minimum initial investment in a Fund by a resident of any Jurisdiction will be not less than the Prescribed Amount in that Jurisdiction;

    7. following such initial investment, it is proposed that Unitholders be able to purchase additional Units (“Subscribed Units”) of a Fund in increments of less than the Prescribed Amount, provided that at the time of such subsequent acquisition the investor holds Units of the Fund with an aggregate acquisition cost or aggregate net asset value of at least the Prescribed Amount; and

    8. each Fund proposes to distribute additional Units (“Reinvested Units”) by way of automatic reinvestment of distributions to unitholders of such Fund;

    AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);

    AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

    THE DECISIONof the Decision Makers pursuant to the Legislation is that:

    (a) the registration and prospectus requirements contained in the Legislation of the Prospectus Jurisdictions shall not apply to

    (i) the issuance of Subscribed Units of a Fund to a Unitholder of that Fund provided that

    (1) the initial investment in Units of that Fund was pursuant to the Private Placement Exemption,

    (2) at the time of the issuance of such Subscribed Units, the Unitholder then owns Units of that Fund having an aggregate acquisition cost or an aggregate net asset value of not less than the Prescribed Amount of the applicable Prospectus Jurisdiction,

    (3) at the time of the issuance of such Subscribed Units, the Applicant is registered under the Legislation of Ontario as an adviser in the categories of investment counsel and portfolio manager and such registration is in good standing, and

    (4) this clause (i) will cease to be in effect with respect to a Prospectus Jurisdiction 90 days after the coming into force of any legislation, regulation or rule in such Jurisdiction relating to the distribution of Subscribed Units of pooled funds; and


    (ii) an issuance of Reinvested Units of a Fund to a Unitholder of that Fund provided that

    (1) no sales commission or other charge in respect of such issuance of Reinvested Units is payable, and

    (2) each Unitholder who receives Reinvested Units has received, not more than 12 months before such issuance, a statement describing (A) the details of any deferred or contingent sales charge or redemption fee that is payable at the time of the redemption of a Unit, (B) any right that the Unitholder has to make an election to receive cash instead of Units on the payment of the net income or net realized capital gains distributed by the Fund, (C) instructions on how the right referred to in subsubclause (B) can be exercised, and (D) the fact that no prospectus is available for the Fund as Units are offered pursuant to prospectus exemptions only; and

    (b) the requirements contained in the Legislation of the Jurisdictions other than Manitoba to file a report of a distribution of Units under the Private Placement Exemption or of Subscribed Units within 10 days of such trade shall not apply to such trade, provided that within 30 days after each financial year end of each Fund, such Fund:

    (ii) files with the applicable Decision Maker a report in respect of all trades in Units of that Fund during such financial year, in the form prescribed by the applicable Legislation, and

    (iii) remits to the applicable Decision Maker the fee prescribed by the applicable Legislation.

    DATED at Toronto, Ontario this 12th day of December, 2000


    J.A. Geller R.W. Davis
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