Securities Law

BCN 2000/66 - BC Instrument 45-505 Alternative Reporting Requirements for Exempt Distributions of Securities of Eligible Pooled Funds [BCN - Rescinded]

Published Date: 2000-12-22
Effective Date: 2000-12-20

The Commission has adopted BC Instrument 45-505 effective January 1, 2001. This instrument provides an alternative to the current requirement for Forms 20, and related fees, to be filed for exempt distributions by certain non-reporting mutual funds, commonly referred to as pooled funds and defined, in the instrument, as “eligible pooled funds”.

Some registered portfolio managers have created “in-house” pooled funds as a mechanism for managing the investment of client funds. These pooled funds meet the definition of “mutual fund” under the Securities Act.

Distributions of the pooled fund units are usually made in reliance on the prospectus exemptions contained in section 74(2)(4) or 74(2)(19) of the Securities Act and, therefore, are subject to Form 20 filing requirements under section 139 of the Securities Rules.  The funds used to purchase the units may consist of newly invested client funds or client funds being transferred from one pooled fund to another.
Some portfolio managers have made the required Form 20 filings while others have not. Following discussions with the industry, the Commission has decided to provide some relief from the filing requirements, and associated fees, to reduce the administrative and financial burden on portfolio managers who use the pooled fund mechanism to manage client funds.  Under the new alternative reporting requirement, filings and fees would not be required for funds moved from one pooled fund to another by the same portfolio manager.  The Commission is also providing some credit to portfolio managers that have complied with filing requirements in the past.

BCI#45-505 exempts an eligible pooled fund from filing a Form 20, and in effect from paying the associated fees, provided that:

  • the fund makes a one-time filing of a notice of intention to rely on the instrument (BC Form 45-505F1) on or before the Form 20 filing date that would otherwise apply;
  • the fund discloses all distributions during the previous 6 years for which required Forms 20 were not filed and pays the outstanding filing fees, being 0.01% of either (i) the “additional assets under management” raised from British Columbia resident purchasers during those 6 years, or (ii) the total proceeds from those distributions multiplied by the current percentage of the fund’s assets held to the benefit of British Columbia residents; and
  • the fund, within 30 days of the end of each calendar year in which it distributes securities, files BC Form 45-505F2 and pays filing fees equal to 0.01 % of either (i) the value of the “additional assets under management” invested in the fund during that calendar year by B.C. resident purchasers, or (ii) the value of the securities distributed during the calendar year to B.C. resident purchasers, provided that a credit can be applied against the fees otherwise payable that represents a portion of the Form 20 fees paid by the fund in the previous 6 years.

DATED at Vancouver, British Columbia, on December 20, 2000.



 Douglas M. Hyndman

Ref. BCI#45-505
Form 20
Securities Act, sections 74(2)(4) and 74(2)(19)
Securities Rules, section 139

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at in the Commission Documents database or the Historical Documents database.