The Ontario Securities Commission has granted regulatory exemptions to two fund companies and a couple of labour sponsored investment funds.

AGF Funds Inc. has received exemptions from the reporting requirements and self-dealing prohibitions for actively managed fund-of-fund structures.

The OSC says that without this relief, the top funds would be prohibited from holding an investment in underlying funds in which the top funds is a substantial securityholder; and that AGF would be required to file a report of every transaction by the top funds of the securities of the underlying funds.

TD Asset Management Inc. has received an exemption from the requirement to deliver comparative annual financial statements to registered holders of certain mutual funds.

The OSC says TDAM will send a notice to unitholders who hold securities in client name, advising them that they will not receive the annual financial statements of the funds for the year then ended unless they request them.

Unitholders will be able to access annual financial statements of the funds either on the SEDAR Web site or on TDAM’s web site.

Two more LSIFs have been granted exemptions from the mutual fund sales practices rule, allowing them to pay certain specified distribution costs out of fund assets.

The RoyNat Canadian Diversified Fund Inc. and Financial Industry Opportunities Fund Inc. both received relief from the prohibition against making certain payments by funds to participating dealers. Similar relief has been granted to other LSIFs, and these funds argue that requiring them to pay the distribution/co-op expenses while granting an exemption to other labour funds permitting them to pay similar expenses directly, would put their funds at “a permanent and serious competitive disadvantage with its competitors resulting from increased management fees”.

The exemptions were granted, providing: distribution costs are otherwise paid in accordance with the sales rule; the funds will expense all distribution costs in the fiscal period when incurred; and, this practice will be disclosed in the prospectus.