The Ontario Securities Commission has published a staff notice advising fund managers about the sorts of transactions that seek to change a fund’s manager without getting unitholder approval.

In Friday’s OSC Bulletin, the commission published a new notice regarding fund manager changes. Typically, a change in control of the manager of a mutual fund requires the prior approval by the securities regulators; whereas, a change in the manager of a mutual fund requires both regulatory approval and unitholder approval (unless the new manager is an affiliate of the current one).

The notice indicates that OSC staff “have seen an increasing number of applications” for approval of a change in control that, due to the impact on holders of the fund, make it appropriate to also require unitholder approval.

“When examining the substance of a proposed transaction or relevant series of transactions, OSC staff will raise questions where it appears the transaction or series of transactions has been structured to effect a change of manager of the mutual fund without securityholder approval,” it says.

“In our review of applications for regulatory approval for a change in control of the manager of the mutual fund, OSC staff will consider the intended final outcome for the securityholders of the mutual fund,” it notes.

IE