The Ontario Securities Commission has granted relief to Putnam Investments Inc., giving it more time to comply with the new fund governance rules, as it is in the process of being acquired.

In today’s OSC Bulletin it was reported that the commission granted novel relief granted to fund manager Putnam from the requirements to appoint an independent review committee by May 1, and to comply with fund governance rules by November 1. It granted an extension until Jan. 1, 2008.

Putnam is in the midst of being acquired by GWL, a subsidiary company of Power Financial Corp. The decision notes that, “While Putnam has engaged in on-going internal deliberations regarding [fund governance rules] and its implementation issues and deadlines, Putnam has nevertheless expended considerable time and resources over the last nine months engaged in events and circumstances leading up to the signing of the proposed transaction on Jan. 31, 2007.”

It also notes that the firms may encounter, “integration issues typically present in these types of corporate transactions”; and, that as a result of its acquisition Putnam will also become an affiliate of other mutual fund managers, Mackenzie Financial Corp., I.G. Investment Management Ltd. and Counsel Group of Funds. “These other soon-to-be affiliated fund managers are also making their own, and sometimes co-ordinated deliberations regarding the implementation issues posed by [the fund governance rule]. Such deliberations may include, among other things, the feasibility of sharing a common IRC,” it says.

“Against this backdrop of uncertainty and complexity, and considering the close proximity of the expected closing date of the proposed transaction (May 31, 2007) and implementation deadlines [for the new governance rules], Putnam believes it would be in the best interest of the funds’ investors to delay the implementation… until such time as Putnam becomes integrated into the Power Financial group of companies and explores possible co-operative IRC “synergies” with Mackenzie, I.G. and Counsel,” it says.

The regulators granted the relief provided that: Putnam and the funds are fully compliant by January 1, 2008; and, that Putnam deliver appropriate notice to all unitholders in the funds within 10 business days of this decision describing the nature and scope of the IRC Relief and, in particular, that an IRC for the funds will not become operational until January 1, 2008.