(April 25 – 15:50 ET) – The Ontario Securities Commission has granted certain exemptions for pooled funds that may be established by Hymas Investment Management Inc., pending the creation of a regulatory regime for pooled funds.
The OSC has promised to devise regulations for pooled funds in the wake of its new rule governing exempt distributions. Pooled funds are typically sold under the basic $150,000 minimum investment exemption. Under the new rule, pooled fund investors will have to comply with the new exemption qualifications for buying new units, even if they already hold pooled funds acquired under the old exemption.
According to the OSC’s order, Hymas intends to establish two pooled funds to service its private and institutional clients. It may create additional funds at a later date. Units of the funds will not carry sales charges or deferred sales charges, subject to a 1% redemption fee on units held for less than one year.
Hymas proposes that, for the purposes of calculating an investor’s initial investment in a fund, an investor may aggregate purchases made by the investor, his or her registered retirement savings plan or registered retirement income fund, and his or her wholly owned companies, or any combination of them.
It also proposes that, following an initial investment, a unitholder be permitted to subscribe for additional units by: automatically reinvesting distributions, or subscribing and paying for units in increments of less than $150,000, as long as the aggregate acquisition cost or aggregate net asset value of the investor’s holding is at least $150,000.
The OSC grated the requested relief on the condition that:
- the initial investment of unitholders is not less than $150,000;
- that investors adding units have units of aggregate acquisition cost or net asset value of not less than $150,000;
- the firm is registered as an adviser and as a limited market dealer.
The ruling will terminate 90 days after the publication of a final rule regarding trades in securities of pooled funds.