Appendix C Amendments to National Instrument 45-106 Prospectus and Registration Exemptions 1. National Instrument 45-106 Prospectus and Registration Exemptions is amended by this Instrument. 2. The following is added after section 2.42: “Capital accumulation plan 2.42.1 (1) In this section, “capital accumulation plan” means a tax assisted investment or savings plan, including a defined contribution registered pension plan, a group RRSP, a group registered education savings plan, or a deferred profit sharing plan, established by a plan sponsor that permits a member to make investment decisions among two or more investment options offered within the plan and in Québec and Manitoba, includes a simplified pension plan. “member” means, for the purposes of the definition of capital accumulation plan, a current or former employee of an employer, or a person who belongs, or did belong to a trade union or association, or (a) his or her spouse, (b) a trustee, custodian or administrator who is acting on his or her behalf, or for his or her benefit, or on behalf of, or for the benefit of, his or her spouse, or (c) his or her holding entity, or a holding entity of his or her spouse, that has assets in a capital accumulation plan, and includes a person that is eligible to participate in a capital accumulation plan. “plan sponsor” means, for the purposes of the definition of capital accumulation plan, an employer, trustee, trade union or association or a combination of them that establishes a capital accumulation plan, and includes a service provider to the extent that the plan sponsor has delegated its responsibilities to the service provider. “service provider” means, a person that provides services to a plan sponsor to design, establish, or operate a capital accumulation plan.” (2) The dealer registration requirement does not apply to a trade by a person in a security of a mutual fund to a capital accumulation plan, or to a member of a capital accumulation plan as part of the member’s participation in the capital accumulation plan, if the following conditions are met: (a) the plan sponsor selects the mutual funds that members will be able to invest in under the capital accumulation plan,
2 (b) the plan sponsor establishes a policy, and provides members with a copy of the policy and any amendments to it, describing what happens if a member does not make an investment decision, (c) in addition to any other information that the plan sponsor believes is reasonably necessary for a member to make an investment decision within the capital accumulation plan, and unless that information has previously been provided, the plan sponsor provides the member with the following information about each mutual fund the member may invest in, (i) the name of the mutual fund, (ii) the name of the manager of the mutual fund and its portfolio adviser, (iii) the fundamental investment objective of the mutual fund, (iv) the investment strategies of the mutual fund or the types of investments the mutual fund may hold, (v) a description of the risks associated with investing in the mutual fund, (vi) where a member can obtain more information about each mutual fund’s portfolio holdings, (vii) where a member can obtain more information generally about each mutual fund, including any continuous disclosure, and (viii) whether the mutual fund is considered foreign property for income tax purposes, and if so, a summary of the implications of that status for a member who invested in that mutual fund, (d) the plan sponsor provides members with a description and amount of any fees, expenses and penalties relating to the capital accumulation plan that are borne by the members, including: (i) any costs that must be paid when the mutual fund is bought or sold, (ii) costs associated with accessing or using any of the investment information, decision-making tools or investment advice provided by the plan sponsor, (iii) mutual fund management fees, (iv) mutual fund operating expenses, (v) record keeping fees, (vi) any costs for transferring among investment options, including penalties, book and market value adjustments and tax consequences, (vii) account fees, and (viii) fees for services provided by service providers provided that the plan sponsor may disclose the fees, penalties and expenses on an aggregate basis, if the plan sponsor discloses the nature of the fees, expenses and penalties, and the aggregated fees do not include fees that arise because of a choice that is specific to a particular member. (e) the plan sponsor has within the past year, provided the members with performance information about each mutual fund the members may invest in, including, (i) the name of the mutual fund for which the performance is being reported, (ii) the performance of the mutual fund, including historical performance for one, 3, 5 and 10 years if available,
3 (iii) a performance calculation that is net of investment management fees and mutual fund expenses, (iv) the method used to calculate the mutual fund’s performance return calculation, and information about where a member could obtain a more detailed explanation of that method, (v) the name and description of a broad-based securities market index, selected in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure, for the mutual fund, and corresponding performance information for that index, and (vi) a statement that past performance of the mutual fund is not necessarily an indication of future performance. (f) the plan sponsor has, within the past year, informed members if there were any changes in the choice of mutual funds that members could invest in and where there was a change, provided information about what members needed to do to change their investment decision, or make a new investment, (g) the plan sponsor provides members with investment decision-making tools that the plan sponsor reasonably believes are sufficient to assist them in making an investment decision within the capital accumulation plan, (h) the plan sponsor provides the information required by paragraphs (b), (c), (d) and (g) prior to the member making an investment decision under the capital accumulation plan, and (i) if the plan sponsor makes investment advice from a registrant available to members, the plan sponsor must provide members with information about how they can contact the registrant. (3) In Nova Scotia, the securities regulatory authority specifies pursuant to subclause 2(1) (ab)(iii) of the Securities Act (Nova Scotia) that documents containing the information described in paragraphs (2)(c) and (e) do not constitute an offering memorandum within the meaning of the Securities Act (Nova Scotia). (4) The prospectus requirement does not apply to a distribution of a security of a mutual fund in the circumstances set out in subsection (2), if (a) the conditions in subsection (2) have been complied with, and (b) the mutual fund complies with Part 2 of National Instrument 81-102 Mutual Funds.”. 3. Part 6 is amended by adding the following: “Notice required to rely on capital accumulation plan exemption 6.5.1 Before the first time a mutual fund relies on the exemption in section 2.42.1, the mutual fund must file a notice in the form found in Appendix C in each jurisdiction in which the mutual fund expects to distribute its securities.” 4. The following is added after Appendix B
4 “Appendix C Notice of Intention to Rely on Exemption in s. 2.42.1 Issuer information 1. State the full name, address and telephone number of the mutual fund that distributed or intends to distribute the security. 2. State whether the mutual fund is or is not a reporting issuer and, if reporting, each of the jurisdictions in which it is reporting. 3. List each jurisdiction where the mutual fund is, or intends to distribute mutual fund securities in reliance on the exemption for capital accumulation plans and deliver the notice to the relevant securities regulatory authority listed in the attached Schedule. Certificate On behalf of the mutual fund, I certify that the statements made in this report are true. Date: ________________________________________ _____________________________________________ Name of mutual fund (please print) _____________________________________________ Print name and position of person signing _____________________________________________ e-mail address of person signing _____________________________________________ Signature Schedule to Appendix C Instruction: Prior to relying on the exemption, you must file this notice with the securities regulatory authority in each jurisdiction in which the mutual fund is currently providing services to a capital accumulation plan, or where they intend to provide services to a capital accumulation plan. If you subsequently intend to provide services to a capital accumulation plan located in a new province, you must file a notice in that province. Notice - Collection and use of personal information The securities regulatory authorities collect the personal information required under this notice for the purposes of the administration and enforcement of the securities legislation. Freedom of information legislation in certain jurisdictions may require the securities regulatory authority to make this information available if requested. As a result, the public may be able to obtain access to the information. If you have any questions about the collection and use of this information, contact the securities regulatory authorities in the jurisdictions where the mutual fund files this form, at the address(es) set out below.
5 British Columbia Securities Commission P.O. Box 10142, Pacific Centre 701 West Georgia Street Vancouver, BC V7Y 1L2 Telephone: (604) 899-6854 Toll free in British Columbia and Alberta 1-800-373-6393 Facsimile: (604) 899-6506 Attention: Exempt Distributions Alberta Securities Commission 4th Floor, 300 – 5th Avenue SW Calgary, AB T2P 3C4 Telephone: (403) 297-6454 Facsimile: (403) 297-6156 Saskatchewan Financial Services Commission 6th Floor 1919 Saskatchewan Drive Regina, SK S4P 3V7 Telephone: (306) 787-5879 Facsimile: (306) 787-5899 The Manitoba Securities Commission 500-400 St. Mary Avenue Winnipeg, MB R3C 4K5 Telephone: (204) 945-2548 Facsimile: (204) 945-0330 Ontario Securities Commission 20 Queen Street West Suite 1900, Box 55 Toronto, ON M5H 3S8 Telephone: (416) 593-3682 Facsimile: (416) 593-8252 Public official contact regarding indirect collection of information: Administrative Assistant to the Director of Corporate Finance Telephone: (416) 593-8086 Autorité des marchés financiers 800, Square Victoria, 22 e étage C.P. 246, Tour de la Bourse Montréal (Québec) H4Z 1G3 Telephone: (514) 395-0337 or 1-877-525-0337 Facsimile: (514) 864-3681 New Brunswick Securities Commission 133 Prince William Street, Suite 606 Saint John, NB E2L 2B5 Telephone: (506) 658-3060 Facsimile: (506) 658-3059
6 Nova Scotia Securities Commission 2nd Floor, Joseph Howe Building 1690 Hollis Street Halifax, NS B3J 3J9 Telephone: (902) 424-7768 Facsimile: (902) 424-4625 Prince Edward Island Securities Office 95 Rochford Street, P.O. Box 2000 Charlottetown, PE C1A 7N8 Telephone: (902) 368-4569 Facsimile: (902) 368-5283 Securities Commission of Newfoundland and Labrador P.O. Box 8700 2nd Floor, West Block Confederation Building St. John's, Newfoundland and Labrador A1B 4J6 Telephone: (709) 729-4189 Facsimile: (709) 729-6187 Government of Yukon Department of Community Services Law Centre, 3 rd Floor 2130 Second Avenue Whitehorse, YT Y1A 5H6 Telephone: (867) 667-5314 Facsimile: (867) Government of the Northwest Territories Department of Justice Securities Registry 1st Floor Stuart M. Hodgson Building 5009 – 49th Street Yellowknife, NT X1A 2L9 Telephone: (867) 920-3318 Facsimile: (867) 873-0243 Government of Nunavut Department of Justice Legal Registries Division P.O. Box 1000 – Station 570 1st Floor, Brown Building Iqaluit, NU X0A 0H0 Telephone: (867) 975-6190 Facsimile: (867) 975-6194 5. These amendments come into force on ●.”
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