June 30, 2022  
In the Matter of  
the Securities Legislation of  
Ontario  
(the Jurisdiction)  
and  
In the Matter of  
the Process for Exemptive Relief Applications in Multiple Jurisdictions  
and  
In the Matter of  
SLGI Asset Management Inc. (SLGI)  
and  
Sun Life Capital Management (Canada) Inc. (SLC)  
and  
the Top Funds  
(as defined below)  
DECISION  
Background  
The principal regulator in the Jurisdiction has received an application from SLGI and SLC and  
their affiliates (each a Filer, and collectively, the Filers) on behalf of the Top Funds, for a decision  
under the securities legislation of the Jurisdiction of the principal regulator (the Legislation):  
1. exempting the Top Funds from the restrictions in the Legislation (the Related Issuer  
Investment Restrictions) which prohibit:  
(a) an investment fund from knowingly making an investment in a person or company  
in which the investment fund, alone or together with one or more related investment  
funds, is a substantial securityholder;  
(b) an investment fund from knowingly making an investment in an issuer in which:  
i. any officer or director of the investment fund, its management company or  
distribution company or an associate of any of them; or  
ii. any person or company who is a substantial securityholder of the investment  
fund, its management company or its distribution company;  
has a significant interest; and  
(c) an investment fund, its management company or its distribution company from  
knowingly holding an investment described in paragraph (a) or (b) above  
(collectively, the Related Issuer Relief);  
2. exempting each Filer that is an adviser to a Public Fund from the restriction in paragraph  
13.5(2)(a) of National Instrument 31-103 Registration Requirements, Exemptions and  
Ongoing Registrant Obligations (NI 31-103) that prohibits a registered adviser from  
knowingly causing an investment portfolio managed by it, including an investment fund  
for which it acts as adviser, to invest in securities of any issuer in which a responsible  
person or an associate of a responsible person is a partner, officer or director, unless the  
fact is disclosed to the client and the written consent of the client to the investment is  
obtained before the purchase (the Consent Requirement Relief);  
3. exempting each Filer from the requirement to prepare a report with respect to the Public  
Funds, in accordance with the requirements of the Legislation, of every transaction of  
purchase or sale of securities with any related person or company (the Reporting Relief),  
in the case of each of paragraphs 1, 2 and 3, to permit each Top Fund to invest in securities of  
the Underlying Investments (as defined below); and  
4. exempting each Public Fund from the restrictions in paragraphs 2.5(2)(a) and (c) of  
National Instrument 81-102 Investment Funds (NI 81-102) that prohibit a mutual fund that  
is a reporting issuer from investing in securities of an underlying investment fund that is  
not subject to NI 81-102 and is not a reporting issuer, to permit the Public Fund to invest a  
portion of its assets in securities of Underlying Private Funds (as defined below) (the  
Public Fund-on-Private Fund Relief).  
The Related Issuer Relief, the Consent Requirement Relief, the Reporting Relief and the Public  
Fund-on-Private Fund Relief are collectively referred to, as the Exemption Sought.  
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport  
application):  
(a) the Ontario Securities Commission is the principal regulator for this application; and  
(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102  
Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta,  
Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island,  
Newfoundland and Labrador, Northwest Territories, Yukon and Nunavut (together with  
Ontario, the Jurisdictions).  
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Interpretation  
Terms defined in MI 11-102, NI 31-103, National Instrument 14-101 Definitions, NI 81-102 and  
National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107)  
have the same meaning if used in this decision, unless otherwise defined.  
CCM Fund means SLC Management Canadian Commercial Mortgage Fund;  
Existing Public Funds means each investment fund managed by a Filer as at the date of  
this decision that is a reporting issuer subject to NI 81-102;  
Existing Underlying Investment means each of the PFI Funds and the CCM Fund;  
Future Public Funds means each investment fund that will be managed by a Filer after  
the date of this decision, other than the Existing Public Funds, and that will be a reporting  
issuer subject to NI 81-102;  
Future Underlying Investment means each collective investment vehicle that will be  
managed by a Filer after the date of this decision, other than the Existing Underlying  
Investments, and that will not be a reporting issuer or an investment fund;  
Long PFI Fund means SLC Management Long Term Private Fixed Income Plus Fund;  
Mid PFI Fund means SLC Management Private Fixed Income Plus Fund;  
PFI Funds means the Short PFI Fund, the Mid PFI Fund and the Long PFI Fund;  
Private Funds means the investment funds managed by a Filer as at and after the date of  
this decision that are not, and will not be, reporting issuers;  
Public Funds means the Existing Public Funds and the Future Public Funds;  
Short PFI Fund means SLC Management Short Term Private Fixed Income Plus Fund;  
Top Funds means the Public Funds and the Private Funds;  
Underlying Investment means each Existing Underlying Investment and each Future  
Underlying Investment; and  
Underlying Private Funds means the Private Funds in which the Public Funds invest.  
Representations  
This decision is based on the following facts represented by the Filers:  
The Filers  
1.  
Each of SLC and SLGI is a corporation incorporated under the laws of Canada.  
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2.  
3.  
Each of SLC and SLGI has a head office located in Toronto, Ontario and is a wholly-owned  
indirect subsidiary of Sun Life Financial Inc. (SLF).  
SLGI is registered: (a) under the securities legislation of Ontario, Québec, and  
Newfoundland and Labrador as an investment fund manager, (b) under the securities  
legislation of Ontario as a mutual fund dealer, (c) under the securities legislation of Ontario  
as a portfolio manager, and (d) under the Commodity Futures Act (Ontario) as a commodity  
trading manager.  
4.  
5.  
SLC is registered (a) under the securities legislation of each Jurisdiction as an investment  
fund manager, (b) under the securities legislation of each Jurisdiction as an exempt market  
dealer, (c) under the securities legislation of each Jurisdiction as a portfolio manager, and  
(d) under the Commodity Futures Act (Ontario) as a commodity trading manager.  
SLGI is the investment fund manager and portfolio manager of the Existing Public Funds  
and may, in the future, be the investment fund manager and/or portfolio manager of Private  
Funds.  
6.  
7.  
SLC is the investment fund manager and portfolio manager of existing Private Funds.  
Each Filer is, or will be, a “responsible person” of a Top Fund, as that term is defined in  
NI 31-103.  
8.  
The Filers are not in default of securities legislation in any Jurisdiction.  
The Top Funds  
9.  
Securities of each Public Fund are, or will be, qualified for distribution in one or more of  
the Jurisdictions and distributed to investors pursuant to a prospectus prepared in  
accordance with National Instrument 81-101 Mutual Fund Prospectus Disclosure or  
National Instrument 41-101 General Prospectus Requirements, as applicable.  
10.  
11.  
Each Public Fund is, or will be, a reporting issuer under the securities legislation of one or  
more Jurisdictions.  
Securities of each Private Fund are, or will be, distributed solely to investors pursuant to  
exemptions from the prospectus requirements in accordance with National Instrument 45-  
106 Prospectus Exemptions (NI 45-106) and the Legislation.  
12.  
No Private Fund will be a reporting issuer under the securities legislation of any  
Jurisdiction.  
13.  
14.  
The Existing Top Funds are not in default of the securities legislation of any Jurisdiction.  
A Top Fund may wish to invest in securities of one or more of the Underlying Investments  
and/or Underlying Private Funds, provided the investment is consistent with the Top  
Fund’s investment objectives and strategies.  
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15.  
SLGI has established an independent review committee (an IRC) in order to review  
conflict of interest matters pertaining to its management of the Public Funds as required by  
NI 81-107.  
The Underlying Private Funds  
16.  
Each Underlying Private Fund is, or will be, an investment fund, as such term is defined  
under the Legislation.  
17.  
Securities of each Underlying Private Fund are, or will be, distributed solely to investors  
pursuant to exemptions from the prospectus requirements in accordance with NI 45-106  
and the Legislation.  
18.  
19.  
20.  
No Underlying Private Fund is, or will be a, reporting issuer under the securities legislation  
of any Jurisdiction.  
SLC is the manager of existing Underlying Private Funds. A Filer will be the manager of  
future Underlying Private Funds.  
Each Underlying Private Fund that is a mutual fund complies, or will comply, with the  
investment requirements applicable to prospectus-qualified mutual funds, as set out in Parts  
2 and 4 of NI 81-102, including the restrictions relating to illiquid assets (section 2.4 of NI  
81-102) and investments in other investment funds (section 2.5 of NI 81-102), for so long  
as it is held by a Public Fund.  
21.  
Each Underlying Private Fund that is a non-redeemable investment fund complies, or will  
comply, with the investment requirements applicable to prospectus-qualified non-  
redeemable investment funds, as set out in Parts 2 and 4 of NI 81-102, including the  
restrictions relating to illiquid assets (section 2.4 of NI 81-102) and investments in other  
investment funds (section 2.5 of NI 81-102), for so long as it is held by a Public Fund.  
22.  
23.  
An investment in an Underlying Private Fund by a Public Fund will not expose the  
investors of the Public Fund to any investment strategies or risks that they are not currently  
exposed to by virtue of holding securities of the Public Funds.  
Each Underlying Private Fund will comply with Part 14 of National Instrument 81-106  
Investment Fund Continuous Disclosure (NI 81-106), including the obligation to calculate  
net asset value (NAV) every business day if it uses specified derivatives or sells securities  
short, or weekly if it does not use specified derivatives or sell securities short, for so long  
as it is held by a Public Fund.  
24.  
In the case of Underlying Private Funds that are mutual funds, securities will be redeemable  
at least quarterly at a redemption price equal to the relevant NAV per security on the  
redemption date. In the case of Underlying Private Funds that are non-redeemable  
investment funds, securities will be redeemable on a periodic basis at a redemption price  
equal to the relevant NAV per security, but may be subject to lock-up periods, early  
redemption penalties, and/or other limitations on redemptions, depending on the amount  
redeemed.  
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The Underlying Investments  
25.  
The Existing Underlying Investments are collective investment vehicles established as  
limited partnerships under the laws of Ontario. Future Underlying Investments may be  
structured as limited partnerships, trusts or corporations governed by the laws of Canada  
or of a Jurisdiction or of a foreign jurisdiction.  
26.  
Securities of each Underlying Investment are, or will be, distributed solely to investors  
pursuant to exemptions from the prospectus requirements in accordance with NI 45-106  
and the Legislation.  
27.  
28.  
29.  
30.  
No Underlying Investment will be a reporting issuer under the securities legislation of any  
Jurisdiction.  
SLC is the manager of the Existing Underlying Investments. A Filer will be the manager  
of Future Underlying Investments.  
Each general partner (each a GP and collectively, the GPs) of an Existing Underlying  
Investment is a wholly-owned indirect subsidiary of SLF and is an affiliate of the Filers.  
The investment objectives and investment strategies of the Existing Underlying  
Investments are as follows:  
(a)  
Short PFI Fund: The Short PFI Fund seeks to achieve total return by providing  
income while preserving capital, by investing primarily in a diverse portfolio of  
short term private and public fixed income and floating rate assets. The Short PFI  
Fund seeks to take advantage of pricing inefficiencies often found in the private  
fixed income market. Examples of investments include secured and unsecured  
loans to large corporate borrowers; debt financing of real assets, which may include  
real property and infrastructure, with access to stable and enduring cash flow  
streams through the monetization of contractual payments or through loans secured  
by cash flow generating real assets that are difficult to replicate; loans to mid-  
market companies that tend to have limited access to public capital markets  
generally with strong equity sponsorship, where transactions provide access to  
diverse fixed and floating rate private investment opportunities across North  
America and select developed markets overseas; and investments in securitized  
lease/loan obligations supported by well diversified pools of assets such as  
manufacturing equipment and transportation assets with added levels of credit  
enhancement. The Short PFI Fund considers investment opportunities from a range  
of developed markets, including Canada and the United States. The Short PFI Fund  
also invests in a wide range of securities available in public fixed income markets  
(Public Assets) to seek to neutralize exposure to unintended risks relative to the  
Short PFI Fund’s guidelines and to support ongoing cash flow management.  
Positions in Public Assets work in conjunction with core private fixed income and  
floating rate asset positions to reflect SLC’s fundamental credit research views and  
SLC’s forecasts for interest rates, yield curves, and credit sectors/industries. The  
Short PFI Fund may also invest in government treasury bills and government  
guaranteed bonds maturing in less than one year, demand deposits, bankers’  
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acceptances and short term bank paper or short term corporate paper issued by  
Canadian companies (Money Market Instruments).  
(b)  
Mid PFI Fund: The Mid PFI Fund seeks to achieve total return by providing  
income while preserving capital over the long term, by investing primarily in a  
diverse portfolio of private and public fixed income assets. The Mid PFI Fund seeks  
to take advantage of pricing inefficiencies often found in the private fixed income  
market. Examples of investments include long term debt financing for power  
projects such as hydro, wind, co-generation and solar; public private partnership  
(P3) infrastructure projects including hospitals, bridges, roads, detention facilities,  
court houses and public transit systems; senior secured and unsecured loans to high  
credit quality large corporate borrowers; debt financing of real assets, which may  
include real property, with access to stable and enduring cash flow streams through  
the monetization of contractual payments or through loans secured by cash flow  
generating real assets that are difficult to replicate; senior loans to mid-market  
companies which generally do not access the public debt markets; and investments  
in securitized lease/loan obligations supported by well diversified pools of assets  
such as manufacturing equipment and transportation assets with added levels of  
credit enhancement. The Mid PFI Fund considers investment opportunities from a  
range of developed markets, including Canada and the United States. The Mid PFI  
Fund also invests in a wide range of Public Assets to seek to achieve positive active  
returns, neutralize exposure to unintended risks relative to the Mid PFI Fund’s  
benchmark, enhance liquidity and manage the Mid PFI Fund’s duration. Positions  
in Public Assets work in conjunction with core private fixed income and floating  
rate asset positions to reflect SLC’s fundamental credit research views and SLC’s  
forecasts for interest rates, yield curves, and credit sectors/industries. The Mid PFI  
Fund may also invest in Money Market Instruments.  
(c)  
Long PFI Fund: The Long PFI Fund seeks to achieve total return by providing  
income while preserving capital over the long term, by investing primarily in a  
diverse portfolio of long term private and public fixed income assets. The Long PFI  
Fund seeks to take advantage of pricing inefficiencies often found in the private  
fixed income market. Examples of investments include long term infrastructure  
debt financing for power projects such as hydro, wind, co-generation and solar;  
public private partnership (P3) infrastructure projects including hospitals, bridges,  
roads, detention facilities, court houses and public transit systems; long term senior  
secured and unsecured loans to corporate borrowers; debt financing of real assets,  
which may include real property, with access to stable and enduring cash flow  
streams through the monetization of contractual payments or through loans secured  
by cash flow generating real assets that are difficult to replicate; and infrastructure  
debt financing of long term care facilities. A material portion of the Long PFI  
Fund’s private assets are expected to benefit from strong government sponsorship.  
The Long PFI Fund considers investment opportunities from a range of developed  
markets, including Canada and the United States. The Long PFI Fund also invests  
in a wide range of Public Assets to seek to achieve positive active returns, neutralize  
exposure to unintended risks relative to the Long PFI Fund’s benchmark, enhance  
liquidity and manage the Long PFI Fund’s duration. Positions in Public Assets work  
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in conjunction with core private fixed income asset positions to reflect SLC’s  
fundamental credit research views and SLC’s forecasts for interest rates, yield  
curves, and credit sectors/industries. The Long PFI Fund may also invest in Money  
Market Instruments.  
(d)  
CCM Fund: The CCM Fund seeks to provide income while preserving capital over  
the long term, by investing primarily in a portfolio of first mortgage loans secured  
by properties located in Canada. The CCM Fund invests primarily in a portfolio of  
fixed-rate first mortgage loans secured by high quality income-producing office,  
retail, industrial and multi-family rental properties located in Canadian urban  
markets. The CCM Fund invests in mortgage loans to qualified, financially-strong  
borrowers with expertise in the ownership, management and operation of  
commercial real estate and/or multi-family rental properties and which loans are  
secured by properties located in growing metropolitan areas (typically with  
populations in excess of 100,000). The mortgage loans are diversified by  
geographic region and by property type. The CCM Fund may also invest in Money  
Market Instruments and public fixed income bonds issued by governments or  
corporations.  
31.  
32.  
The Underlying Investments are not, and will not be, investment funds as such term is  
defined under the Legislation.  
The Underlying Investments are, or will be, operated in a manner similar to how the Filers  
operate their investment funds. The Underlying Investments are, or will be, administered  
by SLC or an affiliate of a Filer and their assets are, or will be, managed by SLC or an  
affiliate, acting as portfolio manager. SLC or an affiliate calculates, or causes to be  
calculated, a NAV which is, or will be, used for the purposes of determining the purchase  
and redemption price of the securities of the Underlying Investments.  
33.  
34.  
The underlying private fixed income assets of the PFI Funds are independently valued on  
a monthly basis by one or more entities that are at arm’s length to SLC and its affiliates.  
Similar independent valuation is or will be carried out in respect of the underlying portfolio  
assets of each Future Underlying Investment and each Underlying Private Fund that invests  
more than 20% of its assets in private fixed income investments.  
On a monthly basis, the underlying mortgage assets of the CCM Fund are valued by SLC  
in accordance with section III(2.5) of National Policy 29 Mutual Funds Investing in  
Mortgages (NP 29), as if the CCM Fund were subject to that policy. The CCM Fund  
determines the value of each mortgage by discounting the expected future cash flows using  
a current market interest rate applicable to financial instruments with similar yield, credit  
quality and maturity characteristics as the mortgage. Valuation inputs typically include  
yields on benchmark government bonds and risk-adjusted spreads from current lending  
activities or loan issuances. A similar valuation is or will be carried out in respect of the  
underlying portfolio assets of each Future Underlying Investment and each Underlying  
Private Fund that invests in mortgages.  
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35.  
To the extent any Future Underlying Investment or future Underlying Private Fund holds  
assets (other than mortgages) that cannot be readily disposed of through market facilities  
on which public quotations in common use are widely available at an amount that at least  
approximates the amount at which the portfolio asset is valued in calculating the net asset  
value of the Underlying Private Fund, it will obtain a value from an independent third party  
valuator for such investments.  
36.  
37.  
Each Underlying Investment produces, or will produce, audited financial statements on an  
annual basis, in accordance with generally accepted accounting principles with a qualified  
auditing firm as the auditor of those financial statements. The Filers will have access to  
audited financial statements prepared in respect of each Underlying Investment made by a  
Top Fund.  
No Top Fund will actively participate in the business or operations of an Underlying  
Investment.  
Investments by Top Funds in the Underlying Investments and Underlying Private Funds  
38.  
39.  
Each investment by a Top Fund in an Underlying Investment will only be made if the  
investment is compatible with the investment objectives of the Top Fund. Each investment  
by a Public Fund in an Underlying Private Fund will only be made if the investment is  
compatible with the investment objectives of the Public Fund.  
Because the Underlying Investments are not “investment funds” under the Legislation, an  
investment by a Top Fund in an Underlying Investment is not subject to the fund-on-fund  
requirements in sections 2.5 and 2.5.1 of NI 81-102, but is otherwise subject to the limits  
prescribed by the Related Issuer Investment Restrictions from which the Filers are  
requesting relief.  
40.  
41.  
Paragraph 2.5(2)(a) of NI 81-102 prohibits a Public Fund from investing in the Underlying  
Private Funds as the Underlying Private Funds are not subject to NI 81-102 and paragraph  
2.5(2)(c) of NI 81-102 prohibits a Public Fund from investing in the Underlying Private  
Funds as the Underlying Private Funds are not reporting issuers in any Jurisdiction.  
Each Filer believes that the investment by a Top Fund in an Underlying Investment or  
Underlying Private Fund will provide the Top Fund with an efficient and cost-effective  
manner of pursuing portfolio diversification and asset diversification instead of purchasing  
the assets of each Underlying Investment or Underlying Private Fund directly. The Top  
Funds will gain access to the investment expertise of the portfolio manager to the  
underlying assets of each Underlying Investment or Underlying Private Fund, as well as to  
their investment strategies and asset classes.  
42.  
Investments by a Top Fund in an Underlying Investment or Underlying Private Fund will  
be effected at an objective price. The Filers’ policies and procedures provide that an  
objective price, for this purpose, will be the NAV per security of the applicable class or  
series of the Underlying Investment or Underlying Private Fund, as applicable.  
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43.  
44.  
A Top Fund will not invest in an Underlying Investment or Underlying Private Fund unless  
the portfolio manager of the Top Fund believes that the liquidity of the Top Fund’s  
portfolio is adequately managed through other strategies.  
Each Public Fund will not invest more than 10% of its NAV, at the time of purchase, in  
securities of any Underlying Investment, in compliance with section 2.1 of NI 81-102 and  
it will not invest in securities of any Underlying Investment that represent, at the time of  
purchase, more than 10% of the securities of such Underlying Investment, in compliance  
with section 2.2 of NI 81-102.  
45.  
46.  
If the Exemption Sought is granted, each Public Fund will not invest more than 10% of its  
NAV, at the time of purchase, in securities of Underlying Private Funds.  
The Public Funds will also comply with section 2.4 of NI 81-102 with respect to illiquid  
investments and each Filer expects to include an investment by a Public Fund in an  
Underlying Investment or Underlying Private Fund in its basket of illiquid securities for  
the purposes of this section.  
47.  
48.  
49.  
Each Private Fund will not invest more than 20% of its NAV, at the time of purchase, in  
securities of an Underlying Investment.  
Each Private Fund will not invest in securities of an Underlying Investment that represents,  
at the time of purchase, more than 15% of the securities of the Underlying Investment.  
Each Public Fund is, or will be, valued and redeemable daily. Each Private Fund is, or will  
be, valued at least monthly, and redeemable at least quarterly, but may be subject to lock-  
up periods, early redemption penalties, and/or other limitations on redemptions, depending  
on the amount redeemed.  
Generally  
Related Issuer Relief  
50.  
Subject to compliance with section 2.2 of NI 81-102 in respect of the Public Funds, the  
amount invested from time to time in an Underlying Investment by a Top Fund, together  
with one or more other Top Funds, may exceed 20% of the outstanding voting securities  
of the Underlying Investment. This may result by reason of a group of Top Funds providing  
initial investments into the Underlying Investment on the start-up of the Underlying  
Investment or for other investment reasons. Accordingly, each Top Fund could, together  
with one or more other Top Funds, become a “substantial securityholder” of an Underlying  
Investment within the meaning of the Legislation, further to which a Top Fund would be  
prohibited under the Related Issuer Investment Restriction from knowingly purchasing and  
holding securities of the Underlying Investment. The Top Funds are, or will be, “related  
investment funds”, as such term is defined in the Legislation by virtue of common  
management by a Filer.  
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51.  
52.  
In addition, from time to time, an officer or director of a Filer or an associate of any of  
them may own more than 10% of an Underlying Investment and may accordingly have a  
“significant interest” in an Underlying Investment within the meaning of the Legislation,  
further to which a Top Fund would be prohibited under the Related Issuer Investment  
Restriction from knowingly purchasing and holding securities of the Underlying  
Investment.  
Further, from time to time, a person or company who is a substantial security holder of a  
Top Fund or a Filer may have a “significant interest” in an Underlying Investment within  
the meaning of the Legislation, further to which a Top Fund would be prohibited under the  
Related Issuer Investment Restriction from knowingly purchasing or holding securities of  
the Underlying Investment.  
53.  
54.  
Each Filer does not anticipate that any fees or sales charges would be incurred, directly or  
indirectly, by a Top Fund with respect to an investment in an Underlying Investment that,  
to a reasonable person, would duplicate a fee payable by the Top Fund to a Filer or its  
investors.  
In the absence of the Related Issuer Relief, each Top Fund would be prohibited by the  
Related Issuer Investment Restrictions from investing in the Underlying Investments.  
Specifically, a Top Fund would be prohibited from (i) becoming a substantial  
securityholder of an Underlying Investment, together with other Top Funds and (ii)  
investing in an Underlying Investment in which an officer or director of a Filer, or a person  
or company who is a substantial securityholder of the Top Fund or a Filer, has a significant  
interest.  
Reporting Relief  
55.  
Pursuant to section 117(1)1 of the Legislation, every management company shall, in  
respect of each investment fund that is a reporting issuer to which it provides services or  
advice, file a report of every transaction of purchase or sale of securities between the  
investment fund and any related person or company within 30 days after the end of the  
month in which it occurs (the Reporting Requirement).  
56.  
In the absence of the Reporting Relief, each Filer, acting as the management company of  
the Public Funds, would be required to file a report of every purchase and sale of securities  
of the Underlying Investments by the Public Funds within 30 days after the end of the  
month in which such purchase or sale occurs.  
57.  
58.  
It would be costly and time-consuming for the Public Funds to comply with the Reporting  
Requirement.  
NI 81-106 requires the Public Funds to prepare and file annual and interim management  
reports of fund performance that include a discussion of transactions involving related  
parties to the Public Funds. Such disclosure is similar to that required under the Reporting  
Requirement and fulfills its objective to inform investors in the Public Fund about the  
transactions involving related parties to the Public Fund.  
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Consent Requirement Relief  
59.  
Paragraph 13.5(2)(a) of NI 31-103 prohibits a Filer, as the registered adviser of a Top Fund,  
from knowingly causing a Top Fund to purchase a security of an Underlying Investment  
in which a responsible person or an associate of a responsible person is a partner, director  
or officer, unless (i) the fact is disclosed to the client and (ii) the written consent of the  
client to purchase is obtained before the purchase.  
60.  
To the extent an officer or director of a Filer, as registered adviser to a Top Fund, is also a  
limited partner in an Underlying Investment or is a director or officer of the GP to an  
Underlying Investment, the registered adviser is prohibited from making the Top Fund  
purchase the security of the Underlying Investment, without client disclosure and consent.  
61.  
62.  
Further, a “responsible person” includes an affiliate of the registered adviser who has  
access to, or participates in, formulating an investment decision made on behalf of a Top  
Fund or advice to be given to a Top Fund.  
Each GP is a responsible person because each is an affiliate of the Filers and has access to,  
or participates in, formulating an investment decision made on behalf of a Top Fund or  
advice to be given to a Top Fund. Due to the nature of being a GP to an Underlying  
Investment, each GP will know, prior to the investment being made, whether or not a Top  
Fund proposes to make an investment in the Underlying Investment for which it acts as  
GP. It is expected that the GP of any Future Underlying Investment that is structured as a  
limited partnership will be a “responsible person”.  
63.  
64.  
It is expected that certain other responsible persons, or associates of responsible persons,  
of the registered adviser to a Top Fund may be partners, directors or officers of one or more  
Underlying Investments or directors or officers of one or more GPs in the future.  
Because of the above relationships, a Filer, that acts as a portfolio manager, may not cause  
a Top Fund to invest in an Underlying Investment without disclosure to the “client” and  
the prior written consent of the “client” to the investment. In accordance with the  
Companion Policy to NI 31-103, disclosure of the relationships to the “client” is required  
to be made to, and written consent obtained from, each investor in the Top Fund.  
65.  
The Private Funds can obtain such consent in the subscription agreement or other  
documentation signed by each investor at the time of investment, and thus no exemption is  
sought where a Filer is acting as registered adviser to a Private Fund. However, obtaining  
such consent is not practical in the circumstances of the Public Funds, given the diffuse  
nature of the ownership of the Public Funds.  
Public Fund-on-Private Fund Relief  
66.  
Paragraph 2.5(2)(a) of NI 81-102 prohibits a Public Fund from investing in the Underlying  
Private Funds as the Underlying Private Funds are not subject to NI 81-102 and paragraph  
2.5(2)(c) of NI 81-102 prohibits a Public Fund from investing in the Underlying Private  
Funds as the Underlying Private Funds are not reporting issuers in any Jurisdiction.  
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67.  
Since the Underlying Private Funds are not reporting issuers and are not subject to NI 81-  
102, the Public Funds are unable to rely upon the exemption codified under subsection  
2.5(7) of NI 81-102, for investments by reporting issuer investment funds in other reporting  
issuer investment funds, to invest in the Underlying Private Funds.  
General  
68.  
Since the Underlying Investments are not reporting issuers and are not “investment funds”  
pursuant to the Legislation, they are not subject to NI 81-102 and therefore the Public Funds  
are unable to rely upon the exemption codified under subsection 2.5(7) of NI 81-102, for  
investments by reporting issuer investment funds in other reporting issuer investment  
funds, to invest in the Underlying Investments.  
69.  
70.  
71.  
In addition, since the Underlying Investments are not “investment funds” pursuant to the  
Legislation, the Private Funds are unable to rely upon the exemption codified under  
subsection 2.5.1 of NI 81-102 for investments by non-reporting issuer investment funds in  
other investment funds, to invest in the Underlying Investments.  
The Private Funds are able to rely upon the exemption codified under subsection 2.5.1 of  
NI 81-102 for investments by non-reporting issuer investment funds in other investment  
funds, to invest in other Private Funds, and thus no exemption is sought for such  
investments.  
Subsection 6.2(3) of NI 81-107 provides an exemption for investment funds (including  
investment funds that are not reporting issuers) from the “investment fund conflict of  
interest investment restrictions” (as defined in NI 81-102) for purchases of related issuer  
securities if the purchase is made on an exchange. However, the exemption in subsection  
6.2(3) of NI 81-107 does not apply to purchases of non-exchange-traded securities and  
therefore does not apply to purchases of an Underlying Investment or Underlying Private  
Fund by a Top Fund.  
72.  
A Top Fund’s investment in an Underlying Investment or Underlying Private Fund will  
represent the business judgment of a responsible person uninfluenced by considerations  
other than the best interests of the Top Fund.  
Decision  
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the  
principal regulator to make the decision.  
The decision of the principal regulator under the Legislation is that the Exemption Sought is  
granted provided that:  
(a) an investment by a Public Fund in an Underlying Investment or Underlying Private Fund  
will be compatible with the investment objective and strategy of such Public Fund and  
included as part of the calculation for the purposes of the illiquid asset restriction in section  
2.4 of NI 81-102;  
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(b) an investment by a Private Fund in an Underlying Investment will be compatible with the  
investment objective and strategy of such Private Fund;  
(c) at the time of the purchase by a Top Fund of securities of an Underlying Investment, the  
Underlying Investment holds no more than 10% of its NAV in securities of other  
investment funds, unless the Underlying Investment:  
(i) has adopted a fundamental investment objective to track the performance of  
another investment fund or similar investment product;  
(ii) purchases or holds securities of investment funds that are "money market funds"  
(as such term is defined in NI 81-102); or  
(iii)purchases or holds securities that are "index participation units" (as such term is  
defined in NI 81-102) issued by an investment fund;  
(d) at the time of the purchase by a Public Fund of securities of an Underlying Private Fund,  
the Underlying Private Fund holds no more than 10% of its NAV in securities of other  
investment funds, unless the Underlying Private Fund:  
(i) has adopted a fundamental investment objective to track the performance of  
another investment fund or similar investment product;  
(ii) purchases or holds securities of investment funds that are "money market funds"  
(as such term is defined in NI 81-102); or  
(iii)purchases or holds securities that are "index participation units" (as such term is  
defined in NI 81-102) issued by an investment fund;  
(e) no sales or redemption fees will be payable as part of the investment by a Top Fund in the  
securities of an Underlying Investment or Underlying Private Fund, unless the Top Fund  
redeems its securities of an Underlying Investment or Underlying Private Fund during a  
lock-up period, in which case an early redemption fee may be payable by the Top Fund;  
(f) no management fees or incentive fees will be payable by a Top Fund for investing in an  
Underlying Investment or Underlying Private Fund that, to a reasonable person, would  
duplicate a fee payable by the Underlying Investment or Underlying Private Fund for the  
same service;  
(g) the securities of an Underlying Investment or Underlying Private Fund held by a Top Fund  
will not be voted at any meeting of the securityholders of the Underlying Investment or  
Underlying Private Fund, except that the Top Fund may arrange for the securities of the  
Underlying Investment or Underlying Private Fund it holds to be voted by the holders of  
securities of the Top Fund;  
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(h) where applicable, a Public Fund’s investment in an Underlying Investment or Underlying  
Private Fund will be disclosed to investors in such Public Fund’s quarterly portfolio  
holding reports, financial statements and/or fund facts/ETF facts documents;  
(i) the prospectus of a Public Fund will disclose in the next renewal or amendment thereto  
following the date of this decision, the fact that the Public Fund may invest in an  
Underlying Investment or Underlying Private Fund, which is an investment vehicle  
managed by a Filer or an affiliate of a Filer;  
(j) an offering memorandum or other disclosure document of a Private Fund will be provided  
to each new investor in a Private Fund prior to the investor’s purchase of securities of the  
Private Fund, and will disclose the following information at the next update of such  
document following the date of this decision:  
(i) that the Private Fund may purchase securities of one or more Underlying  
Investments;  
(ii) the fact that a Filer or an affiliate of a Filer is the investment fund manager and/or  
portfolio manager of the Private Fund and an affiliate of a Filer is the portfolio  
manager of the Underlying Investments; and  
(iii)that each Filer does not anticipate any fees or sales charges would be incurred,  
directly or indirectly, by the Private Fund with respect to an investment in an  
Underlying Investment that, to a reasonable person, would duplicate a fee payable  
by the Private Fund to a Filer or its investors;  
(k) the IRC of each Public Fund will review and provide its approval, including by way of  
standing instructions, prior to the purchase of an Underlying Investment or Underlying  
Private Fund in accordance with section 5.2(2) of NI 81-107;  
(l) the manager of the Public Funds complies with section 5.1 of NI 81-107 and the manager  
and the IRC of the Public Funds comply with section 5.4 of NI 81-107 for any standing  
instructions the IRC provides in connection with the transactions;  
(m)if the IRC becomes aware of an instance where the manager of a Public Fund, did not  
comply with the terms of a decision evidencing the Exemption Sought, or a condition  
imposed by Legislation or the IRC in its approval, the IRC of the Public Fund will, as soon  
as practicable, notify in writing the securities regulatory authority or regulator in the  
jurisdiction of the head office of the Public Fund’s manager;  
(n) where an investment is made by a Public Fund in an Underlying Investment or Underlying  
Private Fund, the annual and interim management reports of fund performance for the  
Public Fund will disclose the name of the Underlying Investment or Underlying Private  
Fund, as the case may be, and the fact that it is a related party to the manager of the Public  
Fund;  
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(o) where an investment is made by a Top Fund in an Underlying Investment or Underlying  
Private Fund, the records of portfolio transactions maintained by the Top Fund will include,  
separately for every portfolio transaction effected by a Top Fund by a Filer, the name of  
the Underlying Investment or Underlying Private Fund, as the case may be, being a related  
person in which an investment is made;  
(p) each Top Fund will invest in, and redeem, its investment in each Existing Underlying  
Investment and existing Underlying Private Fund at the NAV per security of the Existing  
Underlying Investment or existing Underlying Private Fund, which will be based on the  
valuation of the portfolio assets in which the Existing Underlying Investment or existing  
Underlying Private Fund invests and,  
(i) in the case of each Existing Underlying Investment or existing Underlying Private  
Fund that invests in assets that cannot be readily disposed of through market  
facilities on which public quotations in common use are widely available at an  
amount that at least approximates the amount at which the portfolio asset is valued  
in calculating the NAV of the Existing Underlying Investment or existing  
Underlying Private Fund, the NAV will be independently determined by an arm’s  
length third party; and  
(ii) in the case of each Existing Underlying Investment or existing Underlying Private  
Fund that invests in mortgages, the NAV will be determined in accordance with NP  
29, as if the Existing Underlying Investment or Existing Underlying Private Fund  
were subject to that policy;  
(q) Each Underlying Private Fund complies with Parts 2 and 4 of NI 81-102 and Part 14 of NI  
81-106 for so long as it is held by a Public Fund; and  
(r) a Top Fund will invest in a Future Underlying Investment or future Underlying Private  
Fund only where:  
(i) in the case of a Future Underlying Investment, it is structured in similar ways to the  
Existing Underlying Investments, including where an affiliate is the administrator  
and/or GP of the Future Underlying Investment;  
(ii) any Future Underlying Investment or future Underlying Private Fund, which invests  
in assets (other than mortgages) that cannot be readily disposed of through market  
facilities on which public quotations in common use are widely available at an  
amount that at least approximates the amount at which the portfolio asset is valued  
in calculating NAV, will calculate its NAV based on a valuation for such assets that  
is independently determined by an arm’s length third party;  
(iii)any Future Underlying Investment or future Underlying Private Fund, which invests  
in mortgages, will calculate its NAV in accordance with NP 29, as if the Future  
Underlying Investment or future Underlying Private Fund were subject to that  
policy; and  
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(iv) the Top Fund is provided with the audited annual financial statements of the Future  
Underlying Investment or future Underlying Private Fund, as applicable.  
“Darren McKall”  
Darren McKall  
Manager, Investment Funds and Structured Products  
Ontario Securities Commission  
Application # 2022/0228; SEDAR #3379926  
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