Investment fund complexes or groups with more than one
investment fund manager
Some investment fund complexes or
groups may have more than one entity within the fund complex that
can be considered as directing the business, operations or affairs
of an investment fund. For example, structures where investment
funds are organized as limited partnerships may have multiple
entities within the fund complex that could require investment fund
manager registration. Although the investment fund manager
functions are often delegated to one entity within the fund
complex, there may be more than one entity in the group subject to
investment fund manager registration, absent an exemption from
We will consider exemption applications
on a case-by-case basis to allow only one investment fund manager
within the fund complex to be registered. We will typically
consider the following factors when reviewing such
there is a management agreement in place delegating all or
substantially all of the investment fund management function from
the investment fund manager seeking the relief to an affiliate (or
to an entity whose mind and management is the same) that is
registered as an investment fund manager
the majority of the investment fund management functions are
performed by the registered affiliate (or entity whose mind and
management is the same)
the investment fund manager seeking the relief and the
registered affiliate have directors and officers in
* * * * * * * * * *
The language in the Companion Policy is of concern, as
it appears to suggest that exemptive relief may be required in
order to delegate investment fund management responsibilities
within a family of funds in all cases. OSC Staff have
subsequently confirmed, however, that the guidance is not
directed at boards of directors of corporate issuers or trustees of
trusts. According to the OSC, regulators take the view
that boards and trustees can in fact delegate
investment fund management responsibilities, provided the
delegation is structured properly.
Apparently, concern remains in respect of general partners of
limited partnerships, as the regulators are concerned that general
partners may not be able to delegate in the same manner as a board
of directors or trustees. On this point, the CSA take the
position that the delegation must be "to an affiliate (or to
an entity whose mind and management is the same) that is registered
as an investment fund manager." Accordingly, the CSA are
expecting limited partnerships and their general partners to seek
exemptive relief to make the IFM delegation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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