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Late in November, the Ontario Securities Commission (OSC) released OSC Staff Notice 81-740 Update on Long-Term Asset Fund Project which discussed key themes and questions from industry stakeholders on OSC Staff Notice 81-738 Next Steps Following OSC Consultation Paper 81-737 Opportunity to Improve Retail Investor Access to Long-Term Assets through Investment Fund Product Structures. Staff at the OSC is continuing to speak to stakeholders on topics such as:
- higher illiquid asset limits under National Instrument 81-102 Investment Funds;
- adapting the interval fund structure;
- adapting the Ontario Long Term Fund (OLTF) structure; and
- allowing non-accredited investors to hold qualified private funds in an RRSP.
Staff also confirmed that not every element that was in the original proposal in the OLTF consultation paper will be required for any exemptive relief decision that could be granted under the long-term asset fund project. An example provided was that redemption limits might not be appropriate for conventional mutual funds seeking to increase their percentage of illiquid assets, and that the cornerstone investor requirement may not be required for every OLTF structure.
Staff also used the notice to request more information from private fund managers with funds that hold illiquid assets so the regulator can better understand if there may be a retail market for those funds. Staff will work with parties interested in seeking relief to permit product launches as part of the long-term asset fund project.
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