April 2015 Investment Funds Practitioner: Issues And Tips

The Ontario Securities Commission (OSC) recently released a new edition of the Investment Funds Practitioner, providing an overview of recent issues arising from applications for exemptive relief, prospectuses and continuous disclosure documents filed by investment funds. This legal update summarizes key issues and provides tips for investment fund issuers.

Dual class flow-through LPs

Issue: The OSC has observed that some flow-through limited partnerships are attempting to issue two classes of units under the same prospectus where each class has its own distinct portfolio of assets and is a separate non-redeemable investment fund (Dual Class LPs).

Tip: If one prospectus is used to qualify a Dual Class LP, the prospectus must provide disclosure on a per class (i.e., per fund) basis, rather than on an aggregate basis (i.e., for the partnership as a whole) with respect to certain categories, including: (i) the minimum offering amount; (ii) the maximum leverage