DECISION No. 2025-PDG-0043: Coordinated General Decision 81-930 regarding the exemption from certain repurchase agreement obligations for investment funds

DECISION No. 2025-PDG-0043
Coordinated General Decision 81-930 regarding the exemption from certain repurchase agreement obligations for investment funds Definitions

1. The terms defined in the Securities Act, CQLR, c. V-1.1, (the "SA"), Regulation 11-102 respecting the Passport System, CQLR, c. V-1.1, r. 1 and Regulation 81-102 respecting Investment Funds, CQLR, c. V-1.1, r. 39 (the "Regulation 81-102") have the same meaning in this decision.
   Background
2. Investment funds that are reporting issuers must comply with the obligations set out in Regulation 81-102 regarding repurchase agreements.
3. Investment funds constituted under the Act to establish the Fonds de solidarité des travailleurs et des travailleuses du Québec (FTQ), CQLR, c. F-3.2.1, the Act to establish Fondaction, le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l’emploi, CQLR, c. F-3.1.2 or the Act to establish Capital régional et coopératif Desjardins, CQLR, c. C-6.1 are also subject to these obligations, particularly those expressly referred to in the definition of "certain repurchase agreement obligations".
4. The Bank of Canada (the "Bank") has established the Standing Term Repo Facility (the "STRF"), which aims to preserve the stability of the Canadian financial system by helping market participants address liquidity issues that may arise from severe liquidity strains across all market segments. Through it, the Bank will repurchase certain eligible fixed-income securities issued or guaranteed by the Government of Canada or a province. The STRF provides Canadian dollar funds with a maturity of up to 30 days to eligible participants.
5. The Autorité des marchés financiers (the "AMF") is aware that investment funds exposed to Canadian dollar money markets and/or fixed-income securities may need to access the STRF to manage their liquidity when it is subject to severe strains in these markets.
6. An investment fund that accesses the STRF may not comply with certain repurchase agreement obligations set out in Regulation 81-102 for the following reasons:
   a) the cash to be delivered to the investment fund at the start of the STRF transaction would be less than an amount equal to at least 102% of the market value of the securities sold, as required by subparagraph 5 of paragraph 1 of section 2.13 of Regulation 81-102; b) the securities sold would be valued at market value each business day, but the proceeds of sale held by the investment fund would not be adjusted each business day, if applicable, as required by subparagraph 6 of paragraph 1 of section 2.13 of Regulation 81-102; c) given paragraphs a and b above, the Bank's master repurchase agreement for the STRF would not comply with all obligations set out in paragraph 1 of section 2.13 of Regulation 81-102, as required by subparagraph 2 of that paragraph; d) the cash delivered to the investment fund in exchange for the securities sold would be used for its liquidity management purposes, which is not permitted by paragraph 2 of section 2.13 of Regulation 81-102; e) given the rapid management of liquidity during periods of severe strain in Canadian dollar money markets and/or fixed-income securities markets, it might be that:
   i) an investment fund other than an exchange-traded mutual fund that does not continuously offer its securities does not have enough time to provide the information required by subparagraph a of paragraph 1 of section 2.17 of Regulation 81-102 before accessing the STRF; ii) an exchange-traded mutual fund that does not continuously offer its securities or a closed-end investment fund does not have enough time to publish the press release containing the information required in the prospectus and the date on which it intends to access the STRF, as provided by subparagraph b of paragraph 1 of section 2.17 of Regulation 81-102; iii) the investment fund does not have enough time to send its securityholders the 60-day written notice provided by subparagraph c of paragraph 1 of section 2.17 of Regulation 81-102 before accessing the STRF. Decision
7. Given section 263 of the SA and considering that it would not be prejudicial to the public interest, the AMF decides to exempt investment funds that are reporting issuers from the application of subparagraphs 2, 5 and 6 of paragraph 1 of section 2.13, paragraph 2 of section 2.13 and paragraph 1 of section 2.17 of Regulation 81-102 to allow them to access the STRF when the following conditions are met:
   a) the manager has determined that it is in the best interest of the investment fund to access it; b) the cash delivered to the investment fund in exchange for the securities sold under the STRF is used for its liquidity management purposes; c) as soon as possible and in any case no later than five business days after the Bank approves its application to become an eligible STRF counterparty, the investment fund notifies its principal regulator, by email to the address indicated in Schedule B, that its application has been approved and that it intends to rely on this decision; d) as soon as possible and in any case no later than five business days after each use of the STRF, the investment fund notifies its principal regulator by email, to the address indicated in Schedule B, that it has accessed the STRF; e) as soon as possible after each use of the STRF, the investment fund transmits to its principal regulator the information required in Schedule A, in an Excel document, by email to the address indicated in Schedule B. Effective Date
8. This decision takes effect on July 24, 2025.
   Done on July 22, 2025

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Yves Ouellet
President and Chief Executive Officer

SCHEDULE A

1. Date (dd/mm/yy)
2. Name of the investment fund manager
3. Name of the investment fund
4. Start date of STRF access (dd/mm/yy)
5. End date of STRF access (dd/mm/yy)
6. Amount obtained under the STRF (CA$)
7. Amount obtained under the STRF expressed as a percentage of the net asset value of the investment fund on the start date of access to this facility (%)
8. Outstanding amount of all borrowings by the investment fund, including the amount obtained under the STRF, expressed as a percentage of its net asset value on the start date of access to this facility (%)
9. Outstanding amount of all borrowings by the investment fund expressed as a percentage of its net asset value on the end date of access to this facility (%)

SCHEDULE B
CSA Member Jurisdiction Email
British Columbia examiners@bcsc.bc.ca
Alberta Investment.Funds@asc.ca
Saskatchewan corpfin@gov.sk.ca
Manitoba securities@gov.mb.ca
Ontario IMDivision@osc.gov.on.ca
Quebec dsfi@lautorite.qc.ca
New Brunswick IMDivision@osc.gov.on.ca
Nova Scotia NSSC_Corp_Finance@novascotia.ca
Prince Edward Island IMDivision@osc.gov.on.ca
Newfoundland and Labrador SecuritiesExemptions@gov.nl.ca Yukon IMDivision@osc.gov.on.ca Northwest Territories IMDivision@osc.gov.on.ca Nunavut IMDivision@osc.gov.on.ca