The Funds are considered dealer managed mutual funds and follow the dealer manager provisions prescribed by National Instrument 81-102 – Mutual Funds ("NI 81-102"). GCIC Ltd., the manager and/or portfolio advisor of the Funds, has received exemptive relief from the Canadian securities regulatory authorities from those provisions which prohibit mutual funds managed and/or advised by GCIC Ltd. from investing in securities offerings where a related underwriter (such as Scotia Capital Inc.) is involved, unless the offering is being made under a prospectus and such purchases are made in compliance with National Instrument 81-107 – Independent Review Committee for Investment Funds ("NI 81-107"). Without such exemptive relief, GCIC Ltd. cannot knowingly make an investment during, or for 60 days after, the period in which GCIC Ltd. or its associate or affiliate acts as an underwriter or agent in a private placement offering of equity securities (the "Prohibition Period").
The Funds, along with other mutual funds managed by GCIC Ltd., can rely on exemptive relief from the Canadian securities regulatory authorities to invest in private placement offerings of equity securities of an issuer during the Prohibition Period even if Scotia Capital Inc., an affiliate of GCIC Ltd., acts as underwriter in offerings of securities of the same class, provided the issuer is at the time a reporting issuer in at least one province of Canada and the Independent Review Committee of the Fund approves of the investment in accordance with the approval requirements of NI 81-107. A copy of the exemptive relief can be found on the SEDAR website at www.sedar.com.
The Funds, along with the other mutual funds managed by GCIC Ltd., have obtained exemptive relief from the Canadian regulatory authorities to purchase debt securities of an issuer that does not have an approved credit rating from an approved credit rating organization in a distribution for which a dealer related to GCIC Ltd., such as Scotia Capital Inc., acts as an underwriter or agent, provided such purchases are made in compliance with the approval requirements of NI 81-107 and certain other conditions.
In addition to the above exemptive relief, the Funds may from time to time be granted an exemption from NI 81-102 to enable the Funds to invest during the Prohibition Period in securities of an issuer, in which an affiliate or associate of GCIC Ltd., such as Scotia Capital Inc., acts as an underwriter or agent in the issuer’s distribution of securities of the same class, where the Funds are not able to do so in accordance with NI 81-107 or the exemptive relief described above.