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Bulletin #0543-P

Policy
Restructuring of ROI Pooled Funds

Contact: Ken
Woodard
BULLETIN #0543 – P
Director, Communications & Membership Services
October 12, 2012
Phone: (416) 943-4602
E-mail: kwoodard@mfda.ca

MFDA Bulletin

Compliance

For Distribution to Relevant Parties within your Firm

Restructuring of ROI Pooled Funds

On August 24, 2012, unitholders of the ROI High Income Private Placement Fund, ROI Private
Placement Fund and ROI Strategic Private Placement Fund (the “Funds”) approved resolutions
authorizing the proposed restructuring of the Funds.

The Funds are expected to be restructured as closed-end investment funds publicly traded on an
exchange or marketplace.

MFDA staff expects Members to take reasonable steps to ensure clients are fully informed of the
restructuring of the Funds and limitations on a Member’s ability to continue to hold or trade in
the Funds. Clients should be advised of:

• options for holding the Funds and any additional costs of doing so;
• limitations on the Member’s ability to trade in the Funds;
• relevant processing times for transferring the Fund positions;
• any deadlines for clients to select a course of action; and
• any consequence of not selecting an option (for example, if the Funds are registered in
client name at a date specified by the issuer, the client will be issued a certificate which
may result in additional delays and costs to transfer and trade in the securities.)

The options available to clients will depend on whether the Member is registered as an exempt
market dealer (“EMD”) and whether the Funds are registered in client name or nominee name.

1.
Where a Member is not licensed as an EMD, the Member must take immediate and
reasonable steps to request that clients open an account with an investment dealer and
transfer the Fund positions into the account at the investment dealer. Approved Persons
would no longer be able to trade or advise in the Funds or continue to receive


compensation from the Funds as the Funds would no longer be securities that could be
traded under a mutual fund license. Members who are EMDs can also decide to adopt
this approach.

2.
Where a Member is licensed as an EMD and the Funds are registered in nominee name
(including in nominee name with a carrying dealer), the Member can continue to hold the
Funds, provided the Member can demonstrate it is capable of reporting the position
accurately on client account statements. Members should also advise clients that:

• the Member can hold but not trade the Funds through the exchange; and
• in order to trade the Funds through the exchange, the client will have to open an
account at an investment dealer and transfer the Fund positions into the account at an
investment dealer, which may result in a delay in the client’s ability to trade in the
Funds.

Once the client transfers the Funds to an investment dealer, the Approved Person can no
longer trade or advise in the Funds or continue to receive compensation from the Funds.

3.
Where a Member is licensed as an EMD and the Funds are registered in client name, the
Member can obtain written client consent to re-register the securities into nominee name
(including nominee name with a carrying dealer). The Member would then have to
ensure that it is able to comply with the conditions outlined in scenario 2 above.

If a Member has an alternative approach to those described above or has additional questions,
please contact the Sales Compliance Manager assigned to the firm.

DOCs#314589
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