Investment Funds and Asset Management

Overview

Over the past several years, companies in the financial services sector have been under heightened scrutiny from both the public and the government. Increased regulatory and compliance requirements are having a significant impact on the industry as business becomes more complicated, the cost of doing business rises and the consequences of non-compliance become more significant. In addition, increased competition and the regulatory focus on transparency has contributed to downward pressure on fees.

In this challenging climate, industry players must continually work to not only protect, but grow, their market share, using strategies such as expanding their product lines, developing their base of clients and investors, and introducing innovative products. They need legal guidance that will help them meet their business goals while successfully dealing with the tough issues they face every day.

Osler’s Investment Funds and Asset Management Group provides that advice. Our lawyers have unparalleled expertise in advising clients on all aspects of investment fund and asset management activities. Osler has broad experience advising on the formation, distribution and management of mutual funds, exchange-traded funds (ETFs), private pooled funds and alternative funds, as well as related fund reorganization and M&A transactions involving industry participants. Osler advises on the securities law registration issues associated with the investment fund and asset management industry, including assisting our clients to develop and implement compliance systems and to communicate effectively with applicable Canadian securities regulatory authorities when applying for registration, SRO memberships or exemptions, navigating through regulatory audits or considering the impact of proposed legislative changes. In addition, Osler advises both investment managers and institutional investors establishing investment management relationships through managed accounts, fund investments or more complex structures.

Our team includes experts in securities regulation, tax, pensions and corporate law who provide highly specialized services to meet the needs of sophisticated clients. This means we can offer Canadian and non-Canadian clients of all sizes the guidance they require to achieve their business objectives while meeting their regulatory obligations.

Osler has extensive experience in the Canadian ETF space. We represent several key Canadian ETF managers – who together have in excess of 80% of the assets under management in this space in Canada – in their formations, launches, reorganizations and M&A activities. Osler also advises Canadian banks in respect of their ETF platforms.

We focus on building long-term, ongoing relationships with our clients and work with them to develop the solutions they need by providing legal counsel, risk assessment advice and business judgment.

Fund and product creation and structuring

We act as primary counsel to Canadian and U.S. investment fund managers on the formation and structuring of a wide range of public and private products and investment strategies, including

  • funds structured as single and multi-series trusts, partnerships or corporations
  • index-tracking and actively-managed ETFs
  • funds of funds
  • currency-hedged funds
  • commodity pools
  • funds with alternative investment strategies, including hedge funds
  • closed-end funds that may or may not automatically convert to ETFs or mutual funds

We assist investment managers with the preparation of

  • prospectuses
  • offering memoranda
  • trust agreements/limited partnership agreements
  • investment management agreements
  • subscription agreements
  • account opening documents and relationship disclosure information

We specialize in innovative investment fund structures and have experience advising clients regarding

  • multi-manager funds that engage non-Canadian investment managers as sub-advisers
  • fee structures involving management and/or incentive/performance fees charged inside or outside of the investment fund
  • pension and tax structuring issues including pension plan eligibility, RRSP eligibility and withholding tax issues

Ongoing operations and transactions

We provide clients with ongoing advice on their investment management and marketing and distribution activities, including

  • acting for Canadian financial institutions in relation to their investment management activities and obtaining exemptive relief to address conflict matters arising from their multiple business activities and structures
  • advising Canadian, U.S. and U.K. investment managers on firm registration and exemption matters, as well as investment fund distribution issues, in addition to advising their dealer affiliates on registration applications for membership in the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC)
  • providing guidance to advisers, investment fund managers and distributors, and independent review committees on fund governance and conflict of interest matters
  • negotiating investment management, sub-advisory and custodial agreements
  • advising on IDSA agreements, securities lending, share repurchase and reverse repurchase agreements
  • structuring and implementing restructurings of fund vehicles, including fund mergers, extensions and wind-ups
  • offering advice on acquisitions and divestitures within the investment funds industry

In addition, our team advises Canadian pension funds on their investments in Canadian and offshore investment funds, negotiating side letters and investment management agreements, and complying with the requirements of pension standards legislation and the Income Tax Act.

Compliance, investigation and litigation

We act as counsel to Canadian, U.S. and other international investment managers, investment fund managers and dealers/distributors on registration, regulatory and compliance matters, including

  • all aspects of National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations, Canada’s national registration rule, and MFDA and IIROC member rules
  • preparation and updating of policies and procedures manuals
  • Investigations and audits by securities regulatory authorities

We also represent clients in class actions and ordinary civil actions (potential or actual).

Québec specific issues

We provide specialized assistance to advisers, investment fund managers and dealers/distributors who face issues specific to operating in Québec, including

  • advising on Québec legal and regulatory issues, such as those arising under the Derivatives Act (Québec)
  • translating offering documents

Industry involvement

The investment funds and asset management industry turns to our lawyers for their expertise, with regulatory, self-regulatory and industry bodies regularly seeking our advice. Osler lawyers have served on the following committees:

  • OSC Advisory Committee on Investment Funds
  • OSC Working Committee on Regulatory Structure
  • Portfolio Managers Association of Canada (PMAC) – Industry Regulation & Taxation Committee, and PMAC member forums
  • Investment Funds Institute of Canada (IFIC) – Legal and Compliance Issues Committee

In addition, we have advised industry associations and clients on the pending or draft securities regulatory and income tax legislation. 

Key Clients

BlackRock Asset Management Canada

BMO Asset Management

First Trust

Investors Group

Purpose Investments

Related Expertise
  • Royal Bank of Canada

    Royal Bank of Canada on its acquisition of Phillips, Hager & North

  • Manulife Financial

    Manulife Financial on its acquisition of AIC’s Canadian retail investment funds business and on its acquisition of Berkshire

  • Barclays

    Barclays on the Canadian aspects of the sale of the Barclays Global Investors business to BlackRock

  • Brompton Group

    Brompton Group in its joint venture with Bloom Investment Counsel to take on the management of certain Citadel funds

  • Mackenzie Financial

    Mackenzie Financial on the launch of The Canadian Shield Fund

  • Manulife Financial

    Manulife Financial on its acquisition of AIC’s Canadian retail investment funds business

  • BlackRock Asset Management Canada

    BlackRock Asset Management Canada on its launch of new iShares exchange-traded funds

  • Chambers Canada: Canada’s Leading Lawyers for Business, 2016, recognized in the area of Investment Funds, Band 1.
    • "The individual lawyers and their expertise have been a tremendous asset to us. They are extremely knowledgeable, particularly in the area of mutual funds."
    • "They understand our needs, risk profile, and conditions under which we operate. I have ultimate confidence that they are looking at the transaction in the same way as we are."
  • Chambers Canada: Canada’s Leading Lawyers for Business, 2016, recognized in the area of Investment Funds: Private Equity: Fund Formation, Band 1.
  • The Canadian Legal Lexpert Directory, 2013-2015, Osler’s Investment Funds & Asset Management Group (Toronto), consistently recommended.
  • IFLR1000, 2015, Osler lawyers recognized in the area of Investment Management.
  • Who’s Who Legal, 2015, Osler lawyers recognized in the area of Investment Management.
  • The Legal Media Group’s Expert Guides, 2013, Osler lawyers recommended in the area of Investment Funds.
  • The Canadian Legal Lexpert Directory, 2010-2012, Osler’s Investment Funds & Asset Management Group (Toronto), repeatedly recommended.