Cash borrowing
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May borrow cash in an amount up to a maximum 5% of the fund’s net asset value (NAV), generally only as a temporary measure to accommodate redemptions or to settle portfolio transactions, provided that the lender is a qualified custodian
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May borrow cash for investment purposes in an amount up to a maximum of 50% of the fund’s NAV, provided that the lender is a qualified custodian or sub-custodian, including a foreign sub-custodian
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Same as alternative mutual funds
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Short selling
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May sell securities short having a maximum value equal to 20% of fund’s NAV in the aggregate, with single issuer limited to 5% of fund’s NAV
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May sell securities short having a maximum value equal to 50% of fund’s NAV in the aggregate, with single issuer limited to 10% of fund’s NAV
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Same as alternative mutual funds
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Cash cover for short sales
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150% cash cover required. Can’t use cash from short sale to enter into long position in a security, other than a cash cover security
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No cash cover required
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Same as alternative mutual funds
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Combined cash borrowing and short sale limit
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Total cash borrowed and market value of securities sold short cannot exceed 50% of fund’s NAV (however, in the case of conventional mutual funds, reaching this limit would not be possible)
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Same as conventional mutual funds
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Same as conventional mutual funds
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OTC and exchange traded derivatives
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Designated rating requirements for uncleared options, debt-like securities, swaps and forward contracts (for instrument or counterparty)
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Designating rating requirements do not apply
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Same as alternative mutual funds
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Counterparty exposure limit of 10% of fund’s NAV based on mark-to-market value of exposure under uncleared derivatives position, unless the counterparty (or its guarantor) meets certain designated rating requirements
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Same as conventional mutual funds
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Same as conventional mutual funds
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Investments in options (or debt-like securities with an options component) for non-hedging purposes limited to 10% of fund’s NAV. Full coverage obligations in respect of options, forwards, futures and swaps if used for non-hedging purposes
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Coverage obligations for specified derivatives used for non-hedging purposes will not apply
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Same as alternative mutual funds
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Total leverage limit
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Leverage is implicitly restricted due to limited ability to borrow and ability to enter in uncovered derivatives
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Gross exposure being sum of cash borrowings, market value of securities sold short and notional value of specified derivative positions (other than positions used for hedging purposes) cannot exceed 300% fund’s NAV
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Same as alternative mutual funds
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Concentration restriction
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Maximum 10% of the fund’s NAV in any one security with limited exceptions
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Maximum 20% the fund’s NAV in any one security with limited exceptions
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Same as alternative mutual funds
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Control restriction
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Maximum 10% of the (a) votes attaching to the outstanding voting securities of the issuer, or (b) the outstanding equity securities of the issuer, with limited carve-outs including for investment fund securities and index participation units. Cannot invest in securities of an issuer for the purpose of exercising control over, or management of, the issuer
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Same as conventional mutual funds
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Same as conventional mutual funds
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Prohibited investments types
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- Real property
- Mortgages other than guaranteed mortgages
- Maximum 10% of fund’s NAV in guaranteed mortgages
- Precious metal certificates (other than gold, silver, platinum or palladium)
- Physical commodities (other than up to 10% in gold, silver platinum or palladium, permitted gold, silver platinum or palladium certificates, or derivatives which have a physical commodity or precious metal certificate underlier)
- Loan syndication or loan participation interests if the fund would be required to assume administration of loan in relation to borrower
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Same as conventional mutual funds, but unrestricted in respect of precious metal certificates and physical commodities
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Same as alternative mutual funds
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Illiquid assets
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Maximum 10% of fund’s NAV in illiquid assets (with hard cap of 15% for up to 90 days)
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Same as conventional mutual funds
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Maximum 20% of fund’s NAV in illiquid assets (with hard cap of 25% for up to 90 days)
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Investments in other investment funds
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Up to 100% of fund’s NAV in underlying conventional mutual funds and ETFs subject to NI 81-102 (unless index participation unit which may not be subject to NI 81-102)
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Up to 100% of fund’s NAV in underlying conventional mutual funds and ETFs subject to NI 81-102 (unless index participation unit which may not be subject to NI 81-102)
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Same as alternative mutual funds
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Up to 10% of fund’s NAV in underlying public alternative funds and non-redeemable investment funds subject to NI 81-102 (unless index participation unit which may not be subject to NI 81-102)
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Up to 100% of fund’s NAV in underlying alternative mutual funds and non-redeemable investments funds subject to NI 81-102 (unless index participation unit which may not be subject to NI 81-102), or in underlying funds that comply with the provisions of NI 81-102 that are applicable to alternative mutual funds or non-redeemable investment funds and that are reporting issuers in Canada (unless index participation unit)
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Same as alternative mutual funds
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Underlying fund cannot invest more than 10% of its NAV in other investment funds (except if it’s a clone fund, or otherwise invests in money market funds or index participation units)
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Same as conventional mutual funds
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Same as conventional mutual funds
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Restrictions on granting of security interests
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Cannot provide security interest over portfolio assets, except in connection with acceptable cash borrowings, permitted derivative and short sale transactions, or for securing fees and expenses of custodians and sub-custodians
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Same as conventional mutual funds
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Same as conventional mutual funds
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Securities lending, repurchase transactions and reverse repurchase transactions
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Permitted, subject to certain requirements
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Same as conventional mutual funds
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Same as conventional mutual funds
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