Proposed creation of new class of units to fund trailer fees
The Declaration of Trust of an open-ended non-SIFT mutual fund trust (the “Trust”) with a corporate trustee (the “Trustee”) and with only one class of units will be amended to create two classes of units, so that the existing units will be re-designated as Class F units and a new class of units (Class A units) will be created which will have the same attributes as the Class F units except that they will bear exclusively an additional management fee, payable by an indirect subsidiary real estate operating LP to its GP (“Operating GP” – controlled by Trustee), which will fund the cost of trailer fees payable to investment dealers who have sold Class A units, with this resulting in a reduction of the distributions paid on the Class A, but not on the Class F, units. The amendments will also grant the Trustee the power and authority, from time to time, to create one or more classes of units on such terms and conditions as the Trustee may determine, provided that such creation does not adversely affect the pecuniary value of the interest of any unitholders in the Trust.
Amendment without Unitholder approval
These amendments will occur pursuant to a provision of the Declaration of Trust permitting an amendment by the Trustee without Special Resolution if, in the opinion of the Trust’s lawyers, it is not a material change which adversely affects the pecuniary value of the interest of any Unitholders and does not relate to:(i) any material change in the position, authority or responsibility of the Trustee; or (ii) any change in the investment policy of the Trust or to the Declaration of Trust, if such change is material or is otherwise required by the Declaration of Trust.
Purpose of amendment
The Trustee and Operating GP wish to increase the engagement with securities dealers who charge trailer fees in order to grow the overall investor and asset base of the Trust. The amendments are contemplated to better target trailer fees to those who purchase their units through securities dealers.
Rulings
The Amendments will not, by themselves, result in a disposition by the Trust of its property or the creation of a new trust. The re-designation of the existing units into Class F units will not, by itself, result in their disposition. The creation of the Class A units will not cause s. 104(7.1) to apply.