In connection with an arm’s length acquisition transaction, apparently of the business of managing exchange-listed mutual fund trusts, holders of Series D or O Units of some of such funds (the Participating Public Funds) wish to become investors in corresponding “New Funds” and thereby continue to have their investments managed by the previous managers, rather than remaining as investors in the Participating Public Funds and having their investments managed by the new managers.
CRA provided s. 107.4 rollover rulings respecting a transfer of a proportionate part (the “Transfer Percentage”) of each security holding of each Participating Public Fund (based on the percentage of the NAV of the Participating Public Fund attributable to the units of the Series D or O Unitholders) to the corresponding New Fund (held by the Series D or O Unitholders) for no consideration, with the Series D or O Units in the Participating Public Fund being cancelled for no consideration.
[F]or each class of identical securities held by a Participating … Public Fund, [it] will transfer the Transfer Percentage of such securities to its corresponding New Fund. If and as necessary, each such Participating … Public Fund may take advantage of the provisions of subsection 107.4(2.1) of the Act to avoid the need to transfer a fractional share to its corresponding New Fund.