Category: Investments
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4352238 Canada Inc. v. SNC-Lavalin Group Inc., et al., 2019 ONSC 4423 – OMERS Status as Active Investor Does not Not Make it a Competitor
As a part of the privatization of Highway 407 (407), certain shareholders had a right of first refusal (ROFR) which would be activated on the sale of 407 shares. The ROFR could be waived, however, if the shares were sold to an organization not considered to be a "competitor".
The waiver specifies that competitors include organizations which have competing interests in infrastructure projects "other than solely as a financial investor such as a pension or superannuation fund . . .
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CAPSA Communique re Use of Leverage
CAPSA has published a communique regarding the use of leverage by pension plans, which sets out the key findings of a working group that has been studying the issue and next steps . . .
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OSFI Guide re Default Member Investment Option
OSFI has published Guidance Note: Default Option for Member Choice Defined Contribution Plans, which sets out OSFI’s interpretation and expectations related to default investment options for federally regulated DC plans.
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OSFI Final Derivatives Guideline
OSFI has published the final version of the Derivatives Sound Practices for Federally Regulated Private Pension Plans Guideline, which replaces the 1997 guideline “Derivatives Best Practices”. The Guideline, which covers both exchange traded and over-the-counter derivatives, outlines the factors that OSFI expects administrators of federally regulated private pension plans to consider when developing policies and procedures for risk management of derivative activities.
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FSCO Amends ESG Policy
FSCO has amended its Investment Guidance Note: Environmental, Social and Governance (ESG) Factors.
In the section entitled "ESG Factors Incorporated" (p. 4), the Note provides examples of information regarding how ESG factors have been incorporated that could be included in a Statement of Investment Policies & Procedures. In the prior version of this Note, FSCO stated this specific information was required.
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Nova Scotia Consultation re Plan Funding & Other Issues
Nova Scotia has published a consultation paper, "Pension Funding Framework Review and other issues affecting pension plans", which considers defined benefit plan funding and other regulatory issues.
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OSFI Draft Derivatives Guideline
OSFI issued a Draft Guideline for Derivatives Sound Practices for Federally Regulated Private Pension Plans (the New Guideline), which will replace the 1997 guideline “Derivatives Best Practices” (the 1997 Guideline). Comments are due by September 29, 2017.
The New Guideline, which covers both exchange traded and over-the-counter derivatives, outlines the factors that OSFI expects administrators of federally regulated private pension plans to consider when developing policies and procedures for risk management of derivative activities. Generally, the New Guideline expands upon the 1997 Guideline and reflects current practices with respect to derivatives.
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FSCO Report re SIPPs
FSCO has published a report based on Statement of Investment Policies & Procedures (SIPP) filings received from 6,300 pension plans between January 1, 2016 and July 31, 2016. (Since January 1, 2016, plan administrators have been required to file SIPPs with FSCO - for background information, see my earlier post.)
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OSFI Guide re PRPP Default Investment Options
OSFI published a Guidance Note setting out its expectations relating to the requirements for a default investment option as selected by the administrator of a pooled registered pension plan (PRPP).
The PRPP Regulations provide that the default option must be a balanced fund or a portfolio of investments that takes into account a member’s age. The Guidance Note sets out OSFI's expectations as to the characteristics of such funds/portfolios. In addition, the Note indicates that costs must be taken into account when selecting a default investment option.
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CRA Technical Interpretation re 10% Rule
The Canada Revenue Agency has released a Technical Interpretation regarding the application of the 10% rule to pension fund investment corporations.
Previously, the CRA had indicated that the 10% rule, which prevents pension plans from investing more than 10% of the pension plan’s assets in any one investment, applied at the level of pension plan corporations. The CRA has clarified that the 10% rule applies at the level of a pension plan.
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