Pro-Financial Updates Index Fund and other customers on status of regulatory matters

TORONTO, March 6, 2014 /CNW/ - On September 30, 2013 Pro-Financial Asset Management Inc. (PFAM) entered into an agreement with a purchaser to sell its investment management contracts.  PFAM and the purchaser are currently in discussions with OSC Staff concerning a hearing process in which unresolved issues as to the sale transaction and offering of PFAM's Index Funds can be decided expeditiously.  PFAM has worked over the last fourteen months to sell its management contracts as a means of partially reducing its ongoing capital deficiency.

Following a hearing on March 3, 2014 before the OSC to review and consider an application by PFAM to continue the distribution of its Index Funds beyond March 6, 2014, PFAM is issuing the following update on its regulatory position.

PFAM delivered audited financial statements and a calculation of excess regulatory capital on February 28, 2014 to OSC Staff approximately a month late.  The statements show a working capital deficit of $611,433 and there is a regulatory capital deficiency of $792,643.

The Commission decided at its March 3 hearing that the distribution of Index Fund Units could continue until April 7, 2014 to existing unitholders but not new investors.  The purchaser has applied for a variation of the March 3 ruling to permit the Index Fund unit distributions to new investors to continue until April 7.  Today the Commission postponed the effect of its March 3 order and extended the distribution period to March 11 when the purchaser's application to further extend the distribution period will be heard.

On February 10, 2014, Directors at the OSC objected to the sale transaction and refused the issuance of a final receipt with respect to the Index Fund's prospectus filed on January 27, 2014.  The prospectus was filed under an OSC order issued January 21, 2014 extending the lapse date for an earlier prospectus that became stale earlier that month.

PFAM acts as manager of the following Index Funds: PRO FTSE RAFI CANADIAN INDEX FUND, PRO FTSE RAFI US INDEX FUND, PRO FTSE RAFI GLOBAL INDEX FUND, PRO FTSE RAFI HONG KONG CHINA INDEX FUND, PRO MONEY MARKET FUND, PRO FTSE RAFI EMERGING MARKETS INDEX FUND, PRO FTSE NA DIVIDEND INDEX FUND, PRO FUNDAMENTAL BALANCED INDEX FUND AND PRO FUNDAMENTAL BOND INDEX FUND.

PFAM's registrar, transfer agent, fund accountant and recordkeeper is currently arbitrating a commercial dispute with PFAM.  This dispute has negatively affected the service offering and the flow of information to PFAM.

Calculation errors were made by PFAM in the Funds previously reported 2012 and 2013 management expense ratios ("MERs") of the Index Fund.

Details of originally published and actual MERs as of December 2012 and June 2013 are set forth in the tables below:

Fund Name Published in
the MRFP Dec
2012
Actual Dec
2012
Published in
the MRFP Dec
2012
Actual Dec
2012
Published in
the MRFP Dec
2012
Actual Dec
2012
  Class A Class A Class B Class B Class F Class F
PRO MONEY MARKET FUND 0.65% 0.90% N/A N/A 0.65% 0.90%
PRO FUNDAMENTAL BOND
INDEX FUND
1.75% 2.04% 2.00% 2.25% 1.10% 0.35%
PRO FUNDAMENTAL
BALANCED INDEX FUND
1.90% 2.16% 2.10% 2.35% 1.10% 0.46%
PRO FTSE NA DIVIDEND
INDEX FUND
1.90% 2.62% 2.30% 2.85% 1.00% 1.54%
PRO FTSE RAFI HONG KONG
CHINA INDEX FUND
1.92% 2.67% 2.15% 2.91% 0.80% 1.15%
PRO FTSE RAFI CANADIAN
INDEX FUND
1.99% 2.68% 2.10% 2.92% 0.68% 1.33%
PRO FTSE RAFI US INDEX
FUND
1.94% 2.65% 1.99% 2.85% 0.80% 1.28%
PRO FTSE RAFI GLOBAL INDEX
FUND
1.85% 2.67% 1.99% 2.87% 0.85% 1.20%
PRO FTSE RAFI EMERGING
MARKETS INDEX FUND
1.75% 2.74% 1.99% 2.98% 0.77% 1.07%

Fund Name Published in
the MRFP
June 2013
Actual
June 2013
Published in
the MRFP
June 2013
Actual
June 2013
Published in
the MRFP
June 2013
Actual
June 2013
  Class A Class A Class B Class B Class F Class F
PRO MONEY MARKET
FUND
0.65% 0.92% N/A N/A 0.65% 0.92%
PRO FUNDAMENTAL
BOND INDEX FUND
1.43% 3.17% 1.63% 3.53% 0.90% 1.78%
PRO FUNDAMENTAL
BALANCED INDEX FUND
1.71% 3.16% 1.81% 3.24% 0.95% 1.97%
PRO FTSE NA DIVIDEND
INDEX FUND
1.54% 2.99% 2.01% 3.19% 0.85% 2.03%
PRO FTSE RAFI HONG KONG
CHINA INDEX FUND
1.57% 3.07% 1.72% 3.38% 0.69% 2.09%
PRO FTSE RAFI CANADIAN
INDEX FUND
1.60% 3.19% 1.80% 3.47% 0.65% 2.26%
PRO FTSE RAFI US INDEX
FUND
1.56% 3.05% 1.62% 3.25% 0.70% 2.37%
PRO FTSE RAFI GLOBAL
INDEX FUND
1.71% 3.22% 1.80% 3.38% 0.75% 3.59%
PRO FTSE RAFI
EMERGING MARKETS
INDEX FUND
1.65% 3.28% 1.89% 3.49% 0.69% 2.73%

 

 

 

 

SOURCE Pro-Financial Asset Management