Press release from CNW Group
Fiera Capital Corporation announces intention to reopen the Fiera Tactical Bond Yield Fund to investors
Thursday, August 01, 2013
Fiera Capital Corporation announces intention to reopen the Fiera Tactical Bond Yield Fund to investors19:29 EDT Thursday, August 01, 2013
MONTREAL, Aug. 1, 2013 /CNW Telbec/ - The March 21, 2013 federal budget included measures that would eliminate certain tax benefits in investment funds that use forward contracts to convert income to capital gains for tax purposes. The budget describes this structure as "character conversion transactions". These measures apply to a forward contract entered into on or after March 21, 2013.
Because the Fiera Tactical Bond Yield Fund employed such a transaction as part of its investment strategy, Fiera Capital Corporation (TSX : FSZ) (Fiera) had taken the decision to protect existing unitholders and no longer accept new or additional investments to this Fund as of the close of business Monday, April 8, 2013.
In conjunction with the 2013 Federal Budget announced on March 21, 2013 ("2013 Budget Proposals"), the Department of Finance (Canada) released a Notice of Ways and Means Motions containing proposed amendments to the Tax Act that, if enacted, would limit the ability of investment funds to use forward agreements to convert fully-taxable ordinary income into capital gains for tax purposes. The 2013 Budget Proposals were supplemented by a "Backgrounder: Proposed Technical Changes to the Transitional Rules for the Economic Action Plan 2013 Character Conversion Measure" (collectively, the "2013 Character Conversion Proposals"). The 2013 Character Conversion Proposals generally apply to a forward agreement entered into (or the term of which is extended) on or after March 21, 2013.
After consulting with external counsel and tax advisors, Fiera understands that the Department of Finance (Canada) has expressed concern if investment funds increase the size of an existing forward agreement in excess of certain growth limits subsequent to the release of the 2013 Character Conversion Proposals. Based on the text published in the 2013 Character Conversion Proposals, considering the fact that the forward agreement entered into by the Fund (Forward Agreement) was executed prior to March 21, 2013 and that new subscriptions in the Fund will be limited to circumstances mentioned below, Fiera believes that there will be no change in tax treatment for unitholders until settlement of the Forward Agreement. There can be no assurance that the 2013 Character Conversion Proposals will be enacted in the form proposed.
As such, Fiera has taken the decision to reopen the fund to new subscriptions as soon as it receives a receipt from the Canadian securities regulatory authorities for the Fund's prospectus. New subscriptions will be accepted only to respond to the Fund's needs for cash in connection with (i) the payment by the Fund of fees, expenses or distributions; or (ii) the receipt by Fiera of orders to redeem Units. Investors should be aware that Fiera has filed a preliminary prospectus concurrently to this press release.
About Fiera Capital Corporation
Fiera is a leading publicly traded, independent investment firm with approximately $65 billion in assets under management. Fiera is one of only a handful of full service, multi-product investment firms in Canada, offering clients a proven top tier track record in equity and fixed income management as well as depth and expertise in asset allocation and alternative investments. For more information, visit www.fieracapital.com.
Additional information relating to the Fiera Tactical Bond Yield Fund and Fiera is available on SEDAR at www.sedar.com.
SOURCE: Fiera Capital Corporation
For further information:
Mélanie Tardif, CPA, CMA
Director, Corporate Communications and Investor Relations
Fiera Capital Corporation