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Bank of Nova Scotia
Symbol C : BNS
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Scotiabank to merge Latin America fund into int'l fund

2019-03-07 10:04 ET - News Release

Ms. Alexandra Mathias reports


1832 Asset Management LP, trustee and manager of ScotiaFunds, will seek regulatory and unitholder approval for the mergers as shown in the attached table.

Terminating fund                                                       Continuing fund   
Scotia Latin American Fund    to merge into           Scotia International Equity Fund 
Scotia Pacific Rim Fund                      (formerly Scotia International Value Fund)  

If approved, the proposed mergers are expected to take effect as of the close of business on July 12, 2019. The independent review committee of the terminating funds and continuing fund has provided 1832 Asset Management with a positive recommendation for the mergers on the basis that they achieve a fair and reasonable result for the terminating funds and continuing fund.

The merger

Each merger will require the approval by a majority of the votes cast by unitholders of the applicable terminating funds and continuing fund at a special meeting of such unitholders, expected to be held jointly on or about June 14, 2019. The record date for the purpose of determining which unitholders are entitled to receive notice and vote at the special meetings will be the close of business on or about April 25, 2019. A management information circular containing a complete description of the matters to be considered at the special meetings will be made available to affected unitholders after the record date.

Each of the mergers will take place on a taxable basis, which would be considered a deemed disposition for tax purposes and may have tax consequences for unitholders of the terminating funds if held within a non-registered account.

For each merger that is approved, unitholders of the applicable terminating funds will receive units of the equivalent series of the continuing fund on a dollar-for-dollar basis. The terminating funds will then be wound up as soon as possible following the mergers.

Fixed administration fee reduction

If the mergers are approved, the manager is also proposing a 10-basis-point reduction in the fixed administration fee (FAF) for Series A and Series F of the Scotia International Equity Fund. With the reduction from 0.35 per cent to 0.25 per cent, the FAF of the continuing fund after the merger will be lower than that of the terminating funds. The fee reduction will take effect on or about July 12, 2019. The management fee for the terminating funds and continuing fund are the same and will remain unchanged.

Suspension of new purchases

Effective as of the close of business on March 15, 2019, purchases of units of the terminating funds will be suspended including purchases under existing preauthorized contribution plans. Unitholders will have the right to redeem units of the terminating fund up to the close of business on the business day immediately before the merger date, on or about July 8, 2019.

Following each merger, if implemented, unitholders can re-establish a preauthorized contribution plan or automatic withdrawal plan with respect to the continuing fund by contacting their adviser or registered dealer.

Rationale for mergers

The proposed mergers are a result of the manager's continuing review of the fund lineup and are believed to be in the best interest of unitholders of the terminating funds and continuing funds. All unitholders are expected to benefit from the increased scale and operational efficiencies of a larger continuing fund, postmerger. The mergers will also provide unitholders of the terminating funds with enhanced regional diversification with potentially less volatility.

About Bank of Nova Scotia

Scotiabank is Canada's international bank and a leading financial services provider in the Americas. The bank is dedicated to helping its more than 25 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. Scotiabank has a team of more than 98,000 employees and assets of over $1-trillion (as at Jan. 31, 2019).

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