1 Regulatory Framework -

1.1 What legislation governs the establishment and operation of Alternative Investment Funds?

In Canada, the term “alternative investment fund” or AIF is not a term of art. Canadian securities laws distinguish between collective investment vehicles that are “investment funds” and those that are not investment funds. Consequently, certain AIFs in Canada are regulated as investment funds. Additional regulations apply to an investment fund that files a prospectus and is a “reporting issuer”. Certain prospectus-qualified mutual funds, designated as “alternative mutual funds”, are marketed to retail investors as liquid AIFs or “liquids alts”. Also available to the retail market in Canada are listed issuers that are “investment entities” under International Financial Reporting Standards (IFRS). These are “hybrid” issuers that have portfolios, or portions thereof, managed by a registered portfolio manager and are marketed as public private equity funds.