Annually a MIC that issues its shares through a prospectus and registration exemption under securities law and regulations (e.g. not publicly traded companies), will be responsible for providing their investors with financial statements illustrating the performance of the MIC for its recent fiscal year end in a set of separate documents. However, in addition to appeasing their investors with proper disclosure and transparency a MIC will be required to do the following annually:
- A financial audit (completed by a qualified firm CA or CPA firm, does not need to be IFRS, as MICs are not automatically considered reporting issuers even though they are deemed “public companies” under the Canadian Income Tax Act);
- Annual resolutions to approve the financial statements;
- Annual resolutions to declare dividends, and possibly to catch up for dividends declared throughout the year on a monthly or quarterly basis;
- Annual resolutions to declare any bonuses to the officers and managers;
- Resolutions to effect any issuance of shares to new investors, and possibly to catch up for shares issued throughout the year to investors;
- Reporting Requirement for Exempt Distributions (i.e. for issuing shares to investors under an exemption such as the “Accredited Investor”), in the jurisdiction where the distribution/issuance takes place (e.g. Ontario) a form 45-106F1 for Investment Funds (e.g. a MIC can be considered an Investment Fund if it does not exhibit any control over the private companies it invests in that are in addition to the mortgages invested in or directly funded), is required to be filed with the provincial securities commission within 30 days after the MIC’s financial year-end if the exemption used was either an Accredited Investor, Minimum Amount or Additional Investment in Investment Funds, otherwise (i.e. not considered an investment fund and has not distributed/issued shares to investors under the previously mentioned exemptions) it needs to be filed within 10 days after the distribution/issuance.