MONTREAL, April 5, 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 employs such a transaction as part of its investment strategy, Fiera Capital Corporation (TSX : FSZ) (Fiera) has 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.
Fiera is currently awaiting further clarification from the federal government on the implementation of these new measures to character conversion transactions implemented before March 21, 2013. After consulting with external counsels and tax advisors, Fiera understands that the Department of Finance Canada has expressed concern if investment funds increase the size of existing character conversion transactions subsequent to the release of the budget. Based on the text published in the federal budget, Fiera believes that there will be no change in tax treatment for existing unitholders up to the forward termination date (e.g. August 17, 2016).
About Fiera Capital Corporation
Fiera is a leading publicly traded, independent investment firm with approximately $65.3 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