What criteria does the independent review committee use to determine if a potential conflict of interest, such as interfund trading, should be approved?

The Independent Review Committee (IRC) is mandated by National Instrument 81-107 to oversee conflict of interest matters for an investment fund. Its primary duty when reviewing a potential conflict of interest, such as inter-fund trading, is to determine if the manager's proposed action will achieve a fair and reasonable result for the investment fund. This is the fundamental test the IRC applies to protect the interests of the fund's unitholders. If this condition is met, the IRC can provide its approval for the action.

B. While the action must not contravene any regulation, the IRC's specific approval criterion is the "fair and reasonable result," not just general regulatory compliance.
C. Protecting unitholder rights is an outcome of the IRC's work, but its specific test is whether the result is fair and reasonable for the fund as a whole.
D. Unitholder approval is a separate requirement for certain fundamental changes, not the standard criterion used by the IRC for its conflict of interest decisions.

1. Canadian Securities Administrators (CSA). (2014). National Instrument 81-107 Independent Review Committee for Investment Funds. Part 5, Section 5.2(2). "The independent review committee of an investment fund must review a conflict of interest matter referred to it by the manager and must give the manager its approval if, in its determination, the proposed action achieves a fair and reasonable result for the investment fund."