Where a class of units of a unit trust is issued in two series:
1. in Reg. 4801(a)(i), is it sufficient if only one of the series of the class is qualified for distribution to the public?
2. in Reg. 4801(b), does the requirement that there be at least 150 unitholders pertain to a class rather than to each series in the class?
3. in Reg. 4803(1), in determining the number of units that constitutes a block, is it possible to have different block sizes depending on the value of each series of units? E.g. if the FMV of the first series is $10 per unit and the FMV of the second series is $40, is it appropriate to consider a block of units to consist of 100 units of the first series or 25 units of the second series?
3. Generally no.
1. If there are units of one series of a class that are qualified for distribution to the public, then there are units of that class that are so qualified per Reg. 4803(2)(a). This is consistent with the other two positions adopted herein since they do not make any distinction based on series.
2. There is no rule for trusts that is similar to the rule for corporations in subsection 248(6) that treats each series of a class of shares as a class itself. Accordingly, where units of a class are issued in more than one series, there must be at least 150 unitholders each of whom owns a block of units of any series of the class. In the hypothetical example, if there are 100 unitholders of one series, there must be at least 50 unitholders of the other series.
3. Since 248(6) does not treat a reference to a class of units of a trust as a reference to a series within the class, it is not generally appropriate to determine different block sizes for different series. If only units of the second class were issued, the block size would be 25 since the fair market value of the units would be at least $25 but less than $100. If there were also units of the first series issued but there were 150 unitholders each holding 25 units of the second series, the trust should still be able to qualify on the basis of having a sufficient number of unitholders of the second series. That is, the fact that two series are issued should not detract from the ability of the trust to qualify if it were to have not issued any units of the first series. However, where the number of unitholders of both series must be considered, it is our view that the block size for the class should be based on the value of the cheaper series.