CI Financial says it is considering how yesterday’s announcement by the Minister of Finance will affect its pursuit of a conversion to an income trust.

The minister asked the Minister of National Revenue to postpone providing advance rulings respecting flow-through entity structures while its consultations on these structures are underway.

On September 8, just after the Minister of Finance released his long-awaited consultation paper on income trusts, CI announced that it is pursuing conversion to an income trust and would be seeking an advance income tax ruling from the Canada Revenue Agency relating to the conversion.

“The government has previously introduced and withdrawn proposals regarding income trusts and yesterday’s announcement has yet again generated significant uncertainty,” said Bill Holland, CI CEO in a release.

Shares of CI were down about 10% on the Toronto Stock Exchange, retracing most of the sharp gains they had made since the mutual fund manager signaled in early September that it intended to convert to a trust.

In late afternoon trading, CI shares were off $2.78, or 10.82%, at $22.92.

“The government’s recent paper on income trusts released just two weeks ago did not indicate a shift in policy and so, following the release of that paper, we determined to pursue a conversion and seek a tax ruling. Tax rulings are a longstanding means of facilitating capital markets transactions by creating transparency for companies and their investors about the application of existing tax rules.

“By suspending access to rulings in the absence of a policy position on income trusts, the government is creating confusion and disrupting the ability of companies to structure their affairs in the most efficient manner possible. We are disturbed by the sudden and hurried nature of yesterday’s announcement. There was no discussion with CI before imposing this arbitrary decision that has such a material impact on CI’s shareholders.”

Holland said CI will continue to examine its options for conversion and will make an announcement at the appropriate time. “CI views conversion to an income trust as an important means to foster continued growth in the company.”