November 18, 2014

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO (the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

ITG CANADA CORP. (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Act) for exemptive relief from the Prospectus Delivery Requirement (as defined below) in connection with distributions of an ETF Security (as defined below) (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia (together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 - Definitions, and MI 11-102 have the same meaning if used in this application, unless otherwise defined.

Authorized Dealer means a registered dealer that has entered, or intends to enter, into an agreement with the manager of an ETF (an “ETF Manager”) authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more ETFs on a continuous basis from time to time.

Designated Broker means a registered dealer that has entered, or intends to enter, into an agreement with an ETF Manager to perform certain duties in relation to the ETF, including posting a liquid two-way market for the trading of the ETF’s listed securities on an exchange or another marketplace.

ETF means an open end mutual fund that has listed a class of securities on an exchange in Canada.

ETF Security means a listed security of an ETF.

Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the Act applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.

Prospectus Right of Rescission means the right of action, given to a purchaser under the Act, for rescission or damages against a dealer, for failure of the dealer to send or deliver a prospectus to a purchaser of a security or its agent to whom a prospectus and any amendment was required to be sent or delivered but was not sent or delivered in compliance with the Prospectus Delivery Requirement. In Québec, such a purchaser may apply to have the transaction rescinded or the price revised, at the purchaser’s option, without prejudice to the purchaser’s claim for damages. Collectively, these rights are referred to as the Prospectus Rights of Rescission.

Right of Withdrawal means the right, given to a purchaser under the Act, to withdraw from an agreement of purchase and sale for a security to which the Prospectus Delivery Requirement applies if the dealer from which the purchaser purchases the security receives written notice evidencing the intention of the purchaser not to be bound by the agreement within two business days of receipt of the latest prospectus and any amendment. In Québec, this right is called a right to rescind. Collectively, these rights are referred to as the Rights of Withdrawal.

Trade Confirmation Right of Rescission means the right, given to a purchaser of an ETF Security under the Act in certain circumstances, to rescind the purchase within 48 hours after receiving confirmation of the purchase.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is currently and actively registered as investment dealers in the Jurisdictions.

2. The Filer is a registered Investment Industry Regulatory Organization of Canada dealer member that trades securities, including ETF Securities, for institutional clients.

3. The head offices of the Filer is located in Toronto, Ontario.

4. ETF Securities are, or will be, distributed on a continuous basis in one or more of the Jurisdictions pursuant to a prospectus. ETF Securities are generally only subscribed for or purchased directly from the ETF by Authorized Dealers or Designated Brokers. Investors are generally expected to purchase ETF Securities through dealers executing trades using the facilities of an exchange or another marketplace. ETF Securities may also be issued directly to ETF investors upon the reinvestment of distributions of income or capital gains.

5. The Filer is an Authorized Dealer and/or Designated Broker, depending on the ETF in question, that from time to time subscribes for and purchases newly issued ETF Securities (Creation Units) directly from one or more ETFs. The Filer is also generally engaged in purchasing and selling ETF Securities of the same class as the Creation Units in the secondary market. Transactions involving ETF Securities are an important part of the Filer’s business.

6. Creation Units are generally commingled with ETF Securities purchased in the secondary market. As such, it is not practicable for the Filer to determine whether a particular re-sale of ETF Securities involves Creation Units or ETF Securities purchased in the secondary market.

7. The Filer acts as a market-maker with respect to certain ETFs for which ETFs it has certain underwriting obligations for. The Filer also has market-making obligations for ETFs it acts as a Designated Broker for. The Filer distributes Creation Units in connection with its market-making obligations.

8. The Filer may not be able to efficiently fulfill a client’s order for ETF Securities solely through the secondary market therefore the Filer often has to transact in Creation Units for such ETFs which they act as Authorized Dealer or Designated Broker for. When the Filer sells ETF Securities for their clients on an exchange or another marketplace it does not know the identity of the purchaser.

9. The Filer may also be engaged in purchasing and selling, in the secondary market, ETF Securities of ETFs for which they are not an Authorized Dealer or Designated Broker.

Prospectus Delivery Requirement

10. The Filer is aware that the principal regulator takes the view that the first re‑sale of a Creation Unit on an exchange or another marketplace in Canada will generally constitute a distribution of Creation Units under the Act and that the Filer is subject to the Prospectus Delivery Requirement in connection with such re-sales. Furthermore, the Filer is aware that the Prospectus Delivery Requirement applies to Creation Units sold pursuant to the Filer’s market-making responsibilities for a particular ETF as a result of the Filer’s obligations as a Designated Broker and otherwise as describe herein, as applicable. Re‑sales of ETF Securities purchased by the Filer in the secondary market, that are not Creation Units, would not ordinarily constitute a distribution of ETF Securities.

11. Compliance with the Prospectus Delivery Requirement is not practicable in the circumstances of re-sales of Creation Units on an exchange or another marketplace by a Filer as the Filer will often not know the identity of a purchaser and will generally not know whether a sale involves Creation Units.

12. The Prospectus Delivery Requirement affects investors in ETF Securities differently depending upon whether their purchase order is filled through the re‑sale of Creation Units or through a secondary market trade. The Prospectus Delivery Requirement also affects investors in ETF Securities differently from investors in conventional mutual funds because, unlike sales of conventional mutual funds, only sales of ETF Securities that are Creation Units are distributions under the Act.

13. The Filer, when acting for a purchaser of an ETF Security, is required under the Act to deliver a trade confirmation to the purchaser in connection with each trade of an ETF Security, unless the Filer is exempt from the requirement in respect of a particular trade. Investors in ETF Securities will be better served if the Filer sends or delivers a prescribed summary disclosure document to all purchasers of ETF Securities who are customers of the Filer at the same time as they deliver the trade confirmation, regardless of whether the purchaser’s order is filled through the re-sale of a Creation Unit, or through the re-sale of an ETF Security purchased in the secondary market.

14. Various ETF Managers have obtained exemptive relief from their principal regulator from the requirements to include an underwriter’s certificate and to include a statement respecting purchasers’ statutory rights of withdrawal and rescission in an ETF’s prospectus (the “ETF Relief”). Conditions of the ETF Relief include that an ETF must file a prescribed summary disclosure document with the applicable Jurisdictions on the System for Electronic Document Analysis and Retrieval (the “Summary Document”).

Civil Liability for Prospectus Misrepresentations

15. The liability under the prospectus civil liability provisions of the Act, of an ETF or its investment fund manager for a misrepresentation in a prospectus, will not be affected by the grant of an exemption from the Prospectus Delivery Requirement. Under such provisions, purchasers of Creation Units offered by a prospectus during the period of distribution have a right of action for damages against the ETF and its investment fund manager without regard to whether the purchaser relied on the misrepresentation and whether or not the purchaser in fact received a copy of the prospectus. Under the secondary market disclosure civil liability provisions of the Act, purchasers of ETF Securities that are not Creation Units and, therefore, are not offered by prospectus during the period of distribution, have a similar right of action for damages for misrepresentation in a prospectus against the ETF and its investment fund manager without regard to whether the purchaser relied on the misrepresentation and whether or not the purchaser in fact received a copy of the prospectus.

16. The Filer takes the view, in the circumstances, that they are not underwriters within the meaning of the Act. The Filer does not provide the same services in connection with a distribution of Creation Units as would typically be provided by an underwriter in a conventional underwriting. They are not involved in the preparation of an ETF’s prospectus, do not incur any marketing costs or receive any underwriting fees or commissions from the ETFs or the ETF Managers in connection with the distribution of Creation Units. ETF Managers generally conduct their own marketing, advertising and promotion of the ETFs. The Filer generally seek to profit from its ability to create and redeem ETF Securities by engaging in arbitrage trading to capture spreads between the trading prices of ETF Securities and their underlying securities and by making markets for their clients to facilitate client trading in ETF Securities. In the circumstances, the Filer take the view that a purchaser of an ETF Security will not be entitled to exercise a statutory right of action for rescission or damages against an Authorized Dealer or Designated Broker in the event that the prospectus contains a misrepresentation.

Right of Withdrawal

17. Under the Act, if the Prospectus Delivery Requirement applies in respect of a sale of Creation Units, the purchaser of the Creation Units has a Right of Withdrawal.

18. It is not practicable for the Filer to provide purchasers of Creation Units on an exchange or another marketplace with a prospectus in accordance with the Prospectus Delivery Requirement as the Filer will often not know the identity of a purchaser and will generally not know whether the sale involves Creation Units.

19. Where the Exemption Sought is being relied upon by the Filer in respect of a re‑sale of Creation Units, the Right of Withdrawal will not be available to the purchaser of Creation Units if a prospectus is not required to be sent or delivered. Under the ETF Relief, an ETF will state in its prospectus or amendment to its prospectus that the Right of Withdrawal will not be available in such circumstances. Under the ETF Relief, an ETF will state in its Summary Document that under the securities legislation of some of the Jurisdictions an investor has the Trade Confirmation Right of Rescission and other rights and remedies if the Summary Document or prospectus contains a misrepresentation.

Prospectus Right of Rescission

20. Under the Act, if a dealer is subject to the Prospectus Delivery Requirement in respect of a sale of Creation Units, the purchaser of the Creation Units has the Prospectus Right of Rescission.

21. Where the Exemption Sought is being relied upon by the Filer in respect of a re-sale of Creation Units, the Prospectus Right of Rescission will not be available to the purchaser of Creation Units because the Prospectus Delivery Requirement will not apply. Under the ETF Relief, an ETF will state in its prospectus or amendment to its prospectus that the Prospectus Right of Rescission will not be available in such circumstances.

Trade Confirmation Right of Rescission

22. In applicable Jurisdictions, purchasers of ETF Securities will continue to have the Trade Confirmation Right of Rescission as it is not affected by the grant of an exemption from the Prospectus Delivery Requirement.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Act for the principal regulator to make the decision.

The decision of the principal regulator under the Act is that the Exemption Sought is granted, provided that and so long as:

1. The Filer undertakes to the principal regulator that it will, unless the Filer has previously done so, send or deliver to each purchaser of an ETF Security who is a customer of the Filer, and to whom a trade confirmation is required under the Act to be sent or delivered by the Filer in connection with the purchase, the latest Summary Document filed in respect of the ETF Security not later than midnight on the second day, exclusive of Saturdays, Sundays and holidays, after the purchase of the ETF Security.

2. The Filer provides to each ETF Manager of an ETF for which it is an Authorized Dealer or Designated Broker, an executed acknowledgement:

(a) acknowledging receipt of a copy of this decision;

(b) agreeing to send or deliver the Summary Document in accordance with this decision;

(c) undertaking that the Filer will attach or bind one ETF’s Summary Document with another ETF’s Summary Document only if the documents are being sent or delivered under this decision at the same time to an investor purchasing ETF Securities of each such ETF; and

(d) confirming that the Filer has in place written policies and procedures to ensure that there is compliance with the conditions of this decision.

3. The Filer provides to each ETF Manager of an ETF in whose ETF Securities it is generally engaged in purchasing and selling in the secondary market on behalf of its customers, but for which it is not an Authorized Dealer or Designated Broker, an executed acknowledgement:

(a) acknowledging receipt of a copy of this decision;

(b) agreeing to send or deliver the Summary Document in accordance with this decision;

(c) undertaking that the Filer will attach or bind one ETF’s Summary Document with another ETF’s Summary Document only if the documents are being sent or delivered under this decision at the same time to an investor purchasing ETF Securities of each such ETF; and

(d) confirming that the Filer has in place written policies and procedures to ensure that there is compliance with the conditions of this decision.

4. The Filer files with the principal regulator, to the attention of the Director, Investment Funds Branch, on or before January 31^st in each calendar year, a certificate signed by the Filer’s ultimate designated person certifying that, to the best of the knowledge of such person after making due inquiry, the Filer has complied with the terms and conditions of this decision during the previous calendar year.

5. The Exemption Sought terminates on September 1, 2015.

“Judith N. Robertson” “Christopher Portner”

Name: Judith N. Robertson Name: Christopher Portner

Title: Commissioner Title: Commissioner

Ontario Securities Commission Ontario Securities Commission