October 12, 2018

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 PURPOSE INVESTMENTS INC. (the Filer)

AND

IN THE MATTER OF

PURPOSE GOLD BULLION FUND

(the Fund)

Decision

I. Background

The principal regulator in the Jurisdiction has received an application (the Application) from the Filer on behalf of the Fund for a decision under the securities legislation of the Jurisdiction (the Legislation) that exempts the Fund from:

(a) paragraphs 2.3(1) (e) and (f) of NI 81-102 to permit the Fund to invest up to 100% of its net assets, taken at market value at the time of purchase, in physical gold bullion in 1,000 gram bar sizes (or 100 or 400 troy ounce international bar sizes) (Bullion) and permitted gold certificates;

(b) subsection 9.4(2) of NI 81-102, to permit the Fund to accept a combination of cash and Bullion as subscription proceeds for Units;

(c) subsection 10.4(1) of NI 81-102 to permit the Fund to pay redemption proceeds in connection with the redemption of Units pursuant to a Monthly Redemption (as defined below) later than two business days after the applicable Monthly Redemption Date (as defined below); and

(d) subsection 6.1(1) and 6.2 of NI 81-102 to permit the Royal Canadian Mint (the Mint) to act as custodian to hold the Fund’s Bullion,

collectively, the Requested Relief.

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

(a) the Ontario Securities Commission is the principal regulator for the 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 all of the provinces and territories of Canada other than Ontario (together with Ontario, the Jurisdictions).

II. Interpretation

Terms defined in National Instrument 14-101 – Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined. In addition, the following terms have the following meanings:

(a) Basket means Bullion in such amount as determined by the Filer in its discretion from time to time.

(b) Bullion means physical gold bullion.

(c) Dealer means a dealer (that may or may not be a Designated Broker) that enters into a continuous distribution agreement with the Filer or an affiliate of the Filer on behalf of the Fund, pursuant to which the Dealer may subscribe for and purchase Units from the Fund.

(d) Designated Broker means a dealer that enters into an agreement with the Filer or an affiliate of the Filer on behalf of the Fund to perform certain duties in relation to the Fund.

(e) ETF Units means, collectively, the ETF units, ETF non-currency hedged units and U.S. dollar denominated ETF non-currency hedged units and ETF Unit means any one of them.

(f) Exchange means the Toronto Stock Exchange (TSX) or another stock exchange recognized by the Ontario Securities Commission.

(g) Prescribed Number of Units means the number of ETF Units determined from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.

Unless otherwise specified, all references to money amounts are to the lawful currency of Canada.

III. Representations

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

The Filer

1. The Filer is a corporation amalgamated under the laws of the Province of Ontario.

2. The registered office of the Filer is located at 130 Adelaide Street West, 17th Floor, Toronto, Ontario.

3. The Filer is registered as an investment fund manager, portfolio manager and an exempt market dealer under the Securities Act (Ontario) (the OSA).

4. The Filer is the trustee and manager of the Fund.

5. The Filer is not in default of securities legislation in any of the Jurisdictions.

The Fund

6. The Fund will be a reporting issuer under the laws of all of the Jurisdictions.

7. The Fund filed a preliminary simplified prospectus (the Preliminary SP) and preliminary annual information form (the Preliminary AIF) dated July 25, 2018 with the securities regulatory authorities in each of the Jurisdictions to qualify the issuance of its ETF Units and Class F mutual fund units (collectively, the Units) in each of the Jurisdictions on a continuous basis.

8. The Fund is not in default of securities legislation in any of the Jurisdictions.

Investment Objectives, Investment Strategies and Investment Restrictions

9. The investment objective of the Fund is to buy and hold substantially all of its assets in Bullion and, incidental thereto, minor amounts of gold certificates, if any. The Fund is not actively managed and does not anticipate making regular distributions.

10. The Fund invests in and holds substantially all of its assets in long-term holdings of Bullion in order to provide investors with a secure, convenient, low-cost alternative for investors interested in holding an investment in Bullion. The Fund invests in and holds unencumbered Bullion on a long-term basis in 1,000 grams bar sizes (but may also hold 100 or 400 troy ounce international bar sizes), and does not speculate with regard to short-term changes in gold prices.

Appointment of the Mint as Custodian of the Fund’s Bullion

11. CIBC Mellon Trust Company (CIBC Mellon) acts as custodian of the Fund’s assets other than Bullion pursuant to the terms of a custodian agreement between the Filer, as trustee and manager of the Fund, and CIBC Mellon dated August 8, 2013, as amended which complies with all of the requirements in Part 6 of NI 81-102. CIBC Mellon will only be responsible for the assets of the Fund that are held directly by it, its affiliates or appointed sub-custodians.

12. CIBC Mellon has advised that it is unable to store the Fund’s Bullion as it does not own a vault facility which could accommodate the Fund’s Bullion.

13. The Fund wishes to appoint the Royal Canadian Mint (the Mint) as the custodian of the Fund’s Bullion.

14. Under subsection 6.2 of NI 81-102 the Fund is unable to appoint the Mint as the custodian of the Fund’s Bullion since the Mint is not qualified to act as a “custodian”.

15. The safekeeping of gold bullion is a specialized business in respect of which the Mint has particular specialized knowledge, expertise and experience.

16. The head office of the Mint is located in Ottawa, Ontario.

17. The Mint is not in default of securities legislation is any of the Jurisdictions.

18. The Mint is established pursuant to the Royal Canadian Mint Act (Canada)(the “Act”) and is a Canadian Crown corporation. Pursuant to section 5 of the ct the Mint is an agent of Her Majesty the Queen and, as such, its obligations generally constitute unconditional obligations of the Government of Canada. The Mint is responsible for the minting and distribution of Canada’s circulation coins and foreign circulation coins and numismatic products. As part of its operations, the Mint oerates a gold refinery business and maintains secure storage facilities located in Canada that it owns and operates, and provides storage space to third parties.

19. The Mint had shareholders’ equity of (i) C$128,226,000 as at December 31, 2017, the date of its most recent audited annual financial statements that have been made public, and (ii) C$ 140,974,000 as at June 30, 2018, the date of its most recent interim unaudited financial statements that have been made public, each significantly in excess of the requirement in section 6.2 of NI 81-102.

20. The Filer will negotiate the specific terms and conditions of a precious metals storage and custody agreement (the Storage Agreement) relating to Bullion with the Mint, which provides for the storage of Bullion generally and will not place any limitations on the Fund’s ability to buy or sell Bullion. The Storage Agreement, including the arrangements between the Mint and the Fund in connection with Bullion, will comply with the requirements of Part 6 of NI 81-102.

21. Under the Storage Agreement, upon the initial notice being delivered, the Mint, as custodian of the Fund’s Bullion, will receive Bullion based on a list provided by the Filer in such written notice that specifies the amount, weight, type, assay characteristics and value, and serial number of the London Good Delivery bars. After verification, the Mint will issue a “receipt of deposit” that confirms the bar count and total weight in troy ounces of the Bullion. Pursuant to the Storage Agreement, the Mint will reserve the right to refuse delivery in the event of storage capacity limitations at its own vault facilities. In the event of a discrepancy arising during the verification process, the Mint will promptly notify the Filer. The Mint will keep the Fund’s Bullion fully allocated and specifically identify the Fund’s Bullion as the Fund’s property and will keep it physically segregated at all times. The Mint will provide a monthly inventory statement, which the Filer will reconcile with the Fund’s records of its Bullion holdings. The Filer will have the right to physically count and have the Fund’s auditors subject the Fund’s Bullion to audit procedures at the vault facilities at the Mint upon request on any business day during the Mint’s regular business hours, provided that such physical count or audit procedures do not interrupt the routine operation of the facility and the requisite security procedures have been observed..

22. Upon the Mint’s receipt and taking into possession and control of any of the Fund’s Bullion, whether through physical delivery or a transfer of Bullion from a different customer’s account at the Mint, the Mint’s liability will commence with respect to such Bullion. The Mint will bear all risk of physical loss of, or damage to, the Bullion owned by the Fund in the Mint’s custody (regardless of the location at which the Mint decides to store the Bullion), except in the case of circumstances or causes beyond the Mint’s reasonable control, including, without limitation, acts or omissions or the failure to cooperate of the Filer and/or of third parties, fire or other casualty, act of God, strike, lockout or other labour dispute, riot, war or other violence, or any law, order or requirement of any governmental agency or authority, and has contractually agreed to replace or pay for lost, damaged or destroyed Bullion in the Fund’s account while in the Mint’s care, custody and control. Under the Storage Agreement, the Mint’s liability will terminate with respect to any Bullion upon termination of the Storage Agreement, whether or not the Fund’s Bullion remains in the Mint’s possession and control, upon transfer of such Bullion to a different customer’s account at the Mint or at the time such Bullion is remitted to the armoured transportation service carrier pursuant to delivery instructions provided by the Filer on behalf of a redeeming unitholder.

23. In the event of physical loss, damage or destruction of the Fund’s Bullion in the Mint’s custody, care and control, the Filer must give written notice to the Mint within one business day after the discovery of any such loss, damage or destruction, but, in the case of loss or destruction of the Fund’s Bullion, in any event no more than 30 days after the delivery by the Mint to the Fund of an inventory statement in which the discrepancy first appears. The Mint will, at its discretion, either (i) replace, or restore to its original state in the event of partial damage, as the case may be, the Fund’s Bullion that was lost, destroyed or damaged as soon as practicable after the Mint becomes aware of said loss or destruction, based on the advised weight and assay characteristics provided in the initial notice or (ii) compensate the Fund, through the Filer, for the monetary value of the Fund’s Bullion that was lost or destroyed, within five business days from the date the Mint becomes aware of said loss or destruction, based on the advised weight and assay characteristics provided in the initial notice and the market value of such Bullion that was lost or destroyed, using the first available market price of the Bullion from the date the Mint becomes aware of said loss or destruction. If such notice is not given in accordance with the terms of the Storage Agreement, all claims against the Mint will be deemed to have been waived. In addition, no action, suit or other proceeding to recover any loss, damage or destruction may be brought against the Mint unless notice of such loss, damage or destruction has been given in accordance with the terms of the Storage Agreement and unless such action, suit or proceeding shall have been commenced within 12 months from the time such notice is sent to the Mint. The Mint will not be responsible for any special, incidental, consequential, indirect or punitive losses or damages (including lost profits or lost savings), whether or not the Mint had knowledge that such losses or damages might be incurred.

24. Pursuant to the Storage Agreement, the Mint will be required to exercise the same degree of care, diligence and skill in safeguarding the Fund’s property that a reasonably prudent person acting as custodian of the Bullion would exercise in the circumstance. The Mint will not be entitled to an indemnity from the Fund in the event the Mint breaches its standard of care.

25. The Mint reserves the right to reject Bullion delivered to it if Bullion contains a hazardous substance or if such Bullion is or becomes unsuitable or undesirable for metallurgical, environmental or other reasons.

26. The Filer will be permitted to terminate the custodial relationship with the Mint by giving written notice to the Mint of its intent to terminate the Storage Agreement if: (i) the Mint has committed a material breach of its obligations under the Storage Agreement that is not cured within ten business days following the Filer giving written notice to the Mint of such material breach; (ii) the Mint is dissolved or adjudged bankrupt, or a trustee, receiver or conservator of the Mint or of its property is appointed, or an application for any of the foregoing is filed; or (iii) the Mint is in breach of any representation or warranty contained in the Storage Agreement. The obligations of the Mint include, but are not limited to, maintaining an inventory of the Fund’s Bullion stored with the Mint, providing a monthly inventory to the Fund, maintaining the Fund’s Bullion physically segregated and specifically identified as the Fund’s property, and taking good care, custody and control of the Fund’s Bullion. The Filer believes that all of these obligations are material and anticipates that it would terminate the Storage Agreement if the Mint breaches any such obligation and does not cure such breach within ten business days of the Filer giving written notice to the Mint of such breach. Prior to terminating the custodial relationship with the Mint, the Filer will appoint a replacement custodian for Bullion that complies with the requirements under NI 81-102.

27. The Mint carries such insurance as it deems appropriate for its businesses and its position as custodian of the Fund’s Bullion and will provide the Fund with at least 60 days’ notice of any cancellation or termination of such coverage. The Fund’s ability to recover from the Mint is not contingent upon the Mint’s ability to claim on its own insurance. Based on information provided by the Mint, the Filer believes that the insurance carried by the Mint, together with its status as an agent of Her Majesty pursuant to section 5 of the Act with its obligations generally constituting unconditional obligations of the Government of Canada, provides the Trust with such protection in the event of loss or theft of the Fund’s Bullion stored at the Mint that is consistent with the protection afforded under insurance carried by other custodians that store gold commercially.

28. The Filer will ensure that Bullion, whether held by the Mint, will be subject to a physical count by a representative of the Filer periodically on a spot-inspection basis as well as subject to audit procedures by the Fund’s external auditors on at least an annual basis.

29. The Filer will ensure that no director or officer of the Filer, or representative of the Filer will be authorized to enter into the Bullion storage vaults without being accompanied by at least one representative of the Mint.

30. The Filer will ensure that no part of the Fund’s stored Bullion may be delivered out of safekeeping by the Mint without receipt of an instruction from the Filer in the form specified by the Mint indicating the purpose of the delivery and giving direction with respect to the specific amount.

31. The Filer and the Fund believe that the custodial arrangements with the Mint in connection with the Fund’s Bullion are consistent with industry practice.

32. The Filer will not be responsible for any losses or damages to the Fund arising out of any action or inaction by the Fund’s custodians or any sub-custodian(s) holding the assets of the Fund, including its sub-custodians holding the assets of the Fund other than Bullion, and the Mint holding Bullion owned by the Fund.

33. The Filer will have the authority to change the custodial arrangements described above including, but not limited to, the appointment of a replacement custodian or sub-custodian and/or additional custodians or sub-custodians subject to the requirements under NI 81-102.

34. Paragraphs 2.3(1) (e) and (f) of NI 81-02 provide that a mutual fund must not, except to the extent permitted by paragraphs 2.3(1) (d) and (e), purchase a physical commodity. Paragraph 2.3(1)(e) provides that a mutual fund must not purchase gold or a permitted gold certificate if, immediately after the purchase, more than 10% of its net asset value would be made up of gold and permitted gold certificates. Accordingly, but for the Requested Relief, the Fund would be prohibited from investing in Bullion in accordance with its investment objectives.

35. The Fund’s investment objective provides that the Fund will seek to buy and hold substantially all of its assets in Bullion and, incidental thereto, minor amounts of gold certificates, if any. Accordingly the investment in Bullion is an essential and fundamental aspect of the Fund.

36. The Preliminary SP and Preliminary AIF contain and the final simplified prospectus and final annual information form of the Fund will contain, full, true and plain disclosure regarding the Fund’s investment in Bullion including disclosure regarding the Fund’s concentrated holdings of Bullion. Accordingly, we respectfully submit that potential investors will have sufficient information in order to make an informed investment decision regarding the Fund and its Units. Moreover, we submit that it is likely the case that investors purchasing Units are doing so strictly because of the Fund’s concentrated holdings of Bullion.

37. Subsection 9.4(2) of NI 81-102 provides that a mutual fund may accept as subscription proceeds for its securities either cash or securities.

38. Similar to other exchange-traded funds, the Fund will enter into a designated broker agreement with a Designated Broker the terms of which provide that, for each Prescribed Number of Units issued, a Designated Broker or Dealer must deliver payment consisting of, in the Filer’s discretion: (i) one Basket and cash in an amount sufficient so that the value of the Bullion and the cash received is equal to the Net Asset Value of the Units next determined following the receipt of the subscription order; or (ii) cash in an amount equal to the Net Asset Value of the Units next determined following the receipt of the subscription order in an amount sufficient so that the value of the Bullion and/or cash received is equal to the Net Asset Value of the Units next determined following the receipt of the subscription order. Accordingly, but for the Requested Relief, the Fund would be prohibited from accepting Bullion or a combination of Bullion and cash as payment for its Units as Bullion is not a “security” as defined in the OSA.

39. Unitholders of the Fund may redeem their units on any business day for cash equal to the NAV per unit on the effective date of redemption (a Normal Course Redemption). Redemption proceeds for units redeemed pursuant to a Normal Course Redemption will be paid to unitholders within 2 business days of the effective date of the redemption.

40. Unitholders of the Fund may also redeem their Units on the last business day of each month (each, a Monthly Redemption Date) for physical gold bullion equal to the NAV per Unit on the applicable Monthly Redemption Date provided that the redemption request is for physical gold bullion in an amount equal to at least the equivalent in value to a 1,000 grams international bar or an integrate multiple thereof, plus applicable expenses (a Monthly Redemption). Any fractional amount of redemption proceeds in excess of a 1,000 grams international bar or an integral multiple thereof will be paid in cash.

41. Paragraph 10.4(1)(a) of NI 81-102 provides that a mutual fund must pay the redemption proceeds for securities that are subject to a redemption order within 2 business days after the date of calculation of the NAV per security used in establishing the redemption price.

42. Given the additional logistics required in connection with the delivery of physical gold bullion from the Mint to the redeeming unitholder (i.e. the arrangement for armored transportation of the physical gold bullion), the Fund will require additional time than is permitted by paragraph 10.4(1)(a) of NI 81-102 in order to pay the redemption proceeds to the redeeming unitholder in connection with a Monthly Redemption. But for the Requested Relief the Fund would be unable to provide unitholders with the option to redeem their Units for physical gold bullion as the Fund would be unable to pay the redemption proceeds in connection with a Monthly Redemption within 2 business days as required by paragraph 10.4(1)(a) of NI 81-102.

43. CIBC Mellon has advised that it is unable to store the Fund’s Bullion as it does not own a vault facility which could accommodate the Fund’s Bullion.

44. The safekeeping of gold bullion is a specialized business in respect of which the Mint has particular specialized knowledge, expertise and experience.

45. The Mint’s shareholders’ equity is in excess of the highest minimum capitalization amount of shareholders’ equity required under NI 81-102 for entities qualified to act as a custodian for assets held in Canada.

IV. Decision

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

The decision of the principal regulator under the Legislation is that the Requested Relief is granted, provided that:

(a) the simplified prospectus of the Fund contains disclosure regarding the unique risks associated with an investment in the Fund, including the risk that direct purchases of Bullion by the Fund may generate higher transaction and custody costs than other types of investments, which may impact the performance of the Fund;

(b) redemption proceeds for Units redeemed pursuant to a Monthly Redemption will be paid to the unitholder within 10 business days following the applicable Monthly Redemption Date;

(c) in respect of the relief granted from subsection 9.4(2), the acceptance of any Bullion as payment for the issue price of Units is made in accordance with paragraph 9.4(2)(b);

(d) the simplified prospectus of the Fund discloses, in the investment strategy section that the Fund has obtained relief to invest in Bullion; and

(e) the Mint has in excess of the highest minimum capitalization amount of shareholders’ equity required under NI 81-102 for entities qualified to act as a custodian for assets held in Canada.

“Darren McKall”

Darren McKall, Manager

Investment Funds and Structured Products Branch

Ontario Securities Commission

SEDAR Project #: 2819360