TD Asset Management Inc. and The Top Funds (Re), 2022 CanLII 115437

November 11, 2022

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

TD ASSET MANAGEMENT INC.

(TDAM)

AND

IN THE MATTER OF THE TOP FUNDS

(AS DEFINED BELOW)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from TDAM on its behalf and on behalf of the Top Funds, as defined below, for a decision under the securities legislation of the Jurisdiction:

1. exempting the Top Funds from the restriction in the Legislation (the Related Issuer Restriction) that prohibits:

(a) an investment fund from knowingly making an investment in a person or company in which the investment fund, alone or together with one or more related investment funds, is a substantial security holder; and

(b) an investment fund from knowingly making an investment in an issuer in which:

(i) any officer or director of the investment fund, its management company or distribution company or an associate of any of them, or

(ii) any person or company who is a substantial security holder of the investment fund, its management company or its distribution company,

has a significant interest; and

(c) an investment fund, its management company or its distribution company from knowingly holding an investment described in paragraph (a) or (b) above (collectively, the Related Issuer Relief); and

2. exempting TDAM and its affiliates, with respect to the Top Funds, from the restriction in the Legislation (the Consent Requirement) that prohibits a registered adviser from knowingly causing an investment portfolio managed by it, including an investment fund for which it acts as adviser, to invest in securities of any issuer in which a responsible person or an associate of a responsible person is a partner, officer or director, unless the fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase (the Consent Requirement Relief and, together with the Related Issuer Relief, the Exemptions Sought);

3. revoking the 2019 Decision (as defined below) in its entirety and replacing it with this decision (the 2019 Decision Revocation); and

4. amending the 2018 Decision (as defined below), such that the portion of the 2018 Decision granting the Non-Investment Fund Related Issuer Relief and the Non-Investment Fund Consent Requirement Relief (each as defined in the 2018 Decision) is revoked and replaced by this decision (the 2018 Decision Partial Revocation, and, together with the Exemptions Sought and the 2019 Decision Revocation, 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 this application; and

(b) TDAM has provided notice under section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) that

(i) the Related Issuer Relief is to be relied upon by TDAM in Alberta and Saskatchewan; and

(ii) the Consent Requirement Relief is to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (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 decision, unless otherwise defined. In addition:

2018 Decision means a decision of the Financial and Consumer Affairs Authority of Saskatchewan dated October 19, 2018 that granted relief to Greystone Managed Investments Inc. and the 2018 Top Funds to, among other things, invest in the Existing Underlying Funds;

2018 Top Funds means each of TD Greystone 2025 Target Date Plus Fund, TD Greystone 2030 Target Date Plus Fund, TD Greystone 2035 Target Date Plus Fund, TD Greystone 2040 Target Date Plus Fund, TD Greystone 2045 Target Date Plus Fund, TD Greystone 2050 Target Date Plus Fund, TD Greystone 2055 Target Date Plus Fund, TD Greystone 2060 Target Date Plus Fund, TD Greystone Retirement Plus Fund and certain other mutual funds managed by TDAM (as successor to Greystone Managed Investments Inc.) or its affiliates, each of which is a mutual fund that is not a reporting issuer;

2019 Decision means a decision of the Ontario Securities Commission dated February 26, 2019 that granted relief to TDAM and the 2019 Top Funds to invest in the Existing Underlying Funds;

2019 Top Funds means each of TD Greystone Real Asset Pooled Fund Trust, TD Greystone Mortgage and Short Bond Pooled Fund Trust and certain other mutual funds managed by TDAM or an affiliate of TDAM, each of which is a mutual fund that is not a reporting issuer;

Existing Top Funds means each of the 2018 Top Funds, the 2019 Top Funds and any other current mutual fund that is not a reporting issuer and that is managed by TDAM or one of its affiliates;

Existing Underlying Funds means each of the Mortgage Fund, the Real Estate Fund and the Infrastructure Fund;

Future Top Funds means any future mutual fund that will not be a reporting issuer and that will be managed by TDAM or one of its affiliates;

Global Real Estate Fund means TD Greystone Global Real Estate Fund (Canada Feeder) L.P.;

Infrastructure Fund means TD Greystone Infrastructure Fund (Canada) L.P. II;

Mortgage Fund means TD Greystone Mortgage Fund;

Real Estate Fund means TD Greystone Real Estate LP Fund;

Top Funds means each of the Existing Top Funds and the Future Top Funds;

Underlying Funds means each of the Existing Underlying Funds and the Global Real Estate Fund.

Representations

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

TDAM

1TDAM is a corporation amalgamated under the Business Corporations Act (Ontario).

2TDAM is a wholly-owned subsidiary of The Toronto-Dominion Bank, a Schedule 1 Canadian chartered bank. TDAM’s head office is located in Toronto, Ontario.

3TDAM is registered in each of the Jurisdictions as an adviser in the category of portfolio manager (PM) and as a dealer in the category of exempt market dealer. TDAM is registered in Ontario, Québec, Newfoundland and Labrador and Saskatchewan in the category of investment fund manager (IFM). TDAM is also registered in Ontario in the category of commodity trading manager and in Québec in the category of derivatives trading manager.

4TDAM is, or will be, the IFM and PM of the Top Funds and TDAM or an affiliate of TDAM is the IFM and PM for the Underlying Funds.

5TDAM or its affiliates therefore are, or will be, “responsible persons” of the Top Funds and the Underlying Funds, as that term is defined in NI 31-103.

6An officer and/or director of TDAM or an affiliate of TDAM may have a “significant interest” (as such term is defined in the Legislation) in an Underlying Fund from time to time. A person or company who is a substantial security holder of a Top Fund, TDAM, or an affiliate of TDAM may also have a significant interest in an Underlying Fund from time to time.

7TDAM is not in default of the securities law of any jurisdiction with respect to the subject matter of this application. However, TDAM has applied for routine exemptive relief to permit certain related party investments made by affiliates or associates of the TDAM that are not directly related to the investments described in this Decision.

The Top Funds

8Each of the Existing Top Funds is a mutual fund established under the laws of the Province of Ontario and is an investment trust established by TDAM. The Existing Top Funds are investment funds as defined in the Legislation. TDAM is the trustee of the 2018 Top Funds and the Canada Trust Company is the trustee of the 2019 Top Funds.

9Each of the Future Top Funds will be a mutual fund organized as an investment trust, limited partnership, or class of shares of a mutual fund corporation established under the laws of the Province of Ontario or one of the Jurisdictions. Either TDAM, an affiliate of TDAM or the Canada Trust Company, may be the trustee of a Future Top Fund organized as a trust or the general partner of a Future Top Fund organized as a limited partnership.

10The Top Funds are not, or will not be, reporting issuers in any of the Jurisdictions. The securities of the Top Funds are, or will be, sold solely to accredited investors pursuant to exemptions from the prospectus requirements in accordance with National Instrument 45-106 Prospectus Exemptions (NI 45-106).

11Each Top Fund is, or will be, permitted to invest in the Underlying Funds in order to achieve its investment objectives and strategies.

The Underlying Funds

Mortgage Fund

12The Mortgage Fund is an investment trust established under the laws of Ontario. The Mortgage Fund is a “mutual fund” as defined in the Legislation. The Mortgage Fund is administered by TDAM, as manager, its assets are managed by a portfolio manager and the trustee of the Mortgage Fund calculates a net asset value (NAV) that is used for purposes of determining the purchase and redemption price of the units of the Mortgage Fund.

13The investment objective of the Mortgage Fund is to provide a vehicle to invest in Canadian commercial real estate mortgages and to achieve superior long-term total returns while maintaining long-term stability of capital. Under its investment strategy, the Mortgage Fund invests in a diversified portfolio of Canadian commercial real estate mortgages and other permissible investments, including first and subsequent priority mortgages, equity investments in Canadian real estate in very limited circumstances, closed or open ended pooled mortgage funds, and securities or bonds where the asset underlying the securities or bonds is a mortgage or other debt security secured by a real property mortgage or charge.

14The Mortgage Fund is not a reporting issuer in any of the Jurisdictions. Units of the Mortgage Fund are sold solely to accredited investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106. Each such investor is responsible for making its own investment decisions regarding its purchases and/or redemptions of units of the Mortgage Fund.

15The Mortgage Fund is not in default of the securities legislation of any of the Jurisdictions.

The Real Estate Fund

16The Real Estate Fund is an investment product established as a limited partnership under the laws of Ontario. The General Partner of the Real Estate Fund is GMI Real Estate Inc., which is an affiliate of TDAM.

17The Real Estate Fund is not considered to be an investment fund under the Legislation. Nevertheless, the Real Estate Fund is operated in a manner similar to how TDAM operates its investment funds. The Real Estate Fund is administered by TDAM, as manager, its assets are managed by a portfolio manager and the custodian of the Real Estate Fund calculates a NAV that is used for purposes of determining the purchase and redemption price of its units.

18The investment objective of the Real Estate Fund is to seek superior long-term total returns by investing in a diversified Canadian real estate portfolio. Under its investment strategy, the Real Estate Fund may invest in equity interests in, and mortgages of, Canadian real estate, securities or bonds where the underlying asset is a mortgage or real estate equity, cash and short-term investments.

19The Real Estate Fund is not a reporting issuer in any of the Jurisdictions. Units of the Real Estate Fund are sold solely to accredited investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106. Each such investor is responsible for making its own investment decisions regarding its purchases and/or redemptions of units of the Real Estate Fund.

20The Real Estate Fund is not in default of the securities legislation of any of the Jurisdictions.

The Infrastructure Fund

21The Infrastructure Fund is an investment product established as a limited partnership under the laws of Ontario. The General Partner of the Infrastructure Fund is Greystone Infrastructure Fund (Canada) Inc., which is an affiliate of TDAM.

22The investment objective of the Infrastructure Fund is to provide sustainable long term returns from infrastructure assets by investing in units of Greystone Infrastructure Fund (Global Master) L.P. (the “Master Infrastructure Fund”), a limited partnership formed under the laws of the Cayman Islands, or such other jurisdiction as TDAM may in the future determine. The investment strategy of the Master Infrastructure Fund is to invest in and to earn income directly or indirectly from infrastructure assets, specifically:

(a) transportation, including roads, rail, ports and airports;

(b) contracted generation;

(c) power transmission and distribution;

(d) renewable energy, including wind, hydro, solar and waste-to-energy;

(e) pipelines, including oil, gas and refined products;

(f) utilities, including water, wastewater and energy;

(g) telecommunications;

(h) social infrastructure, including hospitals, prisons and schools;

(i) rolling stock and parking; and

(j) other assets that are expected to generate predictable cash flows over the long-term and exhibit sustainable competitive advantages.

23The Infrastructure Fund and the Master Infrastructure Fund have substantially similar investment objectives, in that they both seek sustainable long term returns from infrastructure assets.

24The Infrastructure Fund and the Master Infrastructure Fund are not considered to be investment funds under the Legislation. Nevertheless, the Infrastructure Fund and the Master Infrastructure Fund are operated in a manner similar to how TDAM operates its investment funds. The Infrastructure Fund and the Master Infrastructure Fund are administered by TDAM, as manager, their assets are managed by a portfolio manager and the custodian of the Infrastructure Fund and the Master Infrastructure Fund calculates a NAV that is used for purposes of determining the purchase and redemption price of the units of the Infrastructure Fund and the Master Infrastructure Fund, as the case may be.

25The Infrastructure Fund is not a reporting issuer in any of the Jurisdictions. Units of the Infrastructure Fund are sold solely to investment funds managed by TDAM and to the Top Funds, in each case pursuant to an exemption from the prospectus requirements in accordance with NI 45-106. Other investors who wish to obtain exposure to the assets of the Master Infrastructure Fund purchase units of another Canadian infrastructure limited partnership managed by TDAM that has an investment mandate similar to the investment mandate of the Master Infrastructure Fund pursuant to exemptions from the prospectus requirements in accordance with NI 45-106.

26The Infrastructure Fund is not in default of the securities legislation of any of the Jurisdictions.

The Global Real Estate Fund

27The Global Real Estate Fund is an investment product established as a limited partnership under the laws of Ontario. The General Partner of the Global Real Estate Fund is TD Greystone Global Real Estate Fund (Canada Feeder) GP Inc, which is not an affiliate of TDAM.

28The investment objective of the Global Real Estate Fund is to seek consistent long-term total returns by investing in a diversified global real estate portfolio. It seeks to achieve its investment objective by investing in units of the TD Greystone Global Real Estate Fund L.P. (the Master Global Real Estate Fund), a limited partnership formed and existing under the laws of the province of Ontario, or such other jurisdiction as TDAM may in the future determine.

29The investment objective of the Master Global Real Estate Fund is to seek consistent long-term total returns by investing in a diversified global real estate portfolio that follows the risk controls set forth in its offering circular.

30The Global Real Estate Fund and the Master Global Real Estate Fund have the same investment objectives; however, the Global Real Estate Fund will seek to achieve its investment objective by investing 100% of its capital (less amounts reserved for expenses) in the Master Global Real Estate Fund, whereas the Master Global Real Estate Fund will seek to achieve its investment objective by investing directly or indirectly in real estate assets, including by investing substantially more than 10% of its assets in other real estate investment products.

31The Global Real Estate Fund and the Master Global Real Estate Fund are not considered to be investment funds under the Legislation. Nevertheless, the Global Real Estate Fund and the Master Global Real Estate Fund are operated in a manner similar to how TDAM operates its investment funds. The Global Real Estate Fund and the Master Global Real Estate Fund are administered by TDAM, as investment fund manager, their assets are managed by TDAM as portfolio manager and the custodian of the Global Real Estate Fund and the Master Global Real Estate Fund calculates a NAV that is used for purposes of determining the purchase and redemption price of the units of the Global Real Estate Fund and the Master Global Real Estate Fund, as the case may be.

32The Global Real Estate Fund is not a reporting issuer in any of the Jurisdictions. Units of the Global Real Estate Fund are sold solely to accredited investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106. Each such investor is responsible for making its own investment decisions regarding its purchases and/or redemptions of units in the Global Real Estate Fund.

33The Global Real Estate Fund is not in default of the securities legislation of any of the Jurisdictions.

Fund-on-Underlying Funds Structure

34An investment by a Top Fund in one or more of the Underlying Funds will be compatible with the investment objectives of the Top Fund and will allow the Top Fund to obtain exposure to securities in which the Top Fund may otherwise invest directly (the Fund-on-Underlying Funds Structure). TDAM believes that the Fund-on-Underlying Funds Structure provides, or will provide, each Top Fund with an efficient and cost-effective manner of pursuing portfolio diversification instead of purchasing securities directly. The Fund-on-Underlying Funds Structure also provides, or will provide, each Top Fund with access to the investment expertise of the portfolio advisers of one or more Underlying Funds.

35Investments by a Top Fund in one or more of the Underlying Funds is, or will be, effected at an objective price. According to TDAM’s policies and procedures, an objective price, for this purpose, is the NAV of each Underlying Fund.

Top Funds Liquidity

36The Top Funds are or will be valued and redeemable daily, monthly or quarterly.

37At least 50% of the assets held by each Top Fund are, or will be, redeemable at least as frequently as units of the Top Fund are redeemable; the balance of the assets may have more limited liquidity.

Underlying Funds Liquidity

Mortgage Fund Liquidity

38The investments of the Mortgage Fund, which consist primarily of commercial mortgages, are primarily illiquid.

39The Mortgage Fund is priced daily and valued and redeemable monthly.

40The value of the portfolio assets of the Mortgage Fund is independently determined by a party that is arm’s length to TDAM or an affiliate of TDAM, each Underlying Fund and all other investment funds or vehicles managed by TDAM (the MF Independent Valuator) on at least a monthly basis. The Mortgage Fund’s auditor will not act as an MF Independent Valuator. The Mortgage Fund’s NAV is based on the valuation of the portfolio assets determined by the MF Independent Valuator. The valuation process is audited annually by an independent accounting firm.

41A Top Fund will not invest in units of the Mortgage Fund unless, at the time of purchase, at least 20% of the units of the Mortgage Fund are held by unitholders that are not affiliated or associated with TDAM.

Real Estate Fund Liquidity

42The investments of the Real Estate Fund, which consist primarily of interests in real estate, are primarily illiquid.

43The Real Estate Fund is valued and redeemable monthly, although “significant” redemptions (a redemption request that is for greater than $1,000,000 and 10% of the Real Estate Fund’s liquidity available for investment) may only be made on a quarterly basis.

44The value of the portfolio assets of the Real Estate Fund is independently determined by one or more accounting firms and/or appraisal firms accredited through the Appraisal Institute of Canada that is arm’s length to TDAM or an affiliate of TDAM, each Underlying Fund and all other investment funds or vehicles managed by TDAM (the RE Independent Appraiser) on a quarterly basis, which quarterly valuation may be refreshed by the RE Independent Appraiser if TDAM determines that a significant valuation event has occurred. The Real Estate Fund’s auditor will not act as a RE Independent Appraiser. The Real Estate Fund’s NAV is based on the valuation of the portfolio assets determined by the RE Independent Appraiser(s).

45To the extent feasible and practicable, each RE Independent Appraiser will be rotated on three-year intervals.

46A Top Fund will not invest in units of the Real Estate Fund unless, at the time of purchase, at least 20% of the units of the Real Estate Fund are held by unitholders that are not affiliated or associated with TDAM.

Infrastructure Fund Liquidity

47The investments of the Infrastructure Fund consist primarily of units of the Master Infrastructure Fund. The investments of the Master Infrastructure Fund, which consist primarily of infrastructure assets, are primarily illiquid, and the units of both the Infrastructure Fund and the Master Infrastructure Fund have limited liquidity.

48The Infrastructure Fund is valued monthly and redeemable quarterly.

49The Master Infrastructure Fund is valued monthly and redeemable quarterly.

50The value of the portfolio assets of the Master Infrastructure Fund is independently determined by one or more internationally recognized accounting firms and/or appraisal firms that is arm’s length to TDAM or an affiliate of TDAM, each Underlying Fund and all other investment funds or vehicles managed by TDAM (the IF Independent Appraiser) who independently values such portfolio assets on a quarterly basis. A quarterly valuation of one or more of such assets may be refreshed by an IF Independent Appraiser during an interim period if the portfolio adviser of the Master Infrastructure Fund determines that a significant valuation event has occurred. Neither the Infrastructure Fund’s auditor nor the Master Infrastructure Fund’s auditor will act as an IF Independent Appraiser. The Infrastructure Fund invests in the Master Infrastructure Fund at the NAV of the Master Infrastructure Fund, which is based on the valuation prepared by the IF Independent Appraiser.

51To the extent feasible and practicable, the IF Independent Appraiser will be rotated on three-year intervals.

52A Top Fund will not invest in the Infrastructure Fund unless the PM of the Top Fund believes that the liquidity of the Top Fund’s portfolio is adequately managed through other strategies. As part of such strategies, a Top Fund will not invest more than 50% of its NAV, at the time of purchase, in units of the Infrastructure Fund.

53In addition, a Top Fund will not invest in the Infrastructure Fund unless, at the time of purchase, at least 20% of the units of the Master Infrastructure Fund are directly or indirectly held by unitholders that are not affiliated or associated with TDAM (not including any holdings made through the Top Fund).

Global Real Estate Fund Liquidity

54The investments of the Global Real Estate Fund consist primarily of units of the Master Global Real Estate Fund. The investments of the Master Global Real Estate Fund, which consist primarily of direct and indirect interests in real estate, are primarily illiquid, and the units of both the Global Real Estate Fund and the Master Global Real Estate Fund have limited liquidity.

55Each of the Global Real Estate Fund and the Master Global Real Estate Fund is valued daily; though the underlying investments of the Master Global Real Estate Fund may be valued less frequently. Redemptions can be made quarterly and are subject to TDAM’s right to defer redemptions.

56The portfolio of assets held by the Master Global Real Estate Fund may consist of both indirect and direct real estate portfolio assets. The value of any direct real estate portfolio assets of the Master Global Real Estate Fund will be independently determined by one or more internationally recognized accounting firms and/or appraisal firms that are arm’s length to TDAM or an affiliate of TDAM, each Underlying Fund and all other investment funds or vehicles managed by TDAM (the GRE Independent Appraiser) on a quarterly basis, which quarterly valuation may be refreshed by the GRE Independent Appraiser if TDAM determines that a significant valuation event has occurred. The Global Real Estate Fund’s auditor will not act as a GRE Independent Appraiser.

57The value of the indirect real estate portfolio assets of the Master Global Real Estate Fund is recorded by the independent custodian for the Master Global Real Estate Fund, as received from the respective managers of the underlying funds in which the Master Global Real Estate Fund invests. Indirect real estate portfolio assets are generally valued quarterly, though some indirect real estate investments may be valued monthly. The Global Real Estate Fund invests in the Master Global Real Estate Fund at the NAV of the Master Global Real Estate Fund, which is based on the valuation prepared by the GRE Independent Appraiser in respect of the direct real estate portfolio assets and the valuations received from the managers of the underlying funds in respect of the indirect real estate portfolio assets.

58To the extent feasible and practicable, the GRE Independent Appraiser will be rotated on three-year intervals.

59A Top Fund will not invest in units of the Global Real Estate Fund unless, at the time of purchase, at least 20% of the units of the Global Real Estate Fund are held by unitholders that are not affiliated or associated with TDAM.

Necessity for the Exemptions Sought

60The amount invested from time to time in an Underlying Fund by a Top Fund, either alone or together with one or more other Top Funds, may exceed 20% of the outstanding voting securities of such Underlying Fund. As a result, a Top Fund could, either alone or together with one or more other Top Funds, become a substantial security holder of an Underlying Fund. The Top Funds are “related investment funds”, as such term is defined in the Legislation.

61In addition, the Fund-on-Underlying Funds Structure may result in a Top Fund investing in an Underlying Fund in which an officer or director of TDAM or an affiliate of TDAM has a significant interest and/or a Top Fund investing in an Underlying Fund in which a person or company who is a substantial security holder of the Top Fund, TDAM or an affiliate of TDAM has a significant interest.

62The Fund-on-Underlying Funds Structure may also result in a Top Fund investing in an Underlying Fund in which a responsible person or an associate of a responsible person is a partner, officer or director, or performs a similar function or occupies a similar position.

63In the absence of the Related Issuer Relief, each Top Fund would be precluded from purchasing and holding securities of an Underlying Fund due to the investment restrictions contained in the Legislation.

64In the absence of the Consent Requirement Relief, TDAM would be precluded from causing a Top Fund to invest in an Underlying Fund without the consent of each investor in the Top Fund. Requiring TDAM to do so would impose significant and unreasonable burdens of cost and time needed to obtain a written consent to the fund-on-fund structure from each of its clients.

The 2019 Decision Revocation and the 2018 Decision Partial Revocation

65The 2018 Decision among other things, granted relief from the Related Issuer Requirement (the Non-Investment Fund Related Issuer Relief) and the Consent Requirement (the Non-Investment Fund Consent Relief and together with the Non-Investment Fund Related Issuer Relief, the Existing Underlying Fund Relief) to permit Greystone Managed Investments Inc. (which is now amalgamated into TDAM) to cause the 2018 Top Funds to invest only in the Existing Underlying Funds, and does not apply to investments in Global Real Estate Fund.

66The 2019 Decision granted relief from the Related Issuer Restriction and the Consent Requirement to permit TDAM to cause the 2019 Top Funds to invest only in the Existing Underlying Funds and does not apply to investments in Global Real Estate Fund.

67If the Related Issuer Relief and the Consent Requirement Relief is granted, it would also duplicate and supersede the Existing Underlying Fund Relief granted in the 2018 Decision, and the relief granted in the 2019 Decision, making that prior relief redundant.

68The 2019 Decision Revocation and the 2018 Decision Partial Revocation will eliminate this redundancy.

Generally

69None of the Top Funds actively participates or will participate in the business or operations of an Underlying Fund.

70A Top Fund’s investment in an Underlying Fund represents, or will represent, the business judgment of a responsible person uninfluenced by considerations other than the best interests of the Top Fund concerned.

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 securities of the Top Funds and the Underlying Funds are distributed in Canada solely to accredited investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106;

(b) the investment by a Top Fund in an Underlying Fund is compatible with the fundamental investment objectives of the Top Fund;

(c) at the time of the purchase of securities of an Underlying Fund, a Top Fund will not purchase or hold securities of an Underlying Fund, unless either the Underlying Fund holds no more than 10% of its NAV in securities of other investment funds or the Underlying Fund:

(i) has adopted a fundamental investment objective to track the performance of another investment fund or similar investment product;

(ii) purchases or holds securities of investment funds that are “money market funds” (as such term is defined in NI 81-102); or

(iii) purchases or holds securities that are “index participation units” (as such term is defined in NI 81-102) issued by an investment fund;

(d) no management fees or incentive fees are payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by an Underlying Fund for the same service;

(e) no sales fees or redemption fees are payable by a Top Fund in relation to its purchases or redemptions of securities of an Underlying Fund;

(f) the securities of an Underlying Fund held by a Top Fund will not be voted at any meeting of the security holders of the Underlying Fund, except that the Top Fund may arrange for the securities of the Underlying Fund it holds to be voted by the beneficial holders of securities of the Top Fund;

(g) a Top Fund will not invest in units of the Mortgage Fund, the Global Real Estate Fund, the Real Estate Fund or the Infrastructure Fund unless, at the time of purchase, at least 20% of the units of the Mortgage Fund, the Master Global Real Estate Fund, the Real Estate Fund or the Master Infrastructure Fund, as applicable, are held by unitholders that are not affiliated or associated with TDAM (not including any holdings made through the Top Fund);

(h) a Top Fund will not invest more than 50% of its NAV, at the time of purchase, in units of the Infrastructure Fund;

(i) a Top Fund will invest in units of each Underlying Fund at the NAV of the applicable Underlying Fund based on the valuation of the applicable portfolio assets by the MF Independent Valuator, the RE Independent Appraiser, the IF Independent Appraiser or the GRE Independent Appraiser, as applicable.

(j) the statement of investment policies and procedures or other similar document provided or made available to each investor in a Top Fund will disclose

(i) that the Top Fund will purchase securities of one or more Underlying Funds;

(ii) that TDAM is the IFM and PM of the Top Fund and that TDAM or an affiliate of TDAM is the PM of each of the Underlying Funds;

(iii) the approximate or maximum percentage of the NAV of the Top Fund that it is intended be invested in securities of each Underlying Fund;

(iv) the process or criteria used to select the Underlying Funds, if applicable;

(v) that one or more officers, directors or substantial securityholders of TDAM, an affiliate of TDAM or of the Top Fund may have a significant interest in an Underlying Fund, and the potential conflicts of interest which may arise from such relationships;

(vi) the fees and expenses payable by the Underlying Funds that the Top Fund may invest in, including any incentive fee; and

(vii) that securityholders of the Top Fund are entitled to receive from TDAM or an affiliate of TDAM, on request and free of charge, a copy of the offering memorandum or other disclosure document, if any, and the annual and interim financial statements of the Underlying Funds in which the Top Fund invests.