June 15, 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 Northwest and Ethical Investments L.P. (the Filer)
and
In the Matter of the Funds Listed in Schedule A (the Funds)
Decision
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the time limits for the renewal of the simplified prospectus of the Funds dated June 25, 2021 (the Current Prospectus) be extended to the time limits that would apply as if the lapse date was July 30, 2022 (the Exemption Sought).
Under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(i) the Ontario Securities Commission is the principal regulator for this application; and
(ii) 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 each of the other provinces and territories of Canada (together with the Province of Ontario, 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.
Representations
This decision is based on the following facts represented by the Filer:
1The Filer is a limited partnership formed under the laws of Ontario which acts through its general partner Northwest & Ethical Investments Inc., a corporation formed under the laws of Canada, with its head office in Ontario.
2The Filer is registered as (i) a commodity trading manager in Ontario; (ii) a portfolio manager in British Columbia and Ontario; (iii) an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan; and (iv) an investment fund manager in British Columbia, Newfoundland and Labrador, Ontario and Québec.
3The Filer is the investment fund manager of the Funds.
4Each of the Funds is an open-ended mutual fund trust established under the laws of Ontario and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
5Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions.
6The Funds currently distribute securities in the Jurisdictions under the Current Prospectus.
7Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the Current Prospectus is June 25, 2022 (the Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of each of the Funds would have to cease on the Lapse Date unless: (i) the Fund files a pro forma simplified prospectus at least 30 days prior to the Lapse Date, such date being May 26, 2022 (the Pro Forma Filing Deadline); (ii) the final simplified prospectus is filed no later than 10 days after the Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days of the Lapse Date.
8Due to an inadvertent miscalculation of the Pro Forma Filing Deadline, the Filer filed the renewal prospectus for the Funds on May 27, 2022 (the Renewal Prospectus), one day after the Pro Forma Filing Deadline, in each of the Jurisdictions. As a result, without the Exemption Sought, the Filer is required to file and obtain a receipt for the final simplified prospectus for the Funds by the Lapse Date in order for securities of the Funds to continue to be distributed after the Lapse Date.
9CSA Staff Notice 81-334 – ESG-Related Investment Fund Disclosure (the Staff Notice) was published on January 19, 2022 and provides guidance for investment fund issuers in respect of disclosure practices related to environmental, social and governance (ESG) considerations. The first comment letter received from the principal regulator in the Jurisdiction with respect to the Renewal Prospectus included comments with respect to the ESG guidance in the Staff Notice. Given that a significant number of the Funds have an ESG component, the Filer will require additional time to implement the comments in the first comment letter.
10The Filer desires to extend the Lapse Date of the Current Prospectus to July 30, 2022 to allow sufficient time for the Filer to address certain comments raised on the Renewal Prospectus by the principal regulator in the Jurisdiction, and for the Filer to prepare and file all documents for the Funds.
11There have been no material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus and current fund facts documents of the Funds represent current information regarding the Funds.
12Given the disclosure obligations of the Funds, should a material change in the affairs of the Funds occur, the Current Prospectus and current fund facts documents of the Funds will be amended as required under the Legislation.
13The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectus or the fund facts documents of the Funds and will therefore not be prejudicial to the public interest.
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 Exemption Sought is granted.
"Darren McKall"
Darren McKall Investment Funds and Structured Products Ontario Securities Commission
App. No. 2022/0283
Schedule A
LIST OF FUNDS
1 NEI Money Market Fund
2 NEI Canadian Bond Fund
3 NEI Global Impact Bond Fund
4 NEI Global Total Return Bond Fund
5 NEI Global High Yield Bond Fund
6 NEI Conservative Yield Portfolio
7 NEI Balanced Yield Portfolio
8 NEI Global Sustainable Balanced Fund
9 NEI Growth & Income Fund
10 NEI Canadian Dividend Fund
11 NEI Canadian Equity RS Fund
12 NEI Canadian Equity Fund
13 NEI ESG Canadian Enhanced Index Fund
14NEI U.S. Dividend Fund
15NEI U.S. Equity RS Fund
16NEI Canadian Small Cap Equity RS Fund
17NEI Canadian Small Cap Equity Fund
18NEI Global Dividend RS Fund
19NEI Global Value Fund
20NEI Global Equity RS Fund
21NEI Global Growth Fund (formerly NEI Global Equity Fund)
22NEI Environmental Leaders Fund
23NEI International Equity RS Fund
24NEI Emerging Markets Fund
25NEI Select Income RS Portfolio
26NEI Select Income & Growth RS Portfolio
27NEI Select Balanced RS Portfolio
28NEI Select Growth & Income RS Portfolio
29NEI Select Growth RS Portfolio
30NEI Select Maximum Growth RS Portfolio
31NEI Income Private Portfolio
32NEI Income & Growth Private Portfolio
33NEI Balanced Private Portfolio
34NEI Growth Private Portfolio
35NEI Fixed Income Pool
36NEI Canadian Equity Pool
37NEI Global Equity Pool
38NEI Managed Asset Allocation Pool