Northwest & Ethical Investments L.P. (Re), 2024 CanLII 81123

August 29, 2024

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 & ETHICAL INVESTMENTS L.P.

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of existing and future investment funds that are or will be managed by the Filer or an affiliate of the Filer (the Funds), for a decision under the securities legislation of the principal regulator that grants relief to the Funds from:

(a) subsections 2.5(2)(a), 2.5(2)(a.1) and 2.5(2)(c) of National Instrument 81-102 Investment Funds (NI 81-102) to permit the Funds to purchase and/or hold securities of existing exchange-traded funds (ETFs) that are not index participation units (IPUs) as defined in NI 81-102 and whose securities are, or will be, listed for trading on a stock exchange in the United States (U.S. ETFs), even though the U.S. ETFs are not subject to NI 81-102 and are not reporting issuers in any province or territory of Canada (the U.S. ETF Relief);

(b) subsections 2.1(1), 2.2(1), 2.5(2)(a), 2.5(2)(a.1) and 2.5(2)(c) of NI 81-102 to permit the Funds to purchase and/or hold securities of any existing or future ETF that, but for the fact that it is listed on the London Stock Exchange (LSE) and not on a stock exchange in Canada or the U.S., would otherwise qualify as an IPU as defined in NI 81-102 (each, a Foreign IPU);

(c) subsection 2.5(2)(b) of NI 81-102 to allow the Funds to invest in other Funds which may invest more than 10% of the market value of their net assets in Foreign IPUs (together, with paragraph (b) above, the Foreign IPU Relief); and

(d) subsection 2.5(2)(a), 2.5(2)(a.1) and 2.5(2)(c) of NI 81-102 to permit the Funds to purchase and/or hold securities of investment funds authorized as Undertaking for Collective Investment in Transferable Securities (UCITS) under the UCITS Regulations (as defined below) and subject to the supervision of a national competent authority in the United Kingdom (U.K.), the Republic of Ireland, Germany and/or Luxembourg even though the UCITS are not subject to NI 81-102 and are not reporting issuers in any of the Jurisdictions (the UCITS Relief and together with paragraphs (a) through (c) above, 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 each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).

Interpretation

Unless otherwise defined, terms in this decision have the respective meanings given to them in NI 81-102, National Instrument 14-101 Definitions, and MI 11-102.

Representations

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

The Filer

1. The 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 Toronto, Ontario.

2. The 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.

3. The Filer, or an affiliate of the Filer, is or will be, the manager of each of the Funds.

4. Neither the Filer nor the existing Funds are in default of securities legislation in any of the Jurisdictions.

The Funds

5. Each Fund is, or will be, established under the laws of Ontario or Canada as a mutual fund that is a trust or a class of shares of a mutual fund corporation and is, or will be, a reporting issuer in one or more of the Jurisdictions.

6. The securities of the Funds are, or will be, qualified for distribution in one or more of the Jurisdictions pursuant to a simplified prospectus, as applicable, and fund facts documents prepared and filed in accordance with the securities legislation of such Jurisdictions.

7. Each Fund is, or will be, a mutual fund to which the requirements of NI 81-102 apply, subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities.

8. The Funds may, from time to time, wish to invest in U.S. ETFs, Foreign IPUs, and/or UCITS (collectively, the Underlying Funds).

U.S. ETF Relief

9. Each U.S. ETF is, or will be, an "investment fund" and "mutual fund" within the meaning of applicable Canadian securities legislation.

10. Each U.S. ETF

a. is not, or will not be, an IPU as defined in NI 81-102 because the purpose of the U.S. ETF will not be to:

i. hold the securities that are included in a specified widely quoted market index in substantially the same proportion as those securities are reflected in that index; or

ii. invest in a manner that causes the U.S. ETF to replicate the performance of that index;

b. is not, or will not be, subject to NI 81-102; and/or

c. is not, or will not, be a reporting issuer in Canada.

11. The securities of each U.S. ETF trade, or will trade, on a recognized stock exchange in the U.S.

12. Each U.S. ETF is, or will be, managed by an unrelated third party.

13. An investment in each U.S. ETF by a Fund will otherwise comply with section 2.5 of NI 81-102, including that:

a. No U.S. ETF holds, or will hold, more than 10% of its net asset value (NAV) in securities of another investment fund, unless the U.S. ETF:

i. is a clone fund, as defined in NI 81-102; or

ii. in accordance with NI 81-102, purchases or holds securities:

1. of a money market fund, as defined in NI 81-102; or

2. that are IPUs issued by an investment fund.

b. There will be no duplication of management fees or incentive fees as a result of an investment by a Fund in a U.S. ETF.

14. Each U.S. ETF is, or will be, an investment company subject to the U.S. Investment Company Act of 1940 (the Investment Company Act) in good standing with the U.S. Securities and Exchange Commission (the SEC).

Reasons for the U.S. ETF Relief

15. Absent the U.S. ETF Relief, an investment by a Fund in each U.S. ETF would:

(a) be prohibited by paragraphs 2.5(2)(a) or (a.1) of NI 81-102, as applicable, because such U.S. ETF may not be subject to NI 81-102;

(b) be prohibited by paragraph 2.5(2)(c) of NI 81-102 because such U.S. ETF may not be a reporting issuer in any Canadian Jurisdiction; and

(c) not qualify for the exemption in paragraph 2.5(3)(a) of NI 81-102 because the securities of the U.S. ETF are not IPUs as per NI 81-102.

16. The key benefits of a Fund investing in each U.S. ETF may be greater choices, improved portfolio diversification and enhanced returns. For example:

(a) an investment in each U.S. ETF may provide the Funds with access to specialized knowledge, expertise and/or analytical resources of the investment adviser to each U.S. ETF;

(b) each U.S. ETF may potentially provide a better risk profile, increased diversification and improved liquidity/tradability than direct holdings of asset classes to which each U.S. ETF provides exposure, which may improve a Fund's overall risk/reward profile; and

(c) the investment strategies of each U.S. ETF may offer significantly broader exposure to asset classes, sectors and markets than those available in the existing Canadian ETF market.

17. An investment in a U.S. ETF by a Fund is an efficient and cost-effective alternative to obtaining exposure to securities held by the U.S. ETF rather than purchasing those securities directly by the Fund.

18. An investment by a Fund in securities of a U.S. ETF represents, or will represent, the business judgement of responsible persons uninfluenced by considerations other than the best interests of that Fund.

Foreign IPU Relief

19. Each Foreign IPU is, or will be, an "investment fund" and "mutual fund" within the meaning of applicable Canadian securities legislation.

20. The managers of the Foreign IPUs are subject to substantially equivalent regulatory oversight to the Filer, which is primarily regulated by the Ontario Securities Commission.

21. The securities of each Foreign IPU are, or will be, offered in their primary market in a manner similar to the Funds pursuant to a prospectus for each investment company.

22. Each Foreign IPU is listed on the LSE and, in addition, may be listed on one or more additional stock exchanges.

23. The securities of each Foreign IPU would be IPUs but for the fact that they are not traded on a stock exchange in Canada or the United States.

24. It is the Filer's understanding that the regulatory regime, administration, operation, investment objectives and restrictions applicable to the Foreign IPUs are as rigorous as those applicable to similar IPUs listed on an exchange in Canada or the United States.

25. The LSE is subject to a regulatory oversight by the Financial Conduct Authority of the United Kingdom. The LSE is subject to materially equivalent regulatory oversight to securities exchanges in Canada and the United States, and the listing requirements to be complied with by the Foreign IPUs are consistent with the listing requirements of the Toronto Stock Exchange.

26. Each Foreign IPU is, or will be, managed by an unrelated third party.

27. Each Foreign IPU's only purpose is, or will be, to

a. hold the securities that are included in a specified index in substantially the same proportion as those securities are reflected in that index, or

b. invest in a manner that causes the Foreign IPU to replicate the performance of that index.

28. In replicating the performance of an index, a Foreign IPU may purchase securities of other mutual funds.

29. Each Foreign IPU achieves, or will achieve, its investment objective by holding the component securities of the applicable index or otherwise investing in securities in a manner that will enable the Foreign IPU to track the performance of the applicable index in accordance with the rules on eligible assets prescribed by the UCITS Regulations (as defined below) and the applicable regulations of the U.K., the Republic of Ireland, Germany or Luxembourg.

30. The index tracked by each Foreign IPU is, or will be, transparent, in that the methodology for the selection and weighting of index components is, or will be, publicly available. Details of the components of the index tracked by a Foreign IPU, such as issuer name and weighting within the index, are, or will be, publicly available by the applicable index provider and updated from time to time or when requested of the applicable index provider.

31. Each index tracked by each Foreign IPU includes sufficient component securities so as to be broad-based and is, or will be, distributed and referenced sufficiently so as to be broadly utilized.

32. Each Foreign IPU makes, or will make, the NAV of its holdings available to the public through at least one price information system associated with the stock exchange on which it is listed.

33. No Foreign IPU is, or will be, a "synthetic ETF", meaning that no Foreign IPU will principally rely on an investment strategy that makes use of swaps or other derivatives to gain an indirect financial exposure to the return of an index.

34. Each of the Foreign IPUs is, or will be, governed by the laws of the U.K., the Republic of Ireland, Germany or Luxembourg, and is, or will be, subject to the following regulatory requirements and restrictions, which are generally similar to the requirements and restrictions set forth in NI 81-102:

a. each Foreign IPU is subject to a risk management framework through prescribed rules on governance, risk, regulation of service providers and safekeeping of assets;

b. each Foreign IPU is restricted to investments permitted by the UCITS Regulations;

c. each Foreign IPU is restricted to investing a maximum of 10% of its net assets in a single issuer;

d. each Foreign IPU is subject to investment restrictions designed to limit its holdings of illiquid securities to 10% or less of its NAV;

e. each Foreign IPU holds no more than 10% of its NAV in securities of other investment funds, including other collective investment undertakings;

f. each Foreign IPU is subject to investment restrictions designed to limit holdings of transferrable securities which are not listed on a stock exchange or regulated market to 10% or less of the Foreign IPU's NAV;

g. The rules governing the use of derivatives by the Foreign IPUs are, or will be, substantially comparable to the rules regarding the use of derivatives under NI 81-102 with respect to the types of derivatives allowed to be used, issuer concentration, risk exposure in connection with mark to market value, the disclosure required in offering documents and the monitoring requirements;

h. a Foreign IPU may engage in securities lending activities if provided for in its prospectus or prospectus supplement, as applicable for the Foreign IPU;

i. each Foreign IPU makes, or will make, the NAV of its holdings available to the public through at least one price information system (e.g. Bloomberg or Reuters) and all prices are published daily on the Filer's or an affiliate's website, as applicable;

j. each Foreign IPU is required to prepare a prospectus that discloses material facts, similar to the disclosure requirements under Form 41-101F2 Information Required in an Investment Fund Prospectus and Form 81-101F1 Contents of a Simplified Prospectus;

k. each Foreign IPU is required to prepare key investor information documents that provide disclosure that is substantially similar to the disclosure required to be included in the ETF facts document required by Form 41-101F4 Information Required in an ETF Facts Document;

l. each Foreign IPU is subject to continuous disclosure obligations that are similar to the disclosure obligations under National Instrument 81-106 Investment Fund Continuous Disclosure;

m. each Foreign IPU is required to update information of material significance in the prospectus, to prepare management reports and an audited set of financial statements annually; and

n. each Foreign IPU has a board of directors and a manager that are subject to a governance framework that sets out the duty of care and standard of care, which require the board of directors of both the manager and the Foreign IPU to act in the best interest of securityholders of the Foreign IPU;

35. There will be no duplication of management fees or incentive fees as a result of an investment by a Fund in a Foreign IPU.

36. The amount of loss that could result from an investment by a Fund in a Foreign IPU will be limited to the amount invested by the Fund in such Foreign IPU.

Reasons for the Foreign IPU Relief

37. The Filer considers that investments by the Funds in Foreign IPUs provide an efficient and cost-effective means for the Funds to achieve diversification, obtain exposure to the markets and asset classes in which the Foreign IPUs invest and, in the case of certain Foreign IPUs, unique investment exposures. In particular, Foreign IPUs can provide a cost-effective way to achieve the Funds' desired allocations to various sectors, as well as desired exposure to certain countries, which in some cases may not be possible through reliance on ETFs listed on stock exchanges in Canada or the United States alone due to the relative size of the ETFs and/or the makeup of the available ETFs.

38. In the absence of the Foreign IPU Relief:

a. the concentration restriction in subsection 2.1(1) of NI 81-102 would prohibit a Fund from purchasing or holding more than 10% of its net assets in securities of Foreign IPUs and, because IPUs are currently defined to be securities that are traded on a stock exchange in Canada or the United States only, the Fund would not be able to rely upon the IPU exemption set forth in subsection 2.1(2)(d) of NI 81-102;

b. the control restriction in subsection 2.2(1) of NI 81-102 would prohibit a Fund from purchasing or holding securities representing more than 10% of the votes attaching to the outstanding voting securities of a Foreign IPU or from purchasing securities of a Foreign IPU for the purpose of exercising control over or management of the Foreign IPU and, because IPUs are currently defined to be securities that are traded on a stock exchange in Canada or the United States only, the Fund would not be able to rely upon the IPU exemption set forth in subsection 2.2(1.1)(b) of NI 81-102;

c. the investment restriction in paragraphs 2.5(2)(a) and (a.1) of NI 81-102 would prohibit a Fund from purchasing or holding securities of a Foreign IPU because Foreign IPUs are not subject to NI 81-102 and NI 81-101 and, because IPUs are currently defined to be securities that are traded on a stock exchange in Canada or the United States only, the Fund would not be able to rely upon the IPU exemption set forth in subsection 2.5(3)(a) of NI 81-102;

d. the investment restriction in subsection 2.5(2)(b) of NI 81-102 would prohibit a Fund from purchasing or holding securities of a Fund that invests its assets in a Foreign IPU unless at the time of the purchase of that security, the Fund holds no more than 10% of the market value of its net assets in securities of other mutual funds and, because IPUs are currently defined to be securities that are traded on a stock exchange in Canada or the United States only, the Fund would not be able to rely upon the IPU exemption in subsection 2.5(4)(b)(ii) of NI 81-102; and

e. the investment restriction in subsection 2.5(2)(c) of NI 81-102 would prohibit a Fund from purchasing or holding securities of a Foreign IPU because Foreign IPUs are not reporting issuers in the local jurisdiction and, because IPUs are currently defined to be securities that are traded on a stock exchange in Canada or the United States only, the Fund would not be able to rely upon the IPU exemption in subsection 2.5(3)(a) of NI 81-102;

39. An investment by a Fund in securities of a Foreign IPU represents, or will represent, the business judgement of responsible persons uninfluenced by considerations other than the best interests of that Fund.

UCITS Relief

40. Each UCITS is, or will be, managed by an unrelated third party.

41. Each UCITS (a) has, or will have, a primary purpose to invest money provided by its securityholders and (b) has, or will have, securities that entitle its securityholders to receive on demand, or within a specified period after demand, an amount computed by reference to the value of a proportionate interest in the net assets of such UCITS.

42. Each UCITS is, or will be, an "investment fund" and "mutual fund" within the meaning of applicable Canadian securities legislation.

43. No UCITS is, or will be, subject to NI 81-102 and no UCITS distributes, or will distribute, its securities in Canada under a simplified prospectus in accordance with NI 81-101.

44. The UCITS are, or will be, subject to investment restrictions and practices that are generally similar to those applicable to the Funds. The UCITS are, or will be, available for purchase by the public and are not, or will not be, considered to be hedge funds.

45. The UCITS are, or will be, distributed in certain European countries pursuant to:

a. the European Union Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions as amended and supplemented with further European Union (EU) legislation and as implemented in the EU member state where the UCITS is domiciled or Ireland with regards to Irish-domiciled UCITS, Germany with regards to German-domiciled UCITS and Luxembourg with regards to Luxembourg-domiciled UCITS; or

b. with respect to U.K. UCITS, the EU UCITS Regulations as retained in UK law in accordance with the EU (Withdrawal) Act 2018 (together with paragraph a, above, the UCITS Regulations). Each U.K. UCIT therefore is, or will be, a UCITS and will comply with the UCITS Regulations.

46. The UCITS are, or will be, distributed in certain European countries pursuant to MiFID II (together with Regulation (EU) No. 600/2014) and globally where permissible, pursuant to applicable local law (including private placement regimes).

47. Each of the UCITS is, or will be, subject to investment restrictions and practices under the laws of the U.K., the Republic of Ireland, Germany and/or Luxembourg that are applicable to mutual funds that are sold to the general public, and are, or will be, subject to the following regulatory requirements and restrictions, which are generally similar to and as rigorous as the requirements and restrictions set forth in NI 81-102:

(a) each UCITS is subject to a robust risk management framework through prescribed rules on governance, risk, regulation of service providers and safekeeping of assets;

(b) each UCITS is restricted to investing a maximum of 10% of its net assets in a single issuer;

(c) each UCITS is subject to investment restrictions designed to limit its holdings of illiquid securities to 10% or less of its NAV;

(d) each UCITS holds no more than 10% of its NAV in securities of other investment funds, including other collective investment undertakings;

(e) each UCITS is subject to investment restrictions designed to limit holdings of transferrable securities which are not listed on a stock exchange or regulated market to 10% or less of the UCITS' NAV;

(f) the rules governing the use of derivatives by the UCITS are comparable to the rules regarding the use of derivatives under NI 81-102 with respect to the types of derivatives allowed to be used, issuer concentration, risk exposure in connection with mark to market value, the disclosure required in offering documents and the monitoring requirements, and with only a slight difference between the two regimes in connection with counterparty credit ratings (A-1 under NI 81-102 versus an effective rating requirement of A-2 for counterparties which are not regulated as credit institutions under the UCITS Regulations);

(g) a UCITS may engage in securities lending activities if provided for in its prospectus or prospectus supplement, as applicable of the UCITS;

(h) each UCITS makes, or will make, the NAV of its holdings available to the public through at least one price information system (e.g. Bloomberg or Reuters) and all prices are published daily on the Filer's or an affiliate's website, as applicable;

(i) the Filer and/or affiliate of the filer, as applicable, of each UCITS is required to prepare a prospectus that discloses material facts pertaining to each UCITS. The prospectus provides disclosure that is similar to the disclosure required to be included in a simplified prospectus under NI 81-101 and a prospectus under NI 41-101, although some information, such as annual returns, management expense ratios, trading expense ratios, and trading price and volume, is not included in the prospectus and/or prospectus supplement of a UCITS, as applicable;

(j) each UCITS publishes a KIID which contains disclosure similar to that required to be included in a fund facts document prepared under NI 81-101;

(k) each UCITS is subject to continuous disclosure obligations which are similar to the disclosure obligations of the Funds under NI 81-106;

(l) any material change in the investment objective or material change to the investment policy of a UCITS will only be effected either following the written approval of all shareholders of the UCITS or a resolution of a majority of the voting shareholders of that UCITS at a general meeting, or after shareholders are given 30 days notice of the change;

(m) all investment management activities of the investment fund manager for each of the UCITS must be conducted at all times in accordance with the UCITS Regulations and the investment policy of the UCITS; and

(n) the auditor of each of UCITS is required to prepare an audited set of accounts for each UCITS at least annually.

48. There will be no duplication of management fees or incentive fees as a result of an investment by a Fund in a UCITS.

49. The amount of loss that could result from an investment by a Fund in an UCITS will be limited to the amount invested by the Fund in such UCITS.

Reasons for the UCITS Relief

50. A Fund is not permitted to invest in shares of a UCITS unless the requirements of section 2.5(2) of NI 81-102 are satisfied.

51. Section 2.5 of NI 81-102 would permit the Funds to invest in the UCITS but for the fact that each UCITS is not subject to NI 81-102 and is not a reporting issuer in any of the Jurisdictions.

52. Other than the paragraphs of section 2.5 of NI 81-102 from which the Funds seek relief, the Funds will otherwise comply fully with section 2.5 of NI 81-102 when investing in the UCITS.

53. The Filer considers that investments by the Funds in UCITS provide an efficient and cost-effective means for the Funds to achieve diversification, obtain exposure to the markets and asset classes in which the UCITS invest and, in the case of certain UCITS, unique investment exposures. In particular, UCITS can provide a cost-effective way to achieve the Funds' desired allocations to various sectors, as well as desired exposure to certain countries, which in some cases may not be possible through reliance on ETFs listed on stock exchanges in Canada or the United States alone due to the relative size of the ETFs and/or the makeup of the available ETFs.

54. A Fund's investment in shares of a UCITS is not for the purpose of distributing the UCITS to the Canadian public. The investments by a Fund in a UCITS is proposed not to allow the UCITS to be indirectly distributed in Canada, but to allow a Fund to achieve its investment objectives and investment strategies by investing in professionally managed lower-cost mutual funds, where the investment style and approach is known to the manager of the Fund.

55. In the absence of the UCITS Relief the investment restriction in:

a. paragraphs 2.5(2)(a) and 2.5(2)(a.1) of NI 81-102 would prohibit a Fund from purchasing and/or holding shares of a UCITS because the UCITS is not subject to NI 81- 102; and

b. paragraph 2.5(2)(c) of NI 81-102 would prohibit a Fund from purchasing and/or holding shares of a UCITS because the UCITS is not a reporting issuer in a Canadian Jurisdiction.

56. Each investment by a Fund in shares of UCITS will represent the business judgement of responsible persons uninfluenced by considerations other than the best interests of the Fund.

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 provided that:

a. in the case of the U.S. ETF Relief:

i. the investment by a Fund in securities of a U.S. ETF is made in accordance with the fundamental investment objectives of the Fund;

ii. a Fund does not purchase securities of a U.S. ETF if, immediately after the purchase, more than 10% of the NAV of the Fund, in aggregate, taken at market value at the time of the purchase, would consist of securities of U.S. ETFs;

iii. a Fund does not short sell securities of U.S. ETFs;

iv. the securities of each U.S. ETF are listed on a recognized exchange in the United States;

v. each U.S. ETF is, immediately before the purchase by a Fund of securities of that U.S. ETF, an investment company subject to the Investment Company Act in good standing with the SEC;

vi. the prospectus or simplified prospectus, as applicable, of each applicable Fund provides, or will provide, all applicable disclosure mandated for investment funds investing in other investment funds; and

vii. the prospectus or simplified prospectus, as applicable, of each applicable Fund discloses, or will disclose, in the next renewal of its prospectus following the date of this decision, in the investment strategy section, the fact that the Fund has obtained the U.S. ETF Relief to permit investments in U.S. ETFs on the terms described in this decision.

b. in the case of the Foreign IPU Relief:

i. the investment by a Fund in securities of a Foreign IPU is made in accordance with the fundamental investment objectives of the Fund;

ii. the securities each Foreign IPU trade, or will trade, on the London Stock Exchange and are, or will be, subject to the supervision of a national competent authority in the U.K., the Republic of Ireland, Germany and/or Luxembourg;

iii. the securities of each Foreign IPU qualify as IPUs within the meaning of NI 81-102 but for the fact that they are traded on the London Stock Exchange and not a stock exchange in Canada or the United States;

iv. none of the Foreign IPUs are "synthetic ETFs", meaning that they will not principally rely on an investment strategy that makes use of swaps or other derivatives to gain an indirect financial exposure to the return of an index;

v. investments by a Fund in securities of one or more Foreign IPUs comply with NI 81-102 as if securities of the Foreign IPUs were IPUs within the meaning of NI 81-102;

vi. the prospectus or simplified prospectus, as applicable, of each applicable Fund provides, or will provide, all applicable disclosure mandated for investments funds investing in other investment funds;

vii. the prospectus or simplified prospectus, as applicable, of each applicable Fund discloses, or will disclose, in the next renewal of its prospectus following the date of this decision, in the investment strategy section, the fact that the Fund has obtained the Foreign IPU Relief to permit investments in Foreign IPUs on the terms described in this decision;

viii. in the event there is a significant change to the regulatory regime applicable to the Foreign IPUs that results in a less restrictive regulatory regime compared to the current regime and that has a material impact on the management or operation of the Foreign IPUs in which the Funds are invested, the Funds do not acquire any additional securities of such Foreign IPUs, and dispose of any securities of such Foreign IPUs in an orderly and prudent manner; and

ix. the Foreign IPU Relief will terminate six months after the coming into force of any amendments to NI 81-102 that restrict or regulate a Fund's ability to invest in Foreign IPUs.

c. in the case of the UCITS Relief:

i. the investment by a Fund in securities of a UCITS is made in accordance with the fundamental investment objectives of the Fund;

ii. the UCITS qualify as UCITS and are subject to investment restrictions and practices under the laws of that are applicable to mutual funds that are sold to the general public and are regulated investment funds authorized as a UCITS by the applicable national competent authority of the U.K., the Republic of Ireland, Germany, and/or Luxembourg;

iii. the investment by a Fund in a UCITS otherwise complies with section 2.5 of NI 81-102, and the prospectus or a simplified prospectus, as applicable, of the Fund provides, or will provide, all applicable disclosure mandated for investment funds investing in other investment funds;

iv. a Fund does not invest in a UCITS if, immediately after the investment, more than 10% of its net assets, taken at market value at the time of the investment, would consist of investments in UCITS;

v. the prospectus or simplified prospectus, as applicable, of each applicable Fund discloses, or will disclose, in the next renewal of its prospectus following the date of this decision, in the investment strategy section, the fact that the Fund has obtained the UCITS Relief to permit investments in UCITS on the terms described in this decision;.

vi. in the event that there is a change to the regulatory regime applicable to the UCITS that results in a less restrictive regulatory regime compared to the current regime and that has a material impact on the management or operation of the UCITS in which the Funds are invested, the Funds do not acquire additional shares of such Foreign Funds, and dispose of any shares of such UCITS in an orderly and prudent manner; and

vii. the UCITS Relief will terminate six months after the coming into force of any amendments that would permit a fund to invest in the UCITS subject to the provisions of such amendments.

"Darren McKall"

Darren McKall

Manager, Investment Management Division

Ontario Securities Commission

Application #2024/0345

SEDAR Project #6143486