October 16, 2025
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 Fidelity Investments Canada ULC (the Filer), and Fidelity International Low Volatility Equity Institutional Trust
Decision
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of itself and Fidelity International Low Volatility Equity Institutional Trust (the Fund) for a decision under the securities legislation of the Jurisdiction of the principal regulator (Legislation) to request relief from the requirements of sections 2.1, 2.3 and 5.1(2)(a) and (b) of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) (the Requested Relief) which require the Fund to file and deliver annual and interim financial statements to securityholders of the Fund.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator (the Principal Regulator) for this application as the head office of the Filer is located in Ontario, and
(b) the Filer has provided notice that section 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 (the Other Jurisdictions and, together with the Jurisdiction, the Jurisdictions).
Interpretation
Unless expressly defined herein, terms used have the respective meanings given to them in MI 11-102, National Instrument 14-101 Definitions, National Instrument 81-102 Investment Funds and NI 81-106.
Representations
This decision is based on the following facts represented by the Filer:
The Filer
1The Filer is a corporation amalgamated under the laws of Alberta and has its head office in Toronto, Ontario.
2The Filer is registered as an investment fund manager in Ontario, Québec and Newfoundland and Labrador. The Filer is also registered as a portfolio manager, mutual fund dealer and exempt market dealer in each of the Jurisdictions and is registered under the Commodity Futures Act (Ontario) in the category of commodity trading manager.
3The Filer is not in default of securities legislation in any of the Jurisdictions.
The Fund
4The Fund is an investment fund established as a trust under the laws of Ontario.
5The Filer is the investment fund manager, portfolio manager and trustee of the Fund.
6The Fund is not a reporting issuer in any Jurisdiction.
7The Fund is not in default of any of the requirements of securities legislation in the Jurisdictions.
Sole Unitholder Redemption
8The Fund was launched in 2017, and a large Canadian insurance company (the Insurance Company) became the largest unitholder and eventually the sole unitholder. Units of the Fund were utilized by the Insurance Company for a segregated fund on the Insurance Company’s record-keeping platform.
9In the spring of 2025, the Insurance Company notified Fidelity of its intention to fully redeem its units of the Fund, effective July 18, 2025. As the sole unitholder, the Insurance Company’s redemption prompted Fidelity to consider terminating the Fund.
Portfolio Assets
10The Fund purchased certain Russian securities in the period from its launch until March 2022 that were consistent with the Fund’s investment objectives.
11Following the start of the war in Ukraine, the Fund’s Russian securities became subject to sanctions, not only in Canada but globally (the Sanctioned Securities).
12While Canadian law permits the sale of the Sanctioned Securities on the secondary market, there are presently no viable buyers due to the sanctions in other jurisdictions.
13Dealing with the Sanctioned Securities in any other way, and disposing of dividends associated with them, requires a permit from Global Affairs Canada. These permits from Global Affairs Canada are not guaranteed, involve significant legal costs, and typically take several months to obtain. Given the timing constraints of the Insurance Company’s redemption from the Fund, obtaining such a permit was not an option at the time.
Inactive Fund
14As a result of the inability of the Fund to dispose of the Sanctioned Securities, the Filer purchased units of the Fund prior to the Insurance Company’s redemption for the Fund to remain legally constituted as a trust to preserve the Sanctioned Securities in their current custodial account following the Insurance Company’s redemption.
15The Fund was able to dispose of the remaining securities held in the Fund in an orderly fashion prior to July 18, 2025.
16The Fund currently only holds two Sanctioned Securities and associated dividends with a nil market value and is otherwise inactive. The Fund plans to dispose of the Sanctioned Securities as soon as it is feasible to do so.
17The Filer is the sole unitholder of the Fund and plans to terminate the Fund once the Sanctioned Securities are disposed of.
Financial Statement Requirements
18Section 2.11 of NI 81-106 provides an exemption from the filing requirements of sections 2.1 and 2.3 of NI 81-106 for a mutual fund that is not a reporting issuer provided the mutual fund prepares the applicable financial statements and delivers them to its securityholders by the specified filing deadline in accordance with Part 5 of NI 81-106 (the Filing Exemption). To date, the Fund has relied on the Filing Exemption. However, as the Filer is proposing to cease preparing interim and annual financial statements for the Fund for as long as the Fund is inactive and the Filer remains its sole securityholder, the Fund will be unable to continue relying on the Filing Exemption. Accordingly, absent the grant of the Requested Relief, the Filer, on behalf of the Fund, would be required to continue to prepare and deliver to itself, as well as file, the Fund’s annual and interim financial statements.
19The cost of preparing, auditing and formally delivering financial statements to the Filer as the sole unitholder of the Fund would be an unnecessary burden on the Filer for as long as the Fund continues to be inactive.
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 for so long as the Fund retains its current status, including that:
(a) the Filer remains the sole unitholder of the Fund;
(b) the Fund remains a non-reporting issuer;
(c) the Fund holds no portfolio of investments other than the Sanctioned Securities; and
(d) the Fund continues to be inactive.
“Darren McKall”
Darren McKall
Associate Vice President, Investment Management Division
Ontario Securities Commission
Application No. 2025/0552
SEDAR+ #6338997