RBC Global Asset Management Inc. (Re), 2025 CanLII 128977

Ontario Securities Commission

December 11, 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 RBC GLOBAL ASSET MANAGEMENT INC. (the Filer)

AND

THE TOP FUNDS (as defined below)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, which is the manager of certain investment funds managed by the Filer or by an affiliate of the Filer that are reporting issuers subject to NI 81-102 (the Existing Top Funds) and any additional investment funds of which the Filer, or an affiliate of the Filer, may be the manager in the future (the Future Top Funds and together with the Existing Funds, the Top Funds), for a decision under the securities legislation of the Jurisdiction (the Legislation) to revoke and replace the Current Relief (as defined below) (the Revocation) and an exemption, from:

(a) in respect of the Top Funds, the restrictions in the Legislation which prohibit:

(i) 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 securityholder,

(ii) an investment fund from knowingly making an investment in an issuer in which,

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

(B) 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;

(b) in respect of the Top Funds, subsection 2.2(1) (the Control Restriction) of National Instrument 81-102 Investment Funds (NI 81-102) in order to permit each of the Top Funds to purchase a security of an RBC Private Market Fund (as defined below) if immediately after the purchase, the Top Fund would hold securities representing more than 10% of (a) the votes attaching to the outstanding voting securities of the RBC Private Market Fund or (b) the outstanding equity securities of the RBC Private Market Fund (the Control Relief);

(c) in respect of the Top Funds, the prohibition in paragraph 4.1(2) of NI 81-102 against a “dealer managed investment fund” (as defined in NI 81-102) knowingly making an investment in an issuer in which any partner, director, officer or employee of the investment fund’s management company or an affiliate or associate of the investment fund’s management company is a partner, director or officer;

(d) in respect of the Filer and each affiliate of the Filer that is a registered adviser, the prohibition in paragraph 13.5(2)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registration Obligations (NI 31-103) against knowingly causing a Top Fund 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 (this restriction, together with the restrictions described in paragraphs (a) and (c) above are referred to herein as the Investment Fund Conflict of Interest Investment Restrictions), and

(e) in respect of the Filer and each affiliate that acts as manager of a Public Top Fund, the requirement to prepare a report in accordance with the requirements of the Legislation of every transaction by a Public Top Fund involving a purchase of securities from, or sale of securities to, any related person or company (the Investment Fund Conflict of Interest Reporting Requirement);

(a) through (e) above, together with the Revocation, the Requested Relief).

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

(a) the Ontario Securities Commission (the OSC) is the principal regulator for the application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11- 102 Passport System (Ml 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).

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 81-102 have the same meaning if used in this decision, unless otherwise defined.

Current Relief means the decision in respect of the Filer and the Top Funds dated December 11, 2023.

Representations

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

The Filer

1. The Filer is a corporation formed by amalgamation under the federal laws of Canada and its head office is located in Toronto, Ontario.

2. The Filer is an indirect, wholly-owned subsidiary of Royal Bank of Canada.

3. The Filer is registered as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer under the securities legislation of each Jurisdiction, is registered as an investment fund manager in each of British Columbia, Ontario, Québec and Newfoundland and Labrador and is also registered in Ontario as a commodity trading manager.

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

The Top Funds

5. Each Top Fund is, or will be, a reporting issuer in each of the Jurisdictions.

6. Each Top Fund distributes, or will distribute, its securities under a simplified prospectus or long-form prospectus (each, a Prospectus) prepared in accordance with National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) or National Instrument 41-101 General Prospectus Requirements, as applicable (NI 41-101), as the case may be.

7. The securities of each Top Fund are, or will be, qualified for distribution in one or more Jurisdictions.

8. Each Existing Top Fund is not in default of any of the requirements of securities legislation in any of the Jurisdictions.

9. Each Top Fund is, or will be, permitted by NI 81-102 to invest up to 10% of its net assets in illiquid assets, which includes the RBC Private Market Funds. A Top Fund’s investment in securities of the RBC Private Market Funds is, or will be, consistent with its investment objectives. The Prospectus of each Top Fund discloses, or will disclose, in its investment strategies that the Top Fund may invest up to 10% of its net assets directly or indirectly in illiquid assets, measured at the time of investment, including in RBC Private Market Funds.

10. Each Top Fund is, or will be, subject to National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107) and the Filer has established, or will establish, an independent review committee (IRC) to review conflict of interest matters pertaining to the Top Funds as required by NI 81-107.

The RBC Private Market Funds

11. RBC GAM is the asset management division of Royal Bank of Canada (RBC). RBC GAM provides a comprehensive range of investment management services and solutions to individual, high-net-worth and institutional investors through mutual funds, exchange-traded funds, hedge funds and pooled funds, separate accounts and specialty investment strategies.

12. RBC GAM currently manages two open-ended private funds, namely, RBC Canadian Core Real Estate Fund and RBC Global Infrastructure Fund LP (collectively, the Existing RBC Private Market Funds), each of which offer securities on a private placement basis pursuant to an exemption from the prospectus requirement under applicable Canadian securities laws.

13. The Filer, or an affiliate of the Filer, may act as manager to one or more private funds in the future (each, a Future RBC Private Market Fund and together with the Existing RBC Private Market Funds, the RBC Private Market Funds). Each Future RBC Private Market Fund will offer its securities on a private placement basis pursuant to an exemption from the prospectus requirement under applicable Canadian securities laws.

14. Each RBC Private Market Fund provides, or will provide, exposure to private equity, private real estate, private infrastructure, private credit investments or other private alternative investment strategies

15. The RBC Private Market Funds are not, or will not be, subject to NI 81-102, and have not, and will not, prepare a prospectus in accordance with NI 81-101 or NI 41-101.

16. The RBC Private Market Funds are not, and will not be, reporting issuers in any of the Jurisdictions or listed on any recognized stock exchange.

17. No RBC Private Market Fund is, or will be, an “investment fund” pursuant to the securities legislation of the Jurisdictions.

18. The RBC Private Market Funds are, or will be, sold only to investors who qualify to invest in the RBC Private Market Funds pursuant to an exemption from the prospectus requirement under applicable Canadian securities laws.

19. The Existing RBC Private Market Funds are not in default of the securities legislation of any of the Jurisdictions.

20. The RBC Private Market Funds are, or will be, held by accredited investors who are affiliated with the Filer as well as accredited investors that are not affiliated with the Filer.

21. There is no, and it is not expected that there will be, an established, publicly available secondary market for securities of the RBC Private Market Funds and the redemption rights applicable to investors in the RBC Private Market Funds are, or will be, more limited than those applicable to mutual funds subject to NI 81-102. Accordingly, investors in the RBC Private Market Funds may not be able to readily dispose of their securities in an RBC Private Market Fund and any securities that a Top Fund holds in an RBC Private Market Fund is, or will be, considered an “illiquid asset” under NI 81-102.

22. The value of the portfolio assets of each of the Existing RBC Private Market Funds (held directly or indirectly) is determined by the Filer using appraisals (which are consistent with (a) relevant international standards and principles, namely the International Private Equity and Venture Capital Valuation Guidelines, International Valuation Standards set out by the International Valuation Standards Council, and/or IFRS, (b) Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) as defined and revised by the Appraisal Institute of Canada) or (c) any other industry standard for valuations, as applicable) by, in the case of RBC Canadian Core Real Estate Fund, the fund’s asset manager and in the case of RBC Global Infrastructure Fund LP, using industry-wide recognized valuation methodologies, and in both instances, the valuation of each asset held by the Existing RBC Private Market Fund is externally appraised and/or verified by an independent third-party valuation firm at least once every 12 months.

23. On an annual basis the financial statements of each RBC Private Market Fund, are, or will be, audited by the RBC Private Market Fund’s external auditors, being an internationally recognized independent accounting and audit firm (typically PricewaterhouseCoopers LLP (Canada), Ernst & Young LLP, KPMG LLP or Deloitte LLP), as part of their annual independent audit. The applicable audit firm also audits the controls and processes in place to ensure the RBC Private Market Fund’s portfolio investments are accurately valued in accordance with the RBC Private Market Fund’s valuation policy.

24. The assets of each Future RBC Private Market Fund will be appraised and/or verified by an independent third-party valuation firm at least once every 12 months.

Reasons for Requested Relief

25. Absent the Requested Relief, a Top Fund would be prohibited by subsection 2.2(1)(a) of NI 81-102 from investing in an RBC Private Market Fund beyond the confines of the Control Restriction. Due to the expected size disparity between the Top Funds and the RBC Private Market Funds, with the Top Funds expected be significantly larger than the RBC Private Market Funds, it is likely that a relatively small investment, on a percentage of net asset value basis, by a relatively larger Top Fund in an RBC Private Market Fund could result in such Top Fund holding securities representing more than 10 percent (10%) of (a) the votes attaching to the outstanding voting securities of the RBC Private Market Fund or (b) the outstanding equity securities of the RBC Private Market Fund, contrary to the Control Restriction.

26. A Top Fund will not invest in any RBC Private Market Fund for the purpose of exercising control over, or management of, the RBC Private Market Fund. The securities of each RBC Private Market Fund that would be held by the Top Funds do not, and will not, provide a Top Fund with any right to (a) appoint directors or observers to any board of the applicable RBC Private Market Fund or its manager, (b) restrict management of any RBC Private Market Fund or be involved in the decision-making with respect to the investments made by the applicable RBC Private Market Fund or (c) restrict the transfer of securities of the applicable RBC Private Market Fund by other investors in the RBC Private Market Fund. Any voting rights associated with the securities of the RBC Private Market Funds that would be held by the Top Funds do not, and will not, provide a Top Fund with any right to approve, or otherwise participate in the decision-making process associated with the investments made by the RBC Private Market Funds.

27. The Top Funds will not have any look-through rights with respect to the individual portfolio investments held by any of the RBC Private Market Funds. Further, the Top Funds will not have any rights to, or responsibility for, administering any of the portfolio investments held by any of the RBC Private Market Funds.

28. Each RBC Private Market Fund is expected to have, following the completion of its initial investment period, certain diversification requirements which may include limiting the indirect exposure of the Top Funds to any single underlying portfolio company, asset class, sector or geography, as the case may be.

29. The Filer believes that a meaningful allocation to private markets investments will provide the Top Funds’ investors with unique diversification opportunities and represents an appropriate investment tool for the Top Funds that has not been widely available in the past. Private equity, private real estate, private infrastructure, private credit investments and other private alternative investment strategies have historically performed well in down markets; the Filer believes that permitting a Top Fund to increase its allocation to such strategies, offers the potential to improve a Top Fund’s risk adjusted returns.

30. The Filer believes that an optimal way to access such investment strategies is through investments in the RBC Private Market Funds. Investing in the RBC Private Market Funds will provide the Top Funds with access to investments in these strategies that the Top Funds would not otherwise have exposure to through portfolios diversified across different strategies, industry sectors and geographies constructed by the Filer’s experienced investment professionals.

31. A Top Fund’s investment in an RBC Private Market Fund will be disclosed to investors in that Top Fund’s quarterly portfolio holding reports, financial statements and fund facts or ETF facts documents, as applicable.

32. Where an investment is made by a Top Fund in an RBC Private Market Fund, the annual and interim management reports of fund performance for the Top Fund will disclose the name of the related person in which an investment is made, being an RBC Private Market Fund.

33. Where an investment is made by a Top Fund in an RBC Private Market Fund, the records of portfolio transactions maintained by the Top Fund will include, separately for every portfolio transaction effected for the Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being an RBC Private Market Fund.

34. Investments in the RBC Private Market Funds are considered illiquid investments under NI 81-102 and are therefore included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 for the Top Funds. Furthermore, the Filer has its own liquidity policy and manages, or will manage, the Top Funds’ liquidity prudently under these policies.

35. The manager of the Top Funds will request approval from the IRC of the Top Funds to permit the investment of the Top Funds in the RBC Private Market Funds, including by way of standing instructions. No such investments will be made by a Top Fund until the IRC of the Top Fund provides its approvals under section 5.2 of NI 81-107. The manager of the Top Funds will comply with section 5.1 of NI 81-107 and section 5.4 of NI 81-107 for any standing instructions the IRC provides in connection with the investment by a Top Fund in one or more RBC Private Market Funds. If the IRC becomes aware of an instance where the manager of the Top Fund did not comply with the terms of any decision evidencing the Exemption Sought, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Top Fund is organized.

36. Investments by a Top Fund in the RBC Private Market Funds do not, or will not, qualify for the exemption from the Control Restriction in paragraph 2.2(1.1)(a) of NI 81-102 as the RBC Private Market Funds are not, or will not be, “investment funds” subject to NI 81-102.

37. A partner, director, officer or employee of a portfolio manager of a Top Fund, or a partner, director, officer or employee of an associate or an affiliate of a portfolio manager of a Top Fund, may also be a partner, director or officer of an RBC Private Market Fund. Consequently, as a Top Fund may be a “dealer managed investment fund”, the restrictions in subsection 4.1(2) of NI 81-102 may apply to an investment by a Top Fund in an RBC Private Market Fund.

38. Since the RBC Private Market Funds are not reporting issuers subject to NI 81-102 and are not “investment funds” pursuant to the Legislation, the Top Funds are unable to rely on the codified exemptions from the Investment Fund Conflict of Interest Investment Restrictions and Investment Fund Conflict of Interest Reporting Requirement in subsections 2.5(7) and 2.5.1(2) of NI 81-102 for investments by public and private investment funds in securities of other investment funds.

39. Subsection 6.2(3) of NI 81-107 provides an exemption for investment funds (including investment funds that are not reporting issuers) from the Investment Fund Conflict of Interest Investment Restrictions for purchases of related issuer securities if the purchase is made on an exchange. However, the exemption in subsection 6.2(3) of NI 81-107 does not apply to purchases of non-exchange-traded securities and therefore does not apply to purchases of securities of an RBC Private Market Fund by a Top Fund.

40. Each Public Top Fund that is a “dealer managed investment fund” would be prohibited by the Investment Fund Conflict of Interest Investment Restrictions from knowingly making an investment in an RBC Private Market Fund in which any partner, director, officer or employee of the Public Top Fund’s management company or an affiliate or associate of the Public Top Fund’s management company is a partner, director or officer.

41. The Filer or an affiliate of the Filer acting as portfolio manager of a Top Fund would be prohibited by the Investment Fund Conflict of Interest Investment Restrictions from causing the Top Fund to invest in securities of an RBC Private Market Fund without disclosing this fact and obtaining the written consent of each investor in the Top Fund before the purchase.

42. The Filer, or an affiliate of the Filer acting as the management company (as defined in the Act) of the Public Top Funds would be required by the Investment Fund Conflict of Interest Reporting Requirement to file a report of every transaction of purchase or sale of securities between the Public Top Funds and an RBC Private Market Fund within 30 days after the end of the month in which such purchase or sale occurs.

43. It would be costly and time-consuming for the Public Top Funds to comply with the Investment Fund Conflict of Interest Reporting Requirement.

44. A Top Fund’s investment in an RBC Private Market Fund will represent the business judgment of a responsible person uninfluenced by considerations other than the best interests of the Top Fund.

45. The Filer believes that granting the Requested Relief is in the best interests of the Top Funds as it would provide the Top Funds with more flexibility to increase their allocation to the private markets.

Current Relief

46. The Control Relief was previously granted to the Filer, on the terms and conditions provided for in the Current Relief. The Filer wishes to revoke the Current Relief and replace it with this decision in order to (a) expand the definition of Top Funds to include additional investment funds that are, or will be, managed by the Filer or an affiliate, (b) include the additional relief outlined in paragraphs (a), (c), (d) and (e) under the subheading “Background” above and (c) update the conditions relating to the Control Relief to align with the terms and conditions contained in similar relief which has more recently granted by the OSC.

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:

(a) the Revocation is granted; and

(b) the Requested Relief is granted provided that:

(i) no Top Fund is actively participating or will actively participate in the business or operations of any RBC Private Market Fund;

(ii) the securities of an RBC Private Market Fund purchased and held by a Top Fund will be non-voting and will not to provide the Top Fund with any right to (a) appoint directors or observers to any board of the RBC Private Market Fund or its manager, (b) restrict management of the RBC Private Market Fund or be involved in the decision-making with respect to the investments made by the RBC Private Market Fund or (c) restrict the transfer of securities of the RBC Private Market Fund by other investors in the RBC Private Market Fund;

(iii) no Top Fund will have any (a) look-through rights with respect to the individual portfolio investments held by an RBC Private Market Fund or (b) rights to, or responsibility for, administering any of the portfolio investments held by an RBC Private Market Fund;

(iv) each Top Fund is, or will be, treated as an arm’s-length investor in each RBC Private Market Fund in which it invests, on the same terms as all other third-party investors;

(v) where an investment is made by a Top Fund in an RBC Private Market Fund, the records of portfolio transactions maintained by the Top Fund include, separately for every portfolio transaction effected for a Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being the RBC Private Market Fund;

(vi) investments in the RBC Private Market Funds are considered illiquid investments under NI 81-102 and therefore are not permitted to exceed, in aggregate, 10% of the net asset value of the Top Fund;

(vii) in respect of an investment by a Top Fund in an RBC Private Market Fund, no sales or redemption fees are, or will be, paid as part of the investment in the RBC Private Market Fund;

(viii) in respect of an investment by a Top Fund in an RBC Private Market Fund, no management fees or incentive fees are, or will be, payable by the Top Fund that, to a reasonable person, would duplicate a fee payable by an RBC Private Market Fund for the same service;

(ix) a Top Fund’s investment in an RBC Private Market Fund is, or will be, disclosed to investors in the Top Fund’s quarterly portfolio holdings reports, financial statements and fund facts or ETF facts documents, as applicable;

(x) the IRC of each of the Public Top Funds will review and provide its approval, including by way of standing instructions, prior to the purchase of securities of an RBC Private Market Fund, directly or indirectly, by the Public Top Fund, in accordance with subsection 5.2(2) of NI 81-107;

(xi) the manager of each of the Top Funds complies with section 5.1 of NI 81-107 and the manager and the IRC of the Top Funds will comply with section 5.4 of NI 81-107 for any possible standing instructions concerning an investment by a Top Fund in an RBC Private Market Fund;

(xii) if the IRC becomes aware of an instance where the Filer or an affiliate of the Filer, in its capacity as the manager of a Public Top Fund, did not comply with the terms of this decision, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Public Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Public Top Fund is organized;

(xiii) where an investment is made by a Top Fund in an RBC Private Market Fund, the annual and interim management reports of fund performance for the Top Fund will disclose the name of the related person in which an investment is made, being an RBC Private Market Fund;

(xiv) a Top Fund will not invest in an RBC Private Market Fund unless the net asset value of the RBC Private Market Fund is based on a valuation of portfolio assets of the RBC Private Market Fund that are (A) appraised and/or verified by an independent third-party at least once every 12 months (the “Alternative Valuation Model”) or (B) independently determined or verified by an arm’s length third party as at each valuation date, and in both instances, the RBC Private Market Fund produces annual financial statements that are audited by a qualified auditing firm in accordance with generally accepted accounting principles and made available to the Top Fund;

(xv) total capital contributed to an RBC Private Market Fund that determines its net asset value based on the Alternative Valuation Model, by a Top Fund, collectively with related investment funds and affiliates or associates of the Filer, does not represent, as at the time of investment, more than 50% of all contributed capital to the RBC Private Market Fund, if the RBC Private Market Fund is structured as a limited partnership or 50% of all outstanding units or shares of the RBC Private Market Fund if the RBC Private Market Fund is structured as a trust or a corporation, as applicable; and

(xvi) the Prospectus of a Top Fund discloses, or will disclose, in the next renewal or amendment thereto following the date of this decision, the fact that the Top Fund may invest in one or more RBC Private Market Funds, which are investment vehicles managed by the Filer or an affiliate, the potential conflict of interest that arises from these investments and how it is mitigated or avoided, and the approximate or maximum percentage of the net asset value of the Top Fund that is intended to be invested in securities of the RBC Private Market Funds.

“Darren McKall”

Darren McKall

Associate Vice President, Investment Management Division

Ontario Securities Commission

Application #2025/0453

SEDAR+ File#6311541