Harvest Portfolios Group Inc. (Re), 2025 CanLII 139551

September 23, 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

HARVEST PORTFOLIOS GROUP INC.

(the Filer)

AND

IN THE MATTER OF

HARVEST ELI LILLY HIGH INCOME SHARES ETF

HARVEST AMAZON HIGH INCOME SHARES ETF

HARVEST MICROSOFT HIGH INCOME SHARES ETF

HARVEST NVIDIA HIGH INCOME SHARES ETF

(the Harvest ETFs)

HARVEST ELI LILLY ENHANCED HIGH INCOME SHARES ETF

HARVEST AMAZON ENHANCED HIGH INCOME SHARES ETF

HARVEST MICROSOFT ENHANCED HIGH INCOME SHARES ETF

HARVEST NVIDIA ENHANCED HIGH INCOME SHARES ETF

(the Harvest Enhanced ETFs)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of the Harvest ETFs and Harvest Enhanced ETFs (together, the Existing ETFs) and similar future ETFs managed by the Filer (the Future ETFs, collectively with the Existing ETFs, the ETFs) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for

1. the revocation and replacement of the Existing Decision (as defined below) (the Revocation), and

2. an exemption from subsections 2.1(1) and 2.1(1.1) of National Instrument 81-102 Investment Funds (NI 81-102) to permit each ETF to invest in a single Specified Public Issuer (as defined below) in excess of the investment restrictions contained in such subsections, in accordance with its fundamental investment objectives (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 section 4.7(1) of Multilateral Instrument 11-102 – Passport System (MI 11-102) is intended to be relied upon in all of the provinces and territories of Canada other than the Jurisdiction (together with the Jurisdiction, the Canadian Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102, National Instrument 41-101 General Prospectus Requirements (NI 41-101) or in NI 81-102 have the same meaning if used in this decision unless otherwise defined herein:

Designated Broker means a registered dealer that has entered, or intends to enter, into an agreement with the Filer to perform certain duties in relation to the ETF, including the posting of a liquid two-way market for the trading of the ETF Securities on an Exchange or another Marketplace.

ETF Security means an exchange-traded unit or share of an ETF.

Exchange means the Toronto Stock Exchange or Cboe Canada Inc., as applicable.

Existing Decision means the decision in respect of the Filer and the ETFs dated August 8, 2024.

Marketplace means a “marketplace” as defined in National Instrument 21-101 Marketplace Operations that is located in Canada.

NASDAQ means the Nasdaq Global Select Market.

NYSE means the New York Stock Exchange.

Portfolio Securities means, in relation to an ETF, the securities of a Specified Public Issuer in which the ETF invests.

Prospectus means the prospectus of each ETF.

Public Issuer Requirements has the meaning ascribed to such term in the definition of Specified Public Issuer.

Specified Public Issuer means a public company (i) that is both incorporated and headquartered in the US; (ii) that has a market capitalization in excess of US$20 billion on the date that the ETF Securities are listed on an Exchange; (iii) whose Portfolio Securities are listed on the NASDAQ or the NYSE on the day immediately prior to the date that the ETF Securities are listed on an Exchange; and (iv) whose Portfolio Securities have an average daily trading volume in the month before the date that the ETF Securities are listed on an Exchange in excess of US$100 million; (collectively, the Public Issuer Requirements).

US means the United States of America.

Representations

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

The Filer and the ETFs

1. The Filer is a corporation incorporated under the laws of the Province of Ontario, with its head office located at 610 Chartwell Road, Suite 204 in Oakville, Ontario.

2. The Filer is registered as an investment fund manager and portfolio manager in the province of Ontario and as an investment fund manager in the provinces of Newfoundland and Labrador and Québec.

3. The Filer, or an affiliate of the Filer, is or will be the registered investment fund manager and registered portfolio manager of the ETFs. The ETF Securities of the Existing ETFs trade on an Exchange. The Filer will, if applicable, apply to list the ETF Securities of the Future ETFs on an Exchange.

4. The Filer and the Existing ETFs are not in default of securities legislation in any of the Canadian Jurisdictions.

5. Each of the ETFs is or will be an open-ended alternative mutual fund (as defined in NI 81-102).

6. The ETFs are or will be subject to NI 81-102, subject to any exemptions that may be granted by the applicable securities regulatory authorities.

7. The ETF Securities of the Existing ETFs are offered under a long form prospectus dated August 12, 2025, prepared and filed in accordance with NI 41-101. The ETF Securities of the Future ETFs will be offered under a prospectus prepared and filed in accordance with NI 41-101 or National Instrument 81-101 Mutual Fund Prospectus Disclosure, subject to any exemptions that may be granted by the applicable securities regulatory authorities.

8. Each ETF is or will be a reporting issuer under the laws of one or more of the Canadian Jurisdictions.

9. The ETF Securities are or will be (subject to satisfying the original listing requirements of the applicable Exchange) listed on an Exchange.

10. Designated Brokers act, or will act, as intermediaries between investors and the ETFs, performing a market-making function, including by standing in the market with bid and ask prices for the ETF Securities to maintain a liquid market for the ETF Securities. The majority of trading in ETF Securities occurs, or will occur, in the secondary market.

11. The fundamental investment objective of each Harvest ETF and of similar Future ETFs is or will be to seek to provide:

(a) long-term capital appreciation through purchasing and holding Portfolio Securities of a Specified Public Issuer; and

(b) high monthly cash distributions.

12. The fundamental investment objective of each Harvest Enhanced ETF and of similar Future ETFs is or will be to seek to provide:

(a) long-term capital appreciation through purchasing and holding, on a levered basis, Portfolio Securities of a Specified Public Issuer; and

(b) high monthly cash distributions.

13. Specifically, the Portfolio Securities and the Specified Public Issuer for each of the Existing ETFs are as follows:

ETF Name

Portfolio Securities

Specified Public Issuer

Harvest Eli Lilly High Income Shares ETF

Common stock

Eli Lilly and Company

Harvest Amazon High Income Shares ETF

Common stock

Amazon.com, Inc.

Harvest NVIDIA High Income Shares ETF

Common stock

NVIDIA Corporation

Harvest Microsoft High Income Shares ETF

Common stock

Microsoft Corporation

Harvest Eli Lilly Enhanced High Income Shares ETF

Common stock

Eli Lilly and Company

Harvest Amazon Enhanced High Income Shares ETF

Common stock

Amazon.com, Inc.

Harvest NVIDIA Enhanced High Income Shares ETF

Common stock

NVIDIA Corporation

Harvest Microsoft Enhanced Income Shares ETF

Common stock

Microsoft Corporation

14. In order to achieve its investment objectives, each Existing ETF purchases and holds up to 100% of its total assets (including assets acquired with borrowings) in the Portfolio Securities of its respective Specified Public Issuer. The Filer expects to establish Future ETFs with similar investment objectives which will similarly purchase and hold up to 100% of their total assets in the Portfolio Securities of a single Specified Public Issuer which meets the Public Issuer Requirements.

15. Each ETF will use a ticker symbol that the Filer believes is unlikely to be confused with the ticker symbol for the Portfolio Securities and the Specified Public Issuer for the ETF.

16. The distribution of ETF Securities (the Distribution) will be conducted without the knowledge or consent of the Specified Public Issuers and the Filer, as a general matter, will not have direct knowledge or access to material information regarding the Specified Public Issuers or Portfolio Securities other than publicly available information.

Disclosure

17. The Prospectus discloses or will disclose:

(a) the name of each ETF using the convention reflected in this decision for the Existing ETFs;

(b) the investment objective and investment strategy of each ETF as well as the risk factors associated therewith, including concentration risk;

(c) the fact that the ETF has obtained the Exemption Sought to permit the purchase of the Portfolio Securities on the terms described in this decision;

(d) the ways in which, and the extent to which, purchasing and holding the ETF Securities can be expected to be different from directly purchasing and holding the Portfolio Securities and the factors influencing these differences (such as the ETF’s cash-borrowing and option-writing strategies), including in respect of performance, returns and securityholder rights;

(e) that the ETF’s investment in the Portfolio Securities will be a passive investment;

(f) the Filer’s specific policies and procedures for making proxy voting and tender decisions in respect of the Specified Public Issuer and the expected outcomes for the ETF of such decisions in potential scenarios, such as merger or other restructuring of the Specified Public Issuer, a sale of part or all of its business, or bankruptcy of the Specified Public Issuer and other scenarios; and

(g) prominently, a statement substantially similar to the following:

Investors investing, or considering investment, in an ETF (which invests in a single underlying corporate issuer) should consider their ongoing obligations with respect to insider trading, insider reporting, and take-over bids under the Ontario Securities Act (the Act) or other relevant securities legislation and National Instruments and as explained in National Policies. Securities regulators may take the view that these provisions extend to the purchase and sale of securities of ETFs that invest in securities of a single issuer, including on a look-through basis.

For example:

• Under section 76(1) of the Act, individuals or entities in a special relationship with an issuer are prohibited from purchasing or selling securities of that issuer with knowledge of a material fact or material change that has not been generally disclosed. Securities regulators may take the view that this prohibition extends to the purchase and sale of securities of ETFs that invest in securities of a single issuer;

• Securities regulators may take the view that the insider reporting requirements in section 107 of the Act apply in respect of purchases of securities of ETFs that invest in securities of a single issuer; and

• Where ETF units are redeemable for securities of the ETF’s single underlying issuer, securities regulators may consider those ETF units convertible securities under section 1.7 of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104) that count, on a post conversion-basis in respect of the underlying issuer, towards the early warning reporting thresholds in Part 5 of NI 62-104.

Investors are strongly encouraged to seek legal advice or consult with their compliance officers to fully understand their insider trading, insider reporting, and take-over bids obligations and how they relate to investment in these ETFs. Failure to comply with these obligations may result in regulatory scrutiny and enforcement actions. Purchasing a single-issuer ETF is not equivalent to holding the securities of the underlying issuer directly; investors may not have the same rights and may be subject to additional risks, as further referenced in this prospectus.

18. The Prospectus provides or will provide only abbreviated disclosure in respect of the Portfolio Securities and the Specified Public Issuer based on publicly available information.

19. The Filer intends to meet the full, true and plain disclosure requirement of the Legislation in connection with the ETF Securities without having responsibility for the accuracy of disclosure issued by the Specified Public Issuer in respect of the Portfolio Securities. The Prospectus directs or will direct investors to public disclosure made available by the Specified Public Issuer in respect of the Portfolio Securities in accordance with applicable legislation. The Prospectus also clarifies or will clarify that such disclosure and other information made publicly available about the Portfolio Securities and the Specified Public Issuer on the Filer’s website and otherwise cannot be expected to contemplate the Distribution.

20. The Prospectus does or will clearly state that the Filer is not the source of disclosure relating to the Portfolio Securities and the Specified Public Issuer and does or will clearly disclaim the Filer’s responsibility both for verifying the accuracy of such disclosure and for updating such disclosure.

21. To meet the full, true and plain disclosure requirement, the Prospectus does or will disclose that the Specified Public Issuer will not receive a direct or indirect financing benefit from the Distribution.

Reasons for the Exemption Sought

22. The Existing Decision granted relief to the ETFs from the concentration restriction in subsections 2.1(1) and 2.1(1.1) of NI 81-102 subject to, among other conditions, the requirement that, at the time that the ETF Securities are listed on an Exchange, the Specified Public Issuer and its Portfolio Securities satisfy the Public Issuer Requirements, which under the Existing Decision, includes the requirement for the Specified Public Issuer to be listed in the S&P 500 Index, Dow Jones Industrial Average Index and/or the Nasdaq 100® Index (the Existing Index Requirement).

23. The Filer submits that the Existing Index Requirement which forms part of the conditions of the Existing Decision is overly restrictive given the other Public Issuer Requirements that must be met by the Specified Public Issuer (including market capitalization and daily trading volume) and the jurisdiction of incorporation and stock exchange listing requirements already provide a reasonable and transparent screen of key criteria for determining whether particular Portfolio Securities are appropriate for an ETF.

24. The Filer therefore requests the Revocation of the Existing Decision and its replacement with this decision granting the Exemption Sought that includes an amended definition of Specified Public Issuer that eliminates the requirement for the Specified Public Issuer to satisfy the Existing Index Requirement.

25. The Filer submits that the Exemption Sought represents a limited and appropriate expansion of the eligibility criteria to permit the offering of new ETFs where the Portfolio Securities are suitable and appropriate for retail investors but would otherwise be ineligible under the terms of the Existing Decision due to the Existing Index Requirement.

26. The Filer believes that the amended definition of Specified Public Issuer would continue to ensure that principles-based safeguards remain in place.

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 is that:

1. the Revocation is granted; and

2. the Exemption Sought is granted, provided that:

(a) but for the fact that ETF Securities may be subscribed for or redeemed on each trading day (i.e. the ETFs being in continuous distribution), the ETF otherwise meets the definition of "fixed portfolio investment fund" in NI 81-102;

(b) any purchase by the ETF of the Portfolio Securities is in accordance with the investment objectives of the ETF;

(c) at the time that the ETF Securities are listed on an Exchange, the Specified Public Issuer and its Portfolio Securities satisfy the Public Issuer Requirements;

(d) the ETF will not purchase Portfolio Securities if the ETF would, as a result of such purchase, become an insider of the Specified Public Issuer;

(e) the ETF’s prospectus contains the disclosure referred to in representations 17 through 21 above; and

(f) the Filer will not permit the ETFs to be used as a financing vehicle by a Specified Public Issuer or to permit an indirect offering of Portfolio Securities into a Canadian Jurisdiction.

“Darren McKall”

Darren McKall

AVP, Investment Management Division

Ontario Securities Commission

App. No. 2025/0493; SEDAR #6320726