March 13, 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
NINEPOINT PARTNERS LP
(the Filer)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Existing ETF and each of the Future Funds that offer ETF Securities, either alone or along with Mutual Fund Securities (the Future ETFs, and collectively with the Existing ETF, the Funds and each, a Fund) for a decision under the securities legislation of the Jurisdiction (the Legislation) granting exemptive relief that:
(a) exempts the Filer, any affiliate of the Filer, and each the Funds from the requirement in subsection 3.1(2) of National Instrument 41-101 General Prospectus Requirements (NI 41-101) to prepare and file a long form prospectus for the ETF Securities in the form prescribed by Form 41-101F2 Information Required in an Investment Fund Prospectus (Form 41-101F2) provided that the Filer files (i) a prospectus for the ETF Securities in accordance with the provisions of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), other than the requirements pertaining to the filing of Fund Facts; and (ii) ETF Facts in accordance with Part 3B of NI 41-101;
(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 other than the Jurisdiction (the Other Jurisdictions and together with the Jurisdiction, the Jurisdictions).
Interpretation
Terms defined in MI 11-102, NI 81-102 Investment Funds (NI 81-102) and National Instrument 14-101 Definitions have the same meaning if used in this Application, unless otherwise defined.
Affiliate Dealer means a registered dealer that is an affiliate of an Authorized Dealer or Designated Broker and that participates in the re-sale of Creation Units (as defined below) from time to time.
Authorized Dealer means a registered dealer, which may be an affiliate of the Filer, that has entered, or intends to enter, into an agreement with the manager of a Fund authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more Funds on a continuous basis from time to time.
Basket of Securities means, in relation to ETF Securities, a group of securities identified from time to time that collectively reflect the constituents of a portfolio of an ETF.
Designated Broker means a registered dealer, which may be an affiliate of the Filer, that has entered, or intends to enter, into an agreement with the Filer or an affiliate of the Filer on behalf of a Fund to perform certain duties in relation to the ETF Securities of the Fund, including the posting of a liquid two-way market for the trading of the Fund's ETF Securities on the Exchange or another Marketplace.
ETF Facts means an ETF facts document prepared, filed and delivered in accordance with Part 3B of NI 41-101.
ETF Securities means securities of an exchange-traded Fund or of an exchange-traded series of a Fund that are listed or will be listed on the Exchange or another Marketplace and that will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.
ETFs means exchange-traded funds.
Exchange means the Toronto Stock Exchange or Cboe Canada Inc.
Existing ETF means Ninepoint Crypto and AI Leaders ETF.
Form 81-101F1 means Form 81-101F1 Contents of Simplified Prospectus.
Fund Facts means a prescribed summary disclosure document required pursuant to NI 81-101 in respect of one or more classes or series of Mutual Fund Securities being distributed under a prospectus.
Future Fund such other mutual funds that are managed or may be managed by the Filer or an affiliate now or in the future.
Marketplace means a “marketplace” as defined in National Instrument 21-101 Marketplace Operations that is located in Canada.
Mutual Fund Securities means securities of a Fund that are not listed or traded on an exchange and that are or will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.
Prescribed Number of ETF Securities means, in relation to a Fund, the number of ETF Securities of the Fund determined by the Filer or an affiliate from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.
Securityholders means beneficial or registered holders of ETF Securities or Mutual Fund Securities of a Fund, as applicable.
Representations
This decision is based on the following facts represented by the Filer:
The Filer
The Filer is a limited partnership formed and organized under the laws of the Province of Ontario. The general partner of the Filer is Ninepoint Partners GP Inc., a corporation incorporated under the laws of the Province of Ontario. The head office of the Filer is located in Toronto, Ontario.
The Filer is registered under the securities legislation: (i) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador as an adviser in the category of portfolio manager; (ii) in Ontario, Newfoundland and Labrador and Quebec as an investment fund manager; and (iii) in British Columbia, Alberta, Quebec, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador as a dealer in the category of exempt market dealer. The Filer is also registered in Ontario as a commodity trading manager.
The Filer or an affiliate or successor of the Filer is, or will be, the manager of the Funds.
The Filer is not in default of applicable securities legislation in any Jurisdiction.
The Funds
Each Fund is, or will be, an investment fund organized and governed by the laws of a Canadian jurisdiction.
Each Fund is, or will be, governed by the applicable provisions of NI 81-102, subject to any exemptions therefrom that have been, or may in the future be, granted by securities regulatory authorities.
Each Fund is, or will be, a reporting issuer as defined in applicable securities legislation in the Jurisdictions.
The Existing ETF is not in default of applicable securities legislation in any Jurisdiction.
ETF Securities of the Existing ETF are currently qualified for distribution in each of the Jurisdictions under a long-form prospectus dated July 10, 2024, as amended (the Existing ETF Prospectus). The ETF Securities of the Existing ETF are listed, and the ETF Securities of the Future ETFs will be listed, on the Exchange or another Marketplace.
Pursuant to the relief granted in Ninepoint Partners LP (July 21, 2020), the Funds, including, but not limited to, the Existing ETF, have been granted relief from Canadian securities regulatory authorities from subsection 5.1(4) of NI 81-101, which prohibits an investment fund manager from consolidating the prospectus of conventional mutual funds managed by it with the prospectus of “alternative mutual funds” within the meaning of NI 81-102 that are managed by it (the Consolidation Relief).
Pursuant to the relief granted in Ninepoint Partners LP (October 7, 2020), the Funds, including, but not limited to, the Existing ETF, have been granted relief from Canadian securities regulatory authorities to treat the ETF Securities and the Mutual Fund Securities of a Fund as if such securities were two separate funds for the purposes of compliance with the provisions of Parts 9, 10 and 14 of NI 81-102 (the Sales and Redemptions Relief).
The Existing ETF is distributed pursuant to the Existing ETF Prospectus in the form prescribed by Form 41-101F2. The ETF Securities of the Existing ETF are listed on the Exchange.
If the Exemption Sought is granted, it is expected that when the Existing ETF Prospectus is renewed in 2025, the Filer will file a simplified prospectus in the form prescribed by Form 81-101F1 pursuant to which it will continue to offer ETF Securities of the Existing ETF. ETF Facts in the form prescribed by Form 41-101F4 Information Required in an ETF Facts Document (Form 41-101F4) for each class or series of ETF Securities of the Existing ETF will be filed. Fund Facts in the form prescribed by Form 81-101F3 Contents of Fund Facts Document (Form 81-101F3) for each class or series of Mutual Fund Securities of the Existing ETF or of any Future ETF will also be filed.
If the Exemption Sought is granted, it is expected that the Filer will rely on the Consolidation Relief to permit the consolidation of the simplified prospectus for the Existing ETF with the simplified prospectus of other mutual funds managed by the Filer which are not “alternative mutual funds” within the meaning of NI 81-102 and will rely on the Sales and Redemptions Relief in order to comply with Parts 9, 10 and 14 of NI 81-102.
The Filer or an affiliate has applied, or will apply, to list any ETF Securities of each of the Funds that relies on the Exemption Sought on the Exchange or another Marketplace. In the case of a Future ETF, the Filer or an affiliate will not file a final or amended simplified prospectus for any of the Future ETFs in respect of the ETF Securities until the Exchange or other applicable Marketplace has conditionally approved the listing of the ETF Securities.
Any Mutual Fund Securities may or will be subscribed for or purchased directly from the Existing ETF or Future ETF, as applicable, through appropriately registered dealers.
ETF Securities will be distributed on a continuous basis in one or more of the Jurisdictions under a simplified prospectus. ETF Securities may generally only be subscribed for or purchased directly from the Existing ETF and Future ETFs, as applicable (Creation Units) by Authorized Dealers or Designated Brokers. Generally, subscriptions or purchases may only be placed for a Prescribed Number of ETF Securities (or a multiple thereof) on any day when there is a trading session on the Exchange or other Marketplace. Authorized Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of ETF Securities on the Exchange or another Marketplace.
In addition to subscribing for and reselling their Creation Units, Authorized Dealers, Designated Brokers and Affiliate Dealers will also generally be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market.
Except for Authorized Dealer and Designated Broker subscriptions for Creation Units, as described above, ETF Securities generally will not be able to be purchased directly from the Existing ETF or any Future ETF, as applicable. Investors are generally expected to purchase and sell ETF Securities, directly or indirectly, through dealers executing trades through the facilities of the Exchange or another Marketplace. ETF Securities may also be issued directly to Securityholders upon a reinvestment of distributions of income or capital gains.
Securityholders that are not Designated Brokers or Authorized Dealers that wish to dispose of their ETF Securities may generally do so by selling their ETF Securities on the Exchange or other Marketplace, through a registered dealer, subject only to customary brokerage commissions. A Securityholder that holds a Prescribed Number of ETF Securities or multiple thereof may exchange such ETF Securities for a Basket of Securities and/or cash, securities other than a Basket of Securities and/or cash, or cash only, at the discretion of the Filer or an affiliate. Securityholders may also redeem ETF Securities for cash at a redemption price equal to the lesser of 95% of (i) the closing price for the ETF Securities on the Exchange on the effective date of the redemption; and (ii) the net asset value of the ETF Securities on the effective date of redemption.
The Filer believes it is more efficient and expedient to include all classes or series of the Mutual Fund Securities and ETF Securities in one prospectus form instead of two different prospectus forms and that this presentation will assist in providing full, true and plain disclosure of all material facts relating to the securities of such funds by permitting disclosure relating to all classes or series of securities to be included in one prospectus.
The Filer or an affiliate will file ETF Facts in the form prescribed by Form 41-101F4 in respect of each class or series of ETF Securities and will file Fund Facts in the form prescribed by Form 81-101F3 in respect of each class or series of Mutual Fund Securities.
The Filer or an affiliate will ensure that any additional disclosure included in the simplified prospectus relating to the ETF Securities will not interfere with an investor’s ability to differentiate between the Mutual Fund Securities and the ETF Securities and their respective attributes.
The Existing ETF and the Future ETFs will comply with the provisions of NI 81-101 when filing any prospectus or amendment thereto.
The Existing ETF and the Future ETFs will comply with Part 3B of NI 41-101 when preparing, filing and delivering ETF Facts for the ETF Securities of the Existing ETF and the Future ETFs.
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:
- the Filer or an affiliate complies with the following conditions:
(a) the Filer or an affiliate files a simplified prospectus in respect of the ETF Securities in accordance with the requirements of NI 81-101 and Form 81-101F1, other than the requirements pertaining to the filing of a Fund Facts;
(b) the Filer or an affiliate includes disclosure required pursuant to Form 41-101F2 (that is not contemplated by Form 81-101F1) in respect of the ETF Securities in the simplified prospectus of each Fund that relies on the Exemption Sought; and
(c) the Filer or an affiliate includes disclosure regarding the Exemption Sought under the heading “Additional Information” in the simplified prospectus of each Fund that relies on the Exemption Sought.
“Darren McKall”
Darren McKall
Manager, Investment Management Division
Ontario Securities Commission
Application #2025/0115
SEDAR+ #6246270