Franklin Templeton Investments Corp. (Re), 2025 CanLII 28350

April 3, 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

FRANKLIN TEMPLETON INVESTMENTS CORP. (the Filer)

AND

THE TOP FUND

(as defined below)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of Franklin Lexington PE Secondaries Fund (the Top Fund), for a decision under the securities legislation of the Jurisdiction (the Legislation), exempting the Top Fund from:

(a) the requirement in section 2.2 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) that the Top Fund file its audited annual financial statements and auditor's report (the Annual Financial Statements) on or before the 90th day after the Top Fund's most recently completed financial year (the Annual Filing Deadline);

(b) the requirement in paragraph 5.1(2)(a) of NI 81-106 that the Top Fund deliver to securityholders its Annual Financial Statements by the Annual Filing Deadline (the Annual Delivery Requirement);

(c) the requirement in section 2.4 of NI 81-106 that the Top Fund file its unaudited interim financial statements (the Interim Financial Statements) on or before the 60th day after the Top Fund's most recently completed interim period (the Interim Filing Deadline); and

(d) the requirement in paragraph 5.1(2)(b) of NI 81-106 that the Top Fund deliver to securityholders its Interim Financial Statements by the Interim Filing Deadline (the Interim Delivery Requirement);

(collectively, 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 (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 each of the other provinces and territories of Canada (the Other Jurisdictions and, together with the Jurisdiction, the Canadian Jurisdictions).

Interpretation

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

Representations

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

The Filer

1. The Filer is a corporation amalgamated under the laws of the Province of Ontario. The Filer’s head office is located in Toronto, Ontario.

2. The Filer is registered as:

(a) an investment fund manager in Alberta, British Columbia, Manitoba, Newfoundland & Labrador, Nova Scotia Ontario and Québec;

(b) a portfolio manager, mutual fund dealer and exempt market dealer in each province of Canada and the Yukon territory; and

(c) a commodity trading manager in Ontario.

3. The Filer is the investment fund manager and portfolio manager of the Top Fund.

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

The Top Fund

5. The Top Fund is a trust formed under the laws of the Province of Ontario.

6. The Top Fund is a mutual fund for purposes of the securities legislation of the Canadian Jurisdictions.

7. Securities of the Top Fund are offered for sale to qualified investors in provinces and territories of Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions (NI 45-106) or equivalent exemptions.

8. The Top Fund is not a reporting issuer in any of the Canadian Jurisdictions.

9. The Top Fund has a financial year end of March 31.

10. The investment objective of the Top Fund is to invest substantially all of its investable assets in shares of Franklin Lexington Private Markets Fund SICAV SA – Franklin Lexington PE Secondaries Fund (the Underlying Fund). The Underlying Fund is organized under the laws of the Grand Duchy of Luxembourg. The Underlying Fund is a sub-fund of Franklin Lexington Private Markets Fund SICAV SA and is part of an umbrella investment program referred to as FLEX. The investment objective of FLEX is to seek long-term capital appreciation and FLEX seeks to achieve this investment objective by investing in a portfolio of private equity and other private assets. The financial year end of the Underlying Fund is March 31.

11. Waystone Management Company (Lux) S.A. (Waystone) is the alternative investment fund manager of the Underlying Fund. In the future, it is intended for Franklin Templeton International Services S.à r.l. (FTIS), a Luxembourg limited liability company (société à responsabilité limitée), to replace Waystone as alternative investment fund manager after the authorization of FTIS by the Luxembourg supervisory authority to perform this function for the Underlying Fund. FTIS is an affiliate of the Filer.

12. The Filer believes that the Top Fund investing in the Underlying Fund offers benefits not available through a direct investment in the companies, other issuers or assets held by the Underlying Fund.

13. Securities of the Top Fund will be typically redeemable at various intervals, as will securities of the Underlying Fund. As the Top Fund has a long-term investment horizon, the Top Fund will be able to manage its own liquidity requirements taking into consideration the frequency at which securities of the Underlying Fund may be redeemed.

14. The net asset value of the Top Fund will be calculated no less frequently than monthly. Securityholders of the Top Fund will be provided with the net asset value of the Top Fund on a no less frequently than monthly basis.

15. The Top Fund’s holdings of securities of the Underlying Fund will be disclosed in the Top Fund’s Annual Financial Statements and Interim Financial Statements.

Financial Statement Filing and Delivery Requirements

16. Section 2.2 and paragraph 5.1(2)(a) of NI 81-106 require the Top Fund to file and deliver its Annual Financial Statements by the Annual Filing Deadline. As the financial year-end for the Top Fund is March 31, the Annual Filing Deadline for the Annual Financial Statements would be June 29.

17. Section 2.4 and paragraph 5.1(2)(b) of NI 81-106 require the Top Fund to file and deliver its Interim Financial Statements by the Interim Filing Deadline. As the Top Fund’s interim period-end is September 30, the Interim Filing Deadline for the Interim Financial Statements would be November 29.

18. Section 2.11 of NI 81-106 provides an exemption from the filing requirements of the Annual Financial Statements and the Interim Financial Statements if, among other things, the Top Fund delivers such statements in accordance with Part 5 of NI 81-106 by the Annual Filing Deadline and the Interim Filing Deadline, as applicable. Subject to the Exemption Sought, the Filer intends to rely on this exemption to not file its Annual Financial Statements and Interim Financial Statements.

19. The Underlying Fund is subject to financial reporting deadlines that extend beyond those applicable to the Top Fund under NI 81-106. The laws of the Grand Duchy of Luxembourg require the audited annual financial statements of the Underlying Fund to be made available within six (6) months of its financial year-end and unaudited semi-annual financial statements to be made available within three (3) months of its most recent semi-annual period.

20. In order to formulate an opinion on the financial statements of the Top Fund, the Top Fund's auditor requires audited financial statements of the Underlying Fund as at the date of the financial year-end of the Top Fund in order to audit the information contained in the Top Fund’s Annual Financial Statements.

21. The Top Fund will not be able to obtain the audited annual financial statements and interim financial reports of the Underlying Fund sooner than other securityholders of the Underlying Fund receive such statements and reports. The Top Fund expects to receive the audited annual financial statements and interim financial reports of the Underlying Fund two to five business days prior to the end of the six- and three-month periods, respectively, that follow the Underlying Fund’s financial year-end and most recent semi-annual period.

22. The auditor of the Top Fund has advised the Filer that they will be unable to complete the audit of the Top Fund’s Annual Financial Statements until the audited financial statements of the Underlying Fund are completed and available to the Top Fund.

23. Absent the Exemption Sought, the Top Fund will be unable to meet each Annual Filing Deadline and Annual Delivery Requirement and each Interim Filing Deadline and Interim Delivery Requirement. The Filer expects this timing delay in the completion of the Top Fund’s Annual Financial Statements and Interim Financial Statements to occur every year for the foreseeable future.

24. The Top Fund therefore seeks an extension of the Annual Filing Deadline and the Annual Delivery Requirement to permit delivery within 183 days of the Top Fund’s most recently completed financial year-end, to enable the Top Fund’s auditors to first receive the audited annual financial statements and auditor’s report of the Underlying Fund so as to be able to prepare the Top Fund’s Annual Financial Statements.

25. The Top Fund seeks an extension of the Interim Filing Deadline and the Interim Delivery Requirement to permit delivery within 92 days of the Top Fund’s most recently completed interim period, to enable the Top Fund to first receive the interim financial reports of the Underlying Fund so as to be able to determine the net asset value of the Underlying Fund and prepare the Top Fund’s Interim Financial Statements.

26. The offering memorandum of the Top Fund that will be provided to investors will disclose that: (i) the Annual Financial Statements for the Top Fund will be delivered to each investor within 183 days of the Top Fund's financial year end; and (ii) the Interim Financial Statements for the Top Fund will be delivered to each investor within 92 days following the end of each interim period of the Top Fund.

27. The Filer will notify securityholders of the Top Fund that it has received, and intends to rely on, relief from the Annual Filing Deadline and Annual Delivery Requirement and the Interim Filing Deadline and the Interim Delivery Requirement.

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 to the Top Fund provided that:

(a) The Top Fund has a financial year ending March 31.

(b) The Top Fund’s investment strategy is to primarily invest the Top Fund’s investable assets directly or indirectly in securities of the Underlying Fund whose investment objective is compatible with the Top Fund's investment objective.

(c) No less than 25% of the total assets of the Top Fund as at its financial year end of March 31 are invested in the Underlying Fund which has a financial year end that corresponds to the Top Fund and is subject to laws of its jurisdiction that requires or permits annual financial statements of the Underlying Fund to be made available within 183 days of its financial year end and interim financial statements of the Underlying Fund to be made available within 92 days of its most recent interim period.

(d) The offering memorandum provided to prospective investors regarding the Top Fund discloses that, subject to regulatory approval:

(i) the Annual Financial Statements for the Top Fund will be delivered on or before the 183^rd day after the Top Fund's most recently completed financial year; and

(ii) the Interim Financial Statements of the Top Fund will be delivered on or before the 92^nd day after the Top Fund's most recently completed interim period.

(e) The Top Fund notifies its securityholders that the Top Fund has received and intends to rely on relief from the filing and delivery requirements under section 2.2, section 2.4, paragraph 5.1(2)(a) and paragraph 5.1(2)(b) of NI 81-106.

(f) The Top Fund is not a reporting issuer in any Canadian Jurisdiction, and the Filer has the necessary registrations to carry out its operations in each Canadian Jurisdiction in which it operates.

(g) The conditions in section 2.11 of NI 81-106 will be met, except for subsection 2.11(b), and:

(i) the Annual Financial Statements will be delivered to securityholders of the Top Fund in accordance with Part 5 of NI 81-106 on or before the 183^rd day after the Top Fund's most recently completed financial year; and

(ii) the Interim Financial Statements will be delivered to securityholders of the Top Fund in accordance with Part 5 of NI 81-106 on or before the 92^nd day after the Top Fund's most recently completed interim period.

(h) This decision terminates within one year of the coming into force of any amendment to NI 81-106 or other rule that modifies how the Annual Filing Deadline, the Annual Delivery Requirement, the Interim Filing Deadline or the Interim Delivery Requirement applies in connection with investment funds that are not reporting issuers.

"Darren McKall"

Darren McKall

Manager, Investment Management Division

Ontario Securities Commission

Application # 2025/0063

SEDAR+ # 6238561