(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation):

(A) revoking the Existing Relief (as defined below) (the Revocation); and

(B) replacing the Existing Relief with a decision pursuant to section 9.1 of NI 81-105 Mutual Fund Sales Practices (NI 81-105) exempting the Filer from subsection 5.1(a) of NI 81-105 to permit the Filer to pay to a participating dealer direct costs incurred by the participating dealer relating to a sales communication, investor conference or investor seminar prepared or presented by the participating dealer (each individually referred to as a Cooperative Marketing Initiative, and collectively as Cooperative Marketing Initiatives), if the primary purpose of the Cooperative Marketing Initiative is to promote, or provide educational information concerning investing in securities and investment, retirement, tax and estate planning (collectively, Financial Planning) matters (the Exemption Sought).

Under National Policy 11-203 - 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 by the Filer in each of the other provinces and territories of Canada (together with the Jurisdiction, the Canadian Jurisdictions) in respect of the Exemption Sought.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 or NI 81-105 have the same meaning if used in this decision, unless otherwise defined.

Existing Relief means In the Matter of Franklin Templeton Investments Corp. dated July 24, 2012 - (2012) 35 OSCB 7319.

Representations

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

The Filer is a corporation amalgamated under the laws of the Province of Ontario with its head office in Toronto, Ontario.
The Filer is registered as:

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

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

The Filer acts, or will act, as investment fund manager of various investment funds governed by the applicable provisions of National Instrument 81-102 Investment Funds, subject to any exemptions therefrom that have been, or may in the future be, granted by the securities regulatory authorities (each a Fund and collectively, the Funds).
Each Fund is or will be (a) a reporting issuer in one or more Canadian Jurisdictions, and (b) subject to NI 81-105, including Part 5 thereof, which governs marketing and educational practices.
Securities of the Funds are, or will be, distributed by participating dealers in one or more Canadian Jurisdictions.
The Filer is a “member of the organization” (as such term is defined in NI 81-105) of the Funds, as the Filer is the manager of the Funds.
The Filer complies with NI 81-105, including Part 5 of NI 81-105, in respect of its marketing and educational practices.
The Filer and each existing Fund are not in default of applicable securities legislation in any Canadian Jurisdiction.
Under subsection 5.1(a) of NI 81-105, the Filer is permitted to pay to a participating dealer the direct costs incurred by the participating dealer relating to a Cooperative Marketing Initiative if the primary purpose of the Cooperative Marketing Initiative is to promote, or provide educational information about, the Funds, the mutual fund family of which the Funds are members, or mutual funds generally.
Subsection 5.1(a) of NI 81-105 prohibits the Filer from paying to a participating dealer the direct costs incurred by the participating dealer relating to a Cooperative Marketing Initiative where the primary purpose is to provide educational information about Financial Planning matters.
The Existing Relief obtained by the Filer provides exemption from subsection 5.1(a) of NI 81-105 to permit the Filer to pay to a participating dealer direct costs incurred by the participating dealer relating to the Cooperative Marketing Initiative if the primary purpose of the Cooperative Marketing Initiative is to provide educational information concerning tax or estate planning matters. In addition to the topics currently permitted under subsection 5.1(a) of NI 81-105 and the Existing Relief, the Filer also wishes to sponsor Cooperative Marketing Initiatives where the primary purpose of the Cooperative Marketing Initiatives is to provide educational information concerning investing in securities and investment planning and retirement planning, each of which are aspects of Financial Planning matters. The Filer will otherwise comply with subsections 5.1(b) through (e) of NI 81-105 in respect of such Cooperative Marketing Initiative it sponsors.
The Filer has expertise in Financial Planning matters or may retain others with such expertise from time to time.
Mutual funds, including the Funds managed by the Filer, can be used to meet a variety of financial goals and accordingly are regularly used as financial planning tools. Allowing the Filer to sponsor Cooperative Marketing Initiatives on Financial Planning matters may benefit investors as it may facilitate and potentially increase investors’ access to educational information on such matters, which may in turn better equip them to make financial decisions that involve mutual funds.
Under sections 5.2 and 5.5 of NI 81-105, the Filer is permitted to sponsor the costs incurred by participating dealers in attending or organizing and presenting at conferences where the primary purpose is the provision of educational information on, among other things, certain Financial Planning matters.
Specifically, under subsection 5.2(a) of NI-81-105, the Filer is permitted to provide a non-monetary benefit to a representative of a participating dealer by allowing him or her to attend a conference or seminar organized and presented by the Filer where the primary purpose is the provision of educational information about, among other things, financial planning, investing in securities or mutual fund industry matters.
Similarly, under subsection 5.5(a) of NI 81-105, the Filer is permitted to pay to a participating dealer part of the direct costs that the participating dealer incurs in organizing or presenting at a conference or seminar that is not an investor conference or investor seminar referred to in section 5.1 of NI 81-105, where the primary purpose is the provision of educational information about, among other things, financial planning, investing in securities or mutual fund industry matters.
The Filer will not require participating dealers to sell any of the Funds or other financial products to investors as a condition of the Filer's sponsorship of a Cooperative Marketing Initiative.
The Filer will pay for its sponsorship of Cooperative Marketing Initiatives out of its normal sources of revenue. Accordingly, the sponsorship cost will not be borne by the Funds.

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 Exemption Sought is granted, provided that in respect of a Cooperative Marketing Initiative whose primary purpose is to provide educational information concerning Financial Planning matters:

(i) the Filer otherwise complies with the requirements of subsections 5.1(b) through (e) of NI 81-105;

(ii) the Filer does not require any participating dealer to sell any of the Funds or other financial products to investors;

(iii) other than as permitted by NI 81-105, the Filer does not provide participating dealers and their representatives with any financial or other incentives for recommending any of the Funds to investors;

(iv) the materials presented in a Cooperative Marketing Initiative concerning Financial Planning matters contain only general educational information about such matters;

(v) the Filer prepares or approves the content of the general educational information about Financial Planning matters presented in a Cooperative Marketing Initiative it sponsors and selects or approves an appropriately qualified speaker for each presentation about such matters delivered in a Cooperative Marketing Initiative;

(vi) any general educational information about Financial Planning matters presented in a Cooperative Marketing Initiative contains an express statement that the content presented is for information purposes only, and is not providing advice to the attendees of the investor conference or investor seminar or the recipients of the sales communication, as applicable; and

(vii) any general educational information about Financial Planning matters presented in a Cooperative Marketing Initiative contains an indication of the types of professionals who may generally be qualified to provide advice on the subject matter of the information presented.

“Darren McKall”

Darren McKall, Manager

Investment Management Division

Ontario Securities Commission

Application # 2025/0168

SEDAR # 6257444

Franklin Templeton Investments Corp., 2025 CanLII 42328

Case Summary

(the Filer)

Background

Decision