Fidelity Investments Canada ULC (Re), 2025 CanLII 51616

June 4, 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

FIDELITY INVESTMENTS CANADA ULC

(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 (the Legislation) to exempt the Filer from the requirement in section 3.2.01 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) to deliver to a purchaser the most recently filed fund facts document (Fund Facts) for the applicable series of securities of a mutual fund before it accepts an instruction from the purchaser for the purchase of such security (the Fund Facts Delivery Requirement) in respect of the existing and future investment funds subject to National Instrument 81-102 Investment Funds (NI 81-102) managed by the Filer or an affiliate or successor of the Filer (each, a Fund, and collectively, the Funds), in respect of a purchase of securities made pursuant to a one-time Automatic Switch (as defined below) (the Requested Relief).

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 each of the other provinces and territories of Canada (together with Ontario, 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

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

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

2. The Filer is registered as an investment fund manager in Ontario, Québec and Newfoundland and Labrador, as a portfolio manager in each of the Canadian Jurisdictions, as a commodity trading manager in Ontario and as a mutual fund dealer in each of the Canadian Jurisdictions.

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

4. Each Fund is, or will be, an open-ended mutual fund trust created under the laws of the Province of Ontario or an open-end mutual fund that is, or will be, a class of shares of a mutual fund corporation.

5. The Filer is, or will be, the investment fund manager and trustee of the Funds established as mutual fund trusts and is, or will be, the investment fund manager of the Funds that are classes of shares of a mutual fund corporation.

6. The Funds are not in default of any of the requirements of securities legislation in any of the Canadian Jurisdictions.

7. Securities of the Funds managed by the Filer are primarily sold to the public through other registered dealers.

8. Securities of the Funds managed by the Filer are also distributed on a limited basis to Permitted Clients, as defined below, pursuant to the terms and conditions of the Filer’s mutual fund dealer registration (the Family Plan). The capitalized terms used below have the meaning given to such terms in the Filer’s mutual fund dealer registration pursuant to a decision that was previously granted by the Ontario Securities Commission on March 14, 2002, as subsequently varied in a decision dated December 23, 2002 and as further varied in a decision dated November 19, 2009.

“Permitted Client”, for the Registrant, means a person or company that is a client of the Registrant, and that is, or was at the time the person or company became a client of the Registrant:

(i) an Executive or Employee of the Registrant;

(ii) a Related Party of an Executive or Employee of the Registrant;

(iii) a Related Party of the spouse of an Executive or Employee of the Registrant;

(iv) a Service Provider of the Registrant or an affiliated entity of a Service Provider of the Registrant;

(v) an Executive or Employee of a Service Provider of the Registrant;

(vi) a Related Party of an Executive or Employee of a Service Provider of the Registrant; or

(vii) a Related Party of the spouse of an Executive or Employee of a Service Provider of the Registrant.

9. Family Plan trades executed by the Filer are initiated by Permitted Clients that hold securities of the Funds in a Family Plan account (Family Plan Account Holders). Family Plan accounts are not managed accounts.

10. The Family Plan is currently structured such that Family Plan Account Holders may only purchase series B, S5, and S8 securities of the Funds. To reduce their management and administration fees, the Filer provides fee reductions through distributions and/or rebates, which are paid by the Funds or Fidelity, as applicable, and automatically reinvested in additional securities of the relevant series of the Funds.

11. To better align the services Family Plan Account Holders receive with the management and administration fees paid for fee-based type of clients, the Filer proposes a one-time automatic switch of Family Plan Account Holders’ existing holdings from series B, S5 and S8 securities of the Funds to series F, F5, and F8 securities of the same Funds, without each Family Plan Account Holder having to initiate the trade (the Automatic Switch), and to allow prospective Family Plan investors to purchase series F, F5 and F8 securities of the Funds instead of series B, S5 and S8 securities of the Funds. Permitting the Filer to perform the Automatic Switch will ensure that all assets for Family Plan Account Holders are maintained within a consistent series offering, streamlining administrative efforts for Family Plan Account Holders, prospective Family Plan investors and the Filer.

12. The Automatic Switch will maintain the Family Plan Account Holder’s securities in the same Funds with same underlying pool of assets, investment objectives, strategies, and valuation procedures, preserving all existing rights as securityholders. There will be no sales charges, switch fees, or other fees incurred due to the Automatic Switch. Additionally, the switch between series of the same Fund will not result in any adverse tax consequences for Family Plan Account Holders.

13. The only material difference to the Family Plan Account Holder between series B, S5 and S8 securities to series F, F5 and F8 securities is that series F, F5 and F8 securities of the Funds have lower management and administration fees than series B, S5 and S8 securities, and would result in the same or lower fees for Family Plan Account Holders (after fee distributions and/or rebates).

14. The Automatic Switch results in a redemption of series B, S5 or S8 securities immediately followed by a purchase of series F, F5 or F8 securities, respectively. Accordingly, each Automatic Switch will be a distribution that triggers the Fund Facts Delivery Requirement for the Filer.

15. The Automatic Switch is administrative in nature only and is the practical way to achieve the required result of giving Family Plan Account Holders the benefit of the same or lower management and administration fees with little disruption.

16. Pursuant to the Fund Facts Delivery Requirement, the Filer is required to deliver the most recently filed Fund Facts of a series of a Fund to a purchaser before it accepts an instruction for the purchase of securities of that series of a Fund.

17. The Filer proposes not to deliver the Fund Facts to Family Plan Account Holders in connection with the purchase of securities made pursuant to the Automatic Switch for the following reasons:

a) Upon the Automatic Switch, a Family Plan Account Holder’s investment will remain in securities of the same Fund with the same underlying pool of assets, the same investment objectives and investment strategies and the same valuation procedures. The Family Plan Account Holder would derive little benefit from receiving a further Fund Facts document about the relevant Fund.

b) At no time will a Family Plan Account Holder pay combined management and administration fees at a rate higher than the rate of the combined management and administration fees of the securities for which they initially subscribed.

c) In advance of the implementation date of the Automatic Switch, the Filer will provide notice to Family Plan Account Holders about the details of the Automatic Switch.

18. There would be little benefit for each Family Plan Account Holder to receive a Fund Facts in connection with the Automatic Switch.

19. The Requested Relief is limited in nature due to the one-time implementation of the Automatic Switch.

20. In the absence of the Requested Relief, the Filer may not carry out the Automatic Switch without complying with the Fund Facts 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 provided that:

1. The Filer sends to Family Plan Account Holders in series B, S5 and S8 securities 60 days in advance of the Automatic Switch a notice advising of the Automatic Switch to series F, F5 and F8 securities, as applicable, and that:

a. other than a difference in management and administration fees, there will be no other material difference between series B, S5 and S8 compared to series F, F5 and F8;

b. they will not receive the Fund Facts upon the Automatic Switch, but that:

i. they may request the most recently filed Fund Facts for the relevant series by calling a specified toll-free number or by sending a request via email to a specified address or email address;

ii. the most recently filed Fund Facts will be sent or delivered to them at no cost;

iii. the most recently filed Fund Facts may be found either on the SEDAR+ website or on the Filer’s website; and

iv. they will not have the right to withdraw from an agreement of purchase and sale in respect of a purchase of series F, F5 and F8 securities made pursuant to the Automatic Switch, but they will have the right of action for damages or recission in the event any Fund Facts or document incorporated by reference into a simplified prospectus for the series F, F5 and F8 securities, as applicable, contains a misrepresentation, whether or not they request the Fund Facts.

2. Following the Automatic Switch, the combined management and administration fees of the series F, F5 and F8 securities, as applicable, will be lower than the combined management and administration fees of the series B, S5 and S8 securities, as applicable, of the same Fund.

3. No sales charges, switch fees, short term trading fees or other fees will be payable in respect of an Automatic Switch.

"Darren McKall"

Darren McKall

Associate Vice President, Investment Management Division

Ontario Securities Commission

Application File #: 2025/0078

SEDAR+ File #: 6240612