In the Matter of Ninepoint Partners LP, 2025 CanLII 81372

August 15, 2025

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction)

AND

IN THE MATTER OF NINEPOINT PARTNERS LP (the Filer)

AND

(the Proposed ETFs, and similar future ETFs managed by the Filer (the Future ETFs, together with the Proposed ETFs, the ETFs))

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the ETFs for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the ETFs from subsections 2.1(1) and 2.1(1.1) of National Instrument 81-102 – Investment Funds (NI 81-102) (the Concentration Restriction) to permit each ETF to invest in a single Specified Canadian Public Issuer (as defined below) in excess of the investment restrictions contained in such subsections, in accordance with its fundamental investment objective (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(i) the Ontario Securities Commission is the principal regulator for this application; and

(ii) 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 all of the provinces and territories of Canada other than the Jurisdiction (the Other Jurisdictions and, together with the Jurisdiction, the Canadian Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 – Definitions (NI 14-101), 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:

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

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 share of an ETF.

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

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

TSX means the Toronto Stock Exchange.

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

Prospectus means the prospectus of each ETF.

Specified Canadian Public Issuer means a public company (i) that is incorporated in Canada; (ii) that is listed on a recognized Canadian stock exchange; (iii) that has a market capitalization in excess of CAD$20 billion at the time of initial investment; 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 CAD$75 million (collectively, the Canadian Public Issuer Requirements).

Securityholders means the beneficial or registered holders of ETF Securities.

Representations

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

The Filer and the ETFs

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 Québec as an investment fund manager; and (iii) in British Columbia, Alberta, Québec, 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 of the Filer, will be the registered investment fund manager and registered portfolio manager of the ETFs. The Filer will apply to list the ETF Securities of the ETFs on an Exchange.
The Filer and the Proposed ETFs are not in default of securities legislation in any of the Canadian Jurisdictions.
Each Proposed ETF will be an exchange-traded alternative mutual fund that is a separate class of shares of a mutual fund corporation governed by the laws of a Canadian Jurisdiction. Each Future ETF will be an exchange-traded alternative mutual fund or mutual fund that is a trust, corporation or separate class of shares of a mutual fund corporation governed by the laws of a Canadian Jurisdiction.
Each of Ninepoint Shopify HighShares ETF, Ninepoint Canadian Natural Resources HighShares ETF, Ninepoint Suncor HighShares ETF, Ninepoint Barrick HighShares ETF, Ninepoint Royal Bank HighShares ETF, Ninepoint TD HighShares ETF, Ninepoint BCE HighShares ETF, Ninepoint Enbridge HighShares ETF, Ninepoint CNR HighShares ETF and Ninepoint Cameco HighShares ETF will be an open-ended alternative mutual fund (as defined in NI 81-102) and each Future ETF will be an open-ended mutual fund or alternative mutual fund subject to NI 81-102.
The ETFs will be subject to NI 81-102, subject to any exemptions that may be granted by the applicable securities regulatory authorities.
The Filer will file a final simplified prospectus or long form prospectus in respect of each of the ETFs which will be prepared and filed in accordance with National Instrument 81-101 – Mutual Fund Prospectus Disclosure or NI 41-101, subject to any exemptions that may be granted by the applicable securities regulatory authorities.
Each ETF will be a reporting issuer under the laws of one or more of the Canadian Jurisdictions.
The ETF Securities will be (subject to satisfying the original listing requirements of the applicable Exchange) listed on an Exchange.
Designated Brokers 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 will occur in the secondary market.
The fundamental investment objective of each ETF will be to seek to provide:

(a) long-term capital appreciation through purchasing and holding of Portfolio Securities, including, in the case of an ETF that is an alternative mutual fund, on a levered basis; and

(b) high monthly cash distributions.

Specifically, the Portfolio Securities and the Specified Canadian Public Issuer for each of the Proposed ETFs will be as follows:

ETF Name

Portfolio Securities

Specified Canadian Public Issuer

Ninepoint Shopify HighShares ETF

Common shares

Shopify Inc.

Ninepoint Canadian Natural Resources HighShares ETF

Common shares

Canadian Natural Resources Limited

Ninepoint Suncor HighShares ETF

Common shares

Suncor Energy Inc.

Ninepoint Barrick HighShares ETF

Common shares

Barrick Mining Corporation

Ninepoint Royal Bank HighShares ETF

Common shares

Royal Bank of Canada

Ninepoint TD HighShares ETF

Common shares

Toronto-Dominion Bank

Ninepoint BCE HighShares ETF

Common shares

BCE Inc.

Ninepoint Enbridge HighShares ETF

Common shares

Enbridge Inc.

Ninepoint CNR HighShares ETF

Common shares

Canadian National Railway Company

Ninepoint Cameco HighShares ETF

Common shares

Cameco Corporation

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

Disclosure

The Prospectus will disclose:

(a) the name of each ETF using the convention reflected in this decision for the Proposed 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 Canadian Public Issuer and the expected outcomes for the ETF of such decisions in potential scenarios, such as merger or other restructuring of the Specified Canadian Public Issuer, a sale of part or all of its business, or bankruptcy of the Specified Canadian 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 securities are redeemable for securities of the ETF’s single underlying issuer, securities regulators may consider those ETF securities 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.

The Prospectus will provide only abbreviated disclosure in respect of the Portfolio Securities and the Specified Canadian Public Issuer based on publicly available information.
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 Canadian Public Issuer in respect of the Portfolio Securities. The Prospectus will direct investors to public disclosure made available by the Specified Canadian Public Issuer in respect of the Portfolio Securities in accordance with applicable Canadian securities legislation. The Prospectus will also clarify that such disclosure and other information made publicly available about the Portfolio Securities and the Specified Canadian Public Issuer on the Filer’s website and otherwise cannot be expected to contemplate the Distribution. The Prospectus will clearly state that the Filer is not the source of disclosure relating to the Portfolio Securities and the Specified Canadian Public Issuer and will clearly disclaim the Filer’s responsibility both for verifying the accuracy of such disclosure and for updating such disclosure.
To meet the full, true and plain disclosure requirement, the Prospectus will disclose that the Specified Canadian Public Issuer will not receive a direct or indirect financing benefit from the Distribution.

Reasons for the Exemption Sought

The ETFs cannot pursue their fundamental investment objectives without the Exemption Sought.
The Filer submits that each ETF’s strategy to acquire Portfolio Securities will be transparent, passive and fully disclosed to investors. An ETF will not invest in securities other than Portfolio Securities.
The Filer submits that an ETF that relies on the Exemption Sought would be analogous to an investment fund that relies on the exception to the Concentration Restriction in subsection 2.1(2) of NI 81-102 for purchases of equity securities by a “fixed portfolio investment fund”, as defined in NI 81-102, in accordance with its investment objectives. The Filer submits that the only difference would be that the ETFs are in continuous distribution and the ETF Securities are redeemable on each trading day, accordingly, the ETFs will buy and sell Portfolio Securities as may be required in connection with subscription and redemption requests received by the ETFs. However, the Filer submits that the existence of the ETF’s Designated Broker should mean that the ETF Securities (which are listed on an Exchange) will not trade at a discount to the net asset value per ETF Security which may more likely be the case for a “fixed portfolio investment fund”.
The Specified Canadian Public Issuers will be among the largest public issuers in Canada. The Portfolio Securities will be some of the most liquid equity securities listed on the TSX and will be less likely to be subject to liquidity concerns than the securities of other issuers.
The Filer believes that any risks associated with an investment in only a single Specified Canadian Public Issuer in reliance on the Exemption Sought will be mitigated by the fact that the Portfolio Securities are highly liquid and that there is a robust liquid options market for these securities.
The Filer submits that, given the market price per publicly listed security of certain of the Specified Canadian Public Issuers, many investors would be unable to achieve meaningful exposure to such Specified Canadian Public Issuers through direct investment.

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 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 Canadian Public Issuer and its Portfolio Securities satisfy the Canadian 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 Canadian Public Issuer;

(e) the ETF’s prospectus contains the disclosure referred to in representations 16 through 19 above; and

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

(g) no ETF will inter-list in the United States of America or any other foreign Marketplace; and

(h) no ETF will purchase securities of the Specified Canadian Public Issuer, if immediately following such purchase, the ETF would hold securities of the Specified Canadian Public Issuer in an amount exceeding 1% of the Specified Canadian Public Issuer’s total market capitalization.

“Darren McKall”

Darren McKall

Associate Vice President, Investment Management Division

Ontario Securities Commission

Application File No.: 2025/0420

SEDAR+ No.: 6308256