1832 Asset Management L.P. (Re), 2026 CanLII 11466

February 13, 2026

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 1832 ASSET MANAGEMENT L.P. (1832 AM)

AND

IN THE MATTER OF SCOTIA ESSENTIALS GROWTH PORTFOLIO (the Existing Fund)

AND ALL OTHER EXISTING AND FUTURE MUTUal FUNDS, INCLUDING EXCHANGE-TRADED MUTUAL FUNDS (ETFS) AND ALTERNATIVE MUTUAL FUNDS, MANAGED BY 1832 AM OR AN AFFILIATE (the Filer) (together with the Existing Fund, the Top Funds)

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) pursuant to section 19.1 of National Instrument 81-102 Investment Funds (NI 81-102) exempting the Top Funds from the multi-tier fund-of-fund restriction in paragraph 2.5(2)(b) of NI 81-102 to permit a three-tier structure where a Top Fund purchases and holds directly or indirectly securities of one or more other mutual funds (including ETFs and alternative mutual funds), each of which is, or will be, subject to NI 81-102 and managed by the Filer (each, a Reference Fund), which Reference Fund in turn holds directly or indirectly more than 10% of its net asset value (NAV) in securities of one or more other mutual funds (including ETFs and alternative mutual funds), each of which is, or will be, subject to NI 81-102 (each, a Third Tier Fund) (each, a Three-Tier Structure) (the Requested Relief). The Third Tier Funds may be: (i) one or more mutual funds (including ETFs and alternative mutual funds) managed by the Filer (each, an 1832 Third Tier Fund, and, together with the Top Funds and the Reference Funds, the Funds and, each, a Fund) and/or (ii) one or more other mutual funds (including ETFs and alternative mutual funds) (the Other Funds and, each, an Other Fund).

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 (together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 81-102 have the same meaning if used in this decision, unless otherwise defined. In addition to the defined terms used in this decision, capitalized terms used in this decision have the following meanings:

Policies means the Filer’s Fairness Policy and Acquisition and Holding of Securities of a Related Underlying Fund Policy.

Further, each of the terms “invests”, “holds”, “investment” and “holding” refers to any investing or investment made in, or holding of, securities either directly or indirectly through specified derivatives, as the context requires.

Representations

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

1. 1832 AM is a limited partnership formed and organized under the laws of the province of Ontario. The general partner of 1832 AM is 1832 Asset Management G.P. Inc., an Ontario corporation wholly-owned by the Bank of Nova Scotia, with its head office located in Toronto, Ontario.

2. 1832 AM is registered as: (i) a portfolio manager in all of the provinces and territories of Canada; (ii) an exempt market dealer in all of the provinces and territories of Canada; (iii) an investment fund manager in Ontario, Quebec, Newfoundland and Labrador and the Northwest Territories; (iv) a commodity trading manager in Ontario; (v) an adviser in Manitoba; and (vi) a derivatives portfolio manager in Quebec.

3. The Filer is, or will be, the registered investment fund manager of each Fund in a Three-Tier Structure.

4. The Other Funds are, or will be, managed by investment fund managers unaffiliated with the Filer.

5. The Filer may act as the registered portfolio manager of the Funds in a Three-Tier Structure or may appoint one or more registered portfolio managers or sub-advisors to provide the Filer with investment advice in respect of a Fund’s investments.

6. Each Top Fund, Reference Fund and Third Tier Fund is, or will be, a mutual fund organized as an open-ended trust, limited partnership or class of a mutual fund corporation organized and governed by the laws of a Jurisdiction or the laws of Canada. The securities of each Reference Fund and Third Tier Fund may be sold to investors other than the Funds.

7. Each Top Fund, Reference Fund and Third Tier Fund is, or will be, an investment fund to which NI 81-102 applies, subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities, and offered by a prospectus filed and receipted in the Jurisdictions and, accordingly, a reporting issuer in the Jurisdictions.

8. Neither the Filer nor any existing Fund is in default of securities legislation in any Jurisdiction.

Three-Tier Structure

9. The Existing Fund invests primarily in a diversified mix of mutual funds, equity securities and/or fixed income securities located anywhere in the world and aims to achieve long term capital appreciation with a secondary focus on income generation using a balanced approach to investing. The Filer proposes to cause the Existing Fund and other Top Funds to achieve their respective investment objectives by investing a portion of their assets in securities of one or more Reference Funds.

10. Each Reference Fund may invest, among other things, in one or more Third Tier Funds. In some circumstances, these investments in Third Tier Funds will exceed 10% of the Reference Fund’s NAV.

11. Each Third Tier Fund in the Three-Tier Structure primarily invests, or will primarily invest, directly in a portfolio of securities and/or other assets. It may also invest up to 10% of its NAV in securities of other investment funds.

12. Each Three-Tier Structure is subject to the Policies. The Fairness Policy includes processes to ensure that funds, including the Funds in a Three-Tier Structure, are treated fairly with respect to the allocation of securities, prices and trading commissions. The Filer also reviews and assesses the trade allocation policies of sub-advisors, where the sub-advisor is trading in securities for more than one client, to ensure fair treatment of all clients in allocating investment opportunities. Additionally, the Acquisition and Holding of Securities of a Related Underlying Fund Policy includes procedures for investments in related underlying funds. The Filer has put in place processes to manage large unitholder investments and redemptions in fund-of-fund structures, to ensure that unitholders are not adversely impacted by trading activities of large unitholders.

13. To manage liquidity risk due to cross-ownership of funds within a Three-Tier Structure, the Filer will use a combination of risk management tools to address the significant investor risk, including (i) Independent Review Committee approved governance policies that have been adopted to protect all investors in the Funds, (ii) internal portfolio manager notification requirements of significant cash flows into the Funds, (iii) ongoing liquidity monitoring of each Fund’s portfolio, and (iv) real time cash projection reporting for the Funds. Each Fund in a Three-Tier Structure will be managed as a stand-alone investment for purposes of the application of these risk management tools.

14. The investment strategies of each Top Fund in a Three-Tier Structure, as stated in the Fund’s prospectus, state or will state (in the next regularly scheduled renewal, or amendment if earlier), that the Fund will invest in one or more Reference Funds and that each of these Reference Funds may invest more than 10% of its net assets in a class of securities of one or more Third Tier Funds, which in respect of 1832 Third Tier Funds, either does not charge management or other fees or waives such fees.

15. For purposes of section 2.5 of NI 81-102, each Top Fund will be considered to be holding securities of each Reference Fund, whether the Top Fund holds the securities of each Reference Fund directly or indirectly through one or more specified derivatives. Accordingly, each Top Fund’s investment in one or more of the Reference Funds will result in a Three-Tier Structure. Absent the Requested Relief, this Three-Tier Structure is contrary to the multi-layering restriction in paragraph 2.5(2)(b) of NI 81-102 and does not fit within the exceptions to paragraph 2.5(2)(b) found in subsection 2.5(4) of NI 81-102. Except for paragraph 2.5(2)(b), a Top Fund’s use of the Three-Tier Structure will be made in accordance with the provisions of section 2.5 of NI 81-102, including paragraphs 2.5(2)(a) and 2.5(2)(a.1) of NI 81-102.

16. An investment by a Reference Fund in securities of its Third Tier Funds is, and will be, made in accordance with the provisions of section 2.5 of NI 81-102, including paragraphs 2.5(2)(a) and 2.5(2)(a.1) of NI 81-102.

17. To avoid duplicative fees, a Top Fund will invest in a class of securities of a Reference Fund that either charges nil management and other fees or waives such fees. Similarly, a Reference Fund will invest in a class of securities of an 1832 Third Tier Fund that either charges nil management and other fees or waives such fees. Where a Reference Fund invests in securities of Other Funds, the Filer will ensure that the Reference Fund does not pay management or other fees that, to a reasonable person, would duplicate a fee payable by the Other Fund for the same service. No sales charges will be paid by a Top Fund relating to an investment into any Reference Fund or by any Reference Fund relating to an investment in any Third Tier Fund. Accordingly, there will be no duplication of fees payable by the Top Fund, Reference Fund or Third Tier Fund of any Three-Tier Structure, as applicable.

18. The prospectus of each Top Fund in a Three-Tier Structure will also disclose in the next regularly scheduled renewal, or amendment if earlier, that the accountability for portfolio management is (a) at the level of each Top Fund with respect to the selection of Reference Funds to be purchased by that Top Fund and with respect to the purchase and sale of any other portfolio securities or other assets held by that Top Fund, (b) at the level of each Reference Fund with respect to the selection of Third Tier Funds to be purchased by that Reference Fund and with respect to the purchase and sale of any other portfolio securities or other assets held by that Reference Fund, and (c) at the level of each Third Tier Fund with respect to the purchase and sale of portfolio securities and other assets held by that Third Tier Fund.

19. Each Top Fund in a Three-Tier Structure will comply with the requirements under National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Top Fund was investing directly in the Third Tier Funds.

20. The investment objectives of the underlying funds held by a Top Fund in a Three-Tier Structure will generally be independent of each other in order to minimize potential overlap between the securities held by the respective portfolios of the underlying funds. To address any potential duplication of securities between underlying funds, the Filer will, through its compliance testing, aggregate the portfolio holdings across all underlying funds in a Three-Tier Structure for purposes of determining compliance with the concentration, control and other threshold limits under NI 81-102.

21. It would not be prejudicial to the public interest to grant the Requested Relief to the Top 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 the Requested Relief is granted, provided that:

(a) the Filer is the registered investment fund manager of each Top Fund, each Reference Fund and each 1832 Third Tier Fund in a Three-Tier Structure;

(b) the investment strategies of each Top Fund in a Three-Tier Structure, as stated in the Top Fund’s prospectus (which, in the case of an existing Top Fund, means the Top Fund’s prospectus or amendment next receipted after the Top Fund becomes part of a Three-Tier Structure), state that the Top Fund will invest in one or more Reference Funds and that each of these Reference Funds may invest more than 10% of its net assets in a class of securities of one or more Third Tier Funds;

(c) the proposed investment of each Top Fund in its Reference Fund(s) and of each Reference Fund in its Third Tier Fund(s) in a Three-Tier Structure is otherwise made in compliance with all other requirements of section 2.5 of NI 81-102, except to the extent that discretionary relief has been granted from any such requirement, as applicable;

(d) there is no duplication of management fees or administrative fees between each tier of the Three-Tier Structure;

(e) the Three-Tier Structure is implemented in a manner that seeks the fair treatment for investors in all of the investment funds managed by the Filer that are involved in a Three-Tier Structure by allocating portfolio transaction costs fairly among all of such investment funds;

(f) the Filer maintains investor protection policies and procedures that address liquidity and redemption risk due to cross-ownership of funds within a Three-Tier Structure, and each Fund in a Three-Tier Structure is managed as a stand-alone investment for purposes of these policies and procedures; and

(g) each Top Fund in a Three-Tier Structure complies with the requirements under NI 81-106 relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 or Form 41-101F4 relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Top Fund was investing directly in the Third Tier Funds.

“Darren McKall”

Darren McKall

AVP, Investment Management Division

Ontario Securities Commission

Application No. 2026-37; SEDAR #6385901