April 9, 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 Manulife Investment Management Limited (the Filer)
AND
IN THE MATTER OF
Manulife Balanced ETF Portfolio Fund, Manulife Conservative ETF Portfolio Fund and Manulife Growth ETF Portfolio Fund (the Proposed Wrap Funds) and the Future Wrap Funds (as defined herein and together with the Proposed Wrap Funds, the Wrap 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 each Wrap Fund from clause 2.5(2)(b) of NI 81-102 to permit a Wrap Fund to purchase and hold, directly or indirectly, securities of a corresponding Middle Fund (as defined herein), which Middle Funds will hold, directly or indirectly, more than 10% of their net asset value in securities of one or more other investment funds, including exchange-traded funds and alternative mutual funds (each a Third Tier Fund) (the Exemption Sought).
Under National Policy 11-203 - Process for Exemptive Relief Applications in Multiple Jurisdictions:
(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 British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon (together with Ontario, the Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 - Definitions, NI 81-102 or in MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein. In addition, capitalized terms used in this Decision have the following meanings:
Clone Fund Exception means the exception in clause 2.5(4)(a) of NI 81-102 that would permit a Three-Tier structure if a Middle Fund was a “clone fund”, as defined in NI 81-102.
Funds means, together, the Wrap Funds and the Middle Funds.
Future Middle Funds has the meaning ascribed to such term in paragraph 8.
IPU Exception means the exception in clause 2.5(4)(b) of NI 81-102 that would permit a Three-Tier structure if a Middle Fund purchased or held securities that are index participation units (as defined in NI 81-102) issued by an investment fund.
Middle Funds means, together, the Proposed Middle Funds and the Future Middle Funds.
NI 81-106 means National Instrument 81-106 Investment Fund Continuous Disclosure.
Policies means the Large securityholders policy and the Fund expenses allocation policy, as applicable, of the Filer each dated as of December 17, 2025, as the same may be amended, restated or replaced from time to time.
Proposed Middle Funds means Manulife Balanced ETF Portfolio, Manulife Conservative ETF Portfolio and Manulife Growth ETF Portfolio.
Three-Tier Structure refers to the structure where a Wrap Fund purchases and holds securities of a Middle Fund and such Middle Fund, in turn, holds, or will hold, more than 10% of its net asset value in securities of one or more Third Tier Funds.
Representations
The decision is based on the following facts represented by the Filer:
The Filer and the Funds
The Filer is a corporation amalgamated under the laws of Canada, with its registered head office located in Toronto, Ontario.
The Filer is currently registered as: (i) a commodity trading manager in Ontario; (ii) a portfolio manager in each province and territory of Canada; (iii) a derivatives portfolio manager in Québec; and (iv) an investment fund manager in each of Ontario, Québec, and Newfoundland and Labrador.
The Filer, or an affiliate, will be the investment fund manager of the Funds and the Filer, or an affiliate, will be the portfolio manager of the Funds.
The Filer is not in default of securities legislation in any of the Jurisdictions.
Each Fund will be an open-ended mutual fund, organized and governed by the laws of a Jurisdiction or the laws of Canada. Each Middle Fund will also be an exchange traded mutual fund.
Each Fund will be governed by the provisions of NI 81-102, subject to any exemption therefrom that has been, or may be, granted by the securities regulatory authorities.
Each Proposed Wrap Fund will seek to achieve its investment objective by investing primarily in a corresponding Middle Fund.
The Filer may, in the future, create additional open-ended mutual funds, organized and governed by the laws of a Jurisdiction or the laws of Canada and governed by NI 81-102 and which may be conventional mutual funds or alternative mutual funds (the Future Wrap Funds). Like the Proposed Wrap Funds, the Future Wrap Funds will seek to achieve their investment objective by investing in a corresponding exchange traded mutual fund organized and governed by the laws of a Jurisdiction or the laws of Canada and governed by NI 81-102 (the Future Middle Funds).
Each Middle Fund may invest in, among other things, one or more Third Tier Funds. A Middle Fund may hold, directly or indirectly, more than 10% of its net asset value in securities of such Third Tier Funds.
The Proposed Wrap Funds are conventional mutual funds.
Future Wrap Funds and Future Middle Funds may be conventional mutual funds or alternative mutual funds.
Where a Middle Fund holds, directly or indirectly, more than 10% of its net asset value in securities of a Third Tier Fund that is an alternative mutual fund, such Middle Fund will also be an alternative mutual fund (an Alternative Middle Fund). A Wrap Fund that invests in a corresponding Alternative Middle Fund will also be an alternative mutual fund.
The Third Tier Funds
Other than as described in paragraph 14, it is anticipated that each Third Tier Fund will be exchange traded investment funds managed by the Filer or an affiliate (Affiliated Third Tier Funds). A Third Tier Fund may also be an alternative mutual fund.
A Middle Fund may, however, invest in exchange traded funds managed by unaffiliated investment managers (an Unaffiliated Third Tier Fund) if there are no suitable investment opportunities in affiliated investment funds.
Each Affiliated Third Tier Fund and Unaffiliated Third Tier Fund will be: (i) an investment fund subject to NI 81-102; (ii) an investment fund whose securities qualify as “index participation units” within the meaning of NI 81-102 (IPUs); or (iii) invested in by a Middle Fund pursuant to exemptive relief.
Each Third Tier Fund primarily invests, or will primarily invest, directly in a portfolio of securities and/or other assets.
No Third Tier Fund will invest more than 10% of its net asset value in securities of other investment funds, other than securities: (i) of a money market fund; or (ii) that are index participation units issued by an investment fund.
Three-Tier Structure
In the Three-Tier Structure, each Wrap Fund will seek to achieve its investment objective by investing primarily in a corresponding Middle Fund. Other investments may include cash and cash equivalents. It is not expected that a Wrap Fund will hold directly any other portfolio securities. Each Wrap Fund is intended to provide a similar risk/return profile as its corresponding Middle Fund.
Each Wrap Fund is intended to offer an alternative distribution channel for its corresponding Middle Fund (ie as a conventional mutual fund distributed via Fundserv, as opposed to an exchange traded mutual fund whose securities are sold on an exchange). Functionally, each Wrap Fund will be a clone of its corresponding Middle Fund – although a Wrap Fund may not technically meet the “clone fund” definition as set out in NI 81-102. More specifically, each Wrap Fund will seek to offer a similar return as its corresponding Middle Fund and the name of each Wrap Fund will be tied to its corresponding Middle Fund.
As noted, a Middle Fund will hold, directly or indirectly, more than 10% of its net asset value in securities of Third Tier Funds. As the Middle Funds are not “clone funds”, nor are all the securities of all Third Tier Funds anticipated to be IPUs, with respect to certain investments in Affiliated Third Tier Funds, some investments stemming from the Third Tier Structure are contrary to the multi-layering restriction in clause 2.5(2)(b) of NI 81-102 and do not fit within the Clone Fund Exception or the IPU Exception.
Except for clause 2.5(2)(b), all investments by a Fund in another investment fund in the Three Tier Structure will be made in accordance with the provisions of section 2.5 of NI 81-102 (including in accordance with applicable exemptive relief granted from such provisions).
Each fund-of-fund investment in the Three Tier Structure will be subject to the Policies. The Filer must, in accordance with the Policies, seek the fair treatment of investors in all investment funds managed by the Filer, including funds involved in a Three Tier Structure by allocating transaction costs fairly between funds. Additionally, the Policies manage certain large securityholder investments, with a view of ensuring that a fund and its investors are not adversely impacted by trading activities of any large securityholder who benefits from a fee reduction.
To manage liquidity risk due to cross-ownership of funds within the Three-Tier Structure, the Filer will use a combination of risk management tools to address the significant investor risk, including (i) IRC 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 affiliated fund in the Three-Tier Structure will be managed as a stand-alone investment for purposes of the application of these risk management tools.
The prospectus of each Wrap Fund in the Three-Tier Structure will disclose that a Wrap Fund invests in securities of its corresponding Middle Fund, and that each such Middle Fund may invest more than 10% of its net asset value in the securities of Third Tier Funds.
The prospectus of each affiliated investment fund in the Three-Tier Structure will also disclose that the accountability for portfolio management is (a) at the level of each Middle Fund with respect to the selection of Third Tier Funds to be purchased by that Middle Fund and with respect to the purchase and sale of any other portfolio securities or other assets held by that Middle Fund and (b) 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.
An investment by a Middle Fund in securities of its Third Tier Funds 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) (as applicable) of NI 81-102.
There will be no duplication of fees between each tier of the Three-Tier Structure contrary to the applicable restriction in clause 2.5(2)(d) of NI 81-102 NI 81-102. The prospectus of each Fund will disclose that fees and expenses will not be duplicated because of investments in underlying investment funds and clause 2.5(2)(d) of NI 81-102 will therefore be complied with.
To avoid duplicative fees, a Wrap Fund will either invest in a class of securities of a Middle Fund that either charges nil management and other fees or waives or reimburses such fees. A Wrap Fund may also itself not charge any duplicative management fees. Similarly, a Middle Fund will invest in a class of securities of an Affiliated Third Tier Fund that either charges nil management and other fees or waives or reimburses such fees. Where a Middle Fund invests in securities of Unaffiliated Third Tier Funds, the Filer will ensure that the Middle Fund does not pay management or other fees that, to a reasonable person, would duplicate a fee payable by the Unaffiliated Third Tier Fund for the same service. No sales charges will be paid by a Wrap Fund relating to an investment into any Middle Fund or by any Middle Fund relating to an investment in any Affiliated Third Tier Fund. Accordingly, there will be no duplication of fees, contrary to clause 2.5(2)(d) of NI 81-102, in a Three-Tier Structure.
Each Wrap Fund in a Three-Tier Structure will comply 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 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document, as applicable, relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Wrap Fund was investing directly in the Third Tier Funds.
The investment objectives of the underlying funds held by a Wrap 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 affiliated underlying funds (and will use its best efforts to also aggregate and include the portfolio holdings of Unaffiliated Third Tier Funds) in a Three-Tier Structure for purposes of determining compliance with the concentration, control and other threshold limits under NI 81-102.
It would not be prejudicial to the public interest to grant the Exemption Sought.
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:
(i) the Filer, or an affiliate, is the investment fund manager and portfolio manager of each Fund and any Affiliated Third Tier Fund;
(ii) the investment strategy of each Wrap Fund, as stated in its prospectus, states the name of its corresponding Middle Fund;
(iii) the investment strategies of each Wrap Fund will state that the Wrap Fund will invest in a corresponding Middle Fund and the Middle Fund may invest more than 10% of its net assets in one or more other investment funds;
(iv) the proposed investment of each Wrap Fund in its corresponding Middle Fund and the investment by each Middle Fund in a Third Tier Fund 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;
(v) there is no duplication of management fees or administrative fees between each tier of the Three-Tier Structure contrary to clause 2.5(2)(d) of NI 81-102;
(vi) 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 the Three-Tier Structure by allocating portfolio transaction costs fairly among all of such investment funds;
(vii) the Filer maintains investor protection policies and procedures that address liquidity and redemption risk due to cross-ownership of funds within the Three-Tier Structure, and each affiliated fund in a Three-Tier Structure is managed as a stand-alone investment for purposes of these policies and procedures;
(viii) a Wrap Fund only invests directly in securities of a corresponding Middle Fund. Other investments may include cash, cash equivalents and derivatives; and
(ix) each Wrap Fund 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 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document, as applicable, relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Wrap Fund was investing directly in the Third Tier Funds.
“Darren McKall”
Darren McKall Associate Vice President, Investment Management Division Ontario Securities Commission
Application #2026-85 SEDAR+ File #6397034