Franklin Templeton Investments Corp. (Re), 2026 CanLII 45445

May 14, 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 Franklin Templeton Investments Corp. (the Filer)

and

the Top Funds (as defined below)

Decision

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of each of the Filer, the Filer’s affiliates, the investment funds managed by the Filer or by an affiliate of the Filer that are reporting issuers subject to National Instrument 81-102 Investment Funds (NI 81-102) and National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107) (the Existing Top Funds) and any future investment funds managed by the Filer or an affiliate of the Filer that are, or will be, reporting issuers subject to NI 81-102 and NI 81-107 (the Future Top Funds, and together with the Existing Top Funds, the Top Funds) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation):

1. exempting the Top Funds from the restrictions in the Legislation which prohibit:

(a) an investment fund from knowingly making an investment in a person or company in which the investment fund, alone or together with one or more related investment funds, is a substantial security holder,

(b) an investment fund from knowingly making an investment in an issuer in which

i. any officer or director of the investment fund, its management company or distribution company or an associate of any of them, or

ii. any person or company who is a substantial security holder of the investment fund, its management company or its distribution company,

has a significant interest, and

(c) an investment fund, its management company or its distribution company from knowingly holding an investment described in paragraph (a) or (b) above,

2. exempting the Filer and each affiliate that is a registered adviser for a Top Fund from the prohibition in paragraph 13.5(2)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) against knowingly causing a Top Fund to invest in securities of any issuer in which a responsible person or an associate of a responsible person is a partner, officer or director, unless the fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase (this restriction, together with the restrictions described in paragraph 1 above are referred to herein as the Investment Fund Conflict of Interest Investment Restrictions), and

3. exempting the Filer and each affiliate that acts as manager of a Top Fund from the requirement to prepare a report in accordance with the requirements of the Legislation of every transaction by a Top Fund involving a purchase of securities from, or sale of securities to, any related person or company (the Investment Fund Conflict of Interest Reporting Requirement),

to permit each Top Fund to invest a portion of its assets in any collective investment scheme that is not an investment fund, and is, or will be, managed by the Filer or an affiliate of the Filer (the Underlying Investments), and

4. exempting each Top Fund from the restrictions in paragraphs 2.5(2)(a) and 2.5(2)(c) of NI 81-102 that prohibit an investment fund from investing in securities of an investment fund that is not subject to NI 81-102 and is not a reporting issuer in any Jurisdiction (the Fund-of-Fund Restrictions),

to permit each Top Fund to invest a portion of its assets in (i) Franklin BSP Real Estate Debt Fund, an investment fund established as a trust under the laws of the Province of Ontario, that is not a reporting issuer (the Initial Underlying Fund), and (ii) any future investment fund that is, or will be, managed by the Filer or an affiliate of the Filer that will have non-traditional investment strategies (the Future Underlying Funds and, together with the Initial Underlying Fund, the Underlying Funds).

The relief sought herein from the Investment Fund Conflict of Interest Investment Restrictions, the Investment Fund Conflict of Interest Reporting Requirement and the Fund-of-Fund Restrictions is collectively referred to in this decision as the Exemption Sought.

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 Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Québec, Prince Edward Island, Saskatchewan and Yukon (together with Ontario, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 Definitions, NI 81-102, NI 81-107 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:

The Filer

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

2. The Filer is registered as (i) an investment fund manager in Alberta, British Columbia, Manitoba, Newfoundland & Labrador, Nova Scotia, Ontario and Québec, (ii) a portfolio manager, mutual fund dealer and exempt market dealer in each province of Canada and the Yukon territory; and (iii) a commodity trading manager in Ontario.

3. The Filer is the investment fund manager of the Existing Top Funds and the Initial Underlying Fund, and the Filer or an affiliate of the Filer will be the investment fund manager of the Future Top Funds and the Future Underlying Funds. To the extent that the Filer or an affiliate of the Filer is the investment fund manager of any Future Top Fund or Future Underlying Fund, the representations set out in this decision will apply to the same extent to such Future Top Fund or Future Underlying Fund.

4. The Filer or an affiliate of the Filer is, or will be, the manager of the Underlying Investments.

5. The Filer or an affiliate of the Filer is, or will be, a “responsible person” (as that term is defined in NI 31-103) of each Top Fund and each Underlying Investment.

6. The Filer is not in default of securities legislation in any of the Jurisdictions.

The Top Funds

7. The securities of each Top Fund are, or will be, distributed to investors pursuant to a prospectus prepared in accordance with National Instrument 41-101 General Prospectus Requirements or National Instrument 81-101 Mutual Fund Prospectus Disclosure, as applicable.

8. The securities of each Top Fund are, or will be, qualified for distribution in one or more Jurisdictions.

9. Each Top Fund is, or will be, a reporting issuer under the securities legislation of one or more Jurisdictions.

10. Each Top Fund may wish to invest in securities of the Underlying Funds and Underlying Investments, provided the investment is consistent with the Top Fund’s investment objectives and strategies.

11. Each Top Fund will comply with the investment restrictions and practices provided in Part 2 of NI 81-102 (subject to any exemptive relief granted therefrom) in making any investment in an Underlying Fund or Underlying Investment and, in particular, will comply with the concentration restriction in section 2.1, the control restriction in section 2.2 and the illiquid assets restriction in section 2.4. Each Top Fund will treat securities of the Underlying Funds and Underlying Investments as illiquid assets for these purposes.

12. Each Top Fund qualifies to invest in securities of the Underlying Funds and Underlying Investments pursuant to applicable exemptions from the prospectus requirement under National Instrument 45-106 Prospectus Exemptions (NI 45-106) and/or the Legislation.

13. The Existing Top Funds are not in default of securities legislation of any of the Jurisdictions.

14. Each Top Fund is, or will be, subject to NI 81-107 and the manager of each Top Fund has established an independent review committee (the IRC) in order to review conflict of interest matters pertaining to its management of the Top Funds as required by NI 81-107.

The Underlying Funds and the Underlying Investments

15. Securities of the Initial Underlying Fund are, and any Future Underlying Funds or Underlying Investments will be, distributed solely to investors pursuant to exemptions from the prospectus requirements in accordance with NI 45-106 and/or the Legislation.

16. The Initial Underlying Fund has an offering memorandum which is provided to investors.

17. Each Underlying Fund and Underlying Investment produces, and will produce, audited financial statements on an annual basis, in accordance with generally accepted accounting principles with a qualified auditing firm as the auditor of those financial statements.

Initial Underlying Fund

18. The Initial Underlying Fund is an investment fund established as a trust under the laws of the Province of Ontario.

19. The investment objective of the Initial Underlying Fund is to invest substantially all of its assets in securities of Franklin BSP Real Estate Debt Fund (the FBRED Sub-Fund), a sub-fund of Franklin BSP Private Markets Fund SICAV SA, an investment company with variable capital – Part II UCI (société d’investissement à capital variable – fonds d’investissement soumis à la partie II de la loi de 2010) incorporated as a public limited liability company (société anonyme) with multiple compartments (à compartiments multiples), which seeks to achieve its investment objective by obtaining exposure to a portfolio of commercial real estate (CRE) debt investments, focused on senior secured, CRE loans across various Metropolitan Statistical Areas in the United States, and other real-estate related debt and equity investments, which may include subordinated debt.

20. The Initial Underlying Fund is an “investment fund” under the securities legislation of the Jurisdictions as it will invest substantially all of its assets in securities of FBRED Sub-Fund and generally will not invest for the purpose of exercising, or seeking to exercise, control over any issuer.

21. The Initial Underlying Fund is not subject to NI 81-102 and is not a reporting issuer in any of the Jurisdictions.

22. The net asset value (NAV) per security of the Initial Underlying Fund is calculated monthly by a party that is independent of the Filer.

23. The Initial Underlying Fund is not in default of securities legislation of any of the Jurisdictions.

24. No Top Fund will participate in the business or operations of the Initial Underlying Fund.

The Future Underlying Funds and Underlying Investments

25. Future Underlying Funds and Underlying Investments may be structured as limited partnerships, trusts or corporations governed by the laws of any of the Jurisdictions.

26. Each Future Underlying Fund will be an “investment fund” as such term is defined under the Legislation and will not be subject to NI 81-102.

27. Each Underlying Investment will not be an “investment fund” as such term is defined under the Legislation.

28. The Future Underlying Funds and Underlying Investments will not be reporting issuers in any of the Jurisdictions.

29. Each Underlying Investment will be operated in a manner similar to how the Filer operates its investment funds, including being administered by the Filer or an affiliate, having its assets managed by a portfolio manager, and calculating a NAV that is used to determine the purchase and redemption price of the securities of the Underlying Investment.

Investments by Top Funds in the Underlying Funds and Underlying Investments

30. An investment by a Top Fund in an Underlying Fund or Underlying Investment will only be made if the investment is compatible with the investment objectives of the Top Fund.

31. The Filer believes that an investment by a Top Fund in an Underlying Fund or Underlying Investment will provide the Top Fund with an efficient and cost-effective way to obtain exposure to diversified alternative and private asset classes (including private equity, private credit, private infrastructure, and private real estate), which are generally not available through investment funds that are reporting issuers or through direct investment. The Top Fund will also gain access to the investment expertise of the portfolio manager to the underlying assets of each Underlying Fund or Underlying Investment, as well as to their investment strategies and asset classes.

32. The Filer believes that an allocation to private equity, private credit, private infrastructure, private real estate and other alternative investments provides Top Fund investors with unique diversification opportunities and represents an appropriate investment tool for the Top Fund that has not been widely available in the past.

33. The Filer believes that it is in the best interests of the Top Funds to leverage the structure and strategy of each Underlying Fund or Underlying Investment in order to provide the Top Funds with exposure to a diversified array of alternative and private assets. The portfolio manager of the existing Underlying Fund possesses, and the portfolio managers of Future Underlying Funds or Underlying Investments will possess, expertise with respect to their asset classes that the portfolio management team of the Top Funds do not have, and employ investment approaches that the Filer cannot replicate internally.

34. Investments by a Top Fund in an Underlying Fund or Underlying Investment will be effected at an objective price. The Filer’s policies and procedures provide that an objective price, for this purpose, will be the NAV per security of the applicable class or series of the Underlying Fund or Underlying Investment.

35. Each Top Fund is, or will be, valued and redeemable daily and the Underlying Funds or Underlying Investments may be potentially subject to redemption limitations, including lock-up periods, early redemption penalties and other restrictions on redemptions in a given period of time (collectively, Redemption Limitations).

36. An investment by a Top Fund in an Underlying Fund or Underlying Investment will only be made if such investment represents the business judgment of a responsible person uninfluenced by considerations other than the best interests of that Top Fund.

Generally

37. The Filer does not anticipate that any fees or sales charges would be incurred, directly or indirectly, by a Top Fund with respect to an investment in an Underlying Fund or Underlying Investment that, to a reasonable person, would duplicate a fee payable by the Top Fund to the Filer or by its investors.

38. In respect of an investment by a Top Fund in an Underlying Fund or Underlying Investment, no management fees or incentive fees will be payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Fund or Underlying Investment for the same service.

39. A Top Fund’s investment in an Underlying Fund or Underlying Investment will be disclosed to investors in that Top Fund’s quarterly portfolio holding reports, financial statements, and fund facts or ETF facts documents, as applicable.

40. Where an investment is made by a Top Fund in an Underlying Fund or Underlying Investment, the annual and interim management reports of fund performance for the Top Fund will disclose the name of the related person in which an investment is made, being an Underlying Fund or Underlying Investment.

41. Where an investment is made by a Top Fund in an Underlying Fund or Underlying Investment, the records of portfolio transactions maintained by the Top Fund will include, separately for every portfolio transaction effected for the Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being an Underlying Fund or Underlying Investment.

42. There will be no established, publicly available secondary market for securities of the Underlying Funds or Underlying Investments, nor will there generally be any redemption rights applicable to the Top Funds as investors in the Underlying Funds or Underlying Investments. As such, the Top Funds will not be able to readily dispose of their interests in an Underlying Fund or Underlying Investment and any interest that a Top Fund holds in an Underlying Fund or Underlying Investment will be considered an “illiquid asset” under NI 81-102.

43. The prospectus of each Top Fund will disclose in the next renewal or amendment thereto following the date of a decision evidencing the Exemption Sought, the fact that the Top Fund may invest, directly or indirectly, in Underlying Funds, which are investment funds managed by the Filer or an affiliate of the Filer, and/or Underlying Investments, which are collective investment vehicles managed by the Filer or an affiliate of the Filer.

44. Each Underlying Fund or Underlying Investment produces, or will produce, audited financial statements on an annual basis, in accordance with generally accepted accounting principles with a qualified auditing firm as the auditor of those financial statements.

45. Subject to compliance with section 2.2 of NI 81-102, the amount invested from time to time in an Underlying Investment by a Top Fund, together with one or more Top Funds, may exceed 20% of the outstanding voting securities of the Underlying Investment. This may result by reason of a group of Top Funds providing initial investments into the Underlying Investment on the start-up of the Underlying Investment. As a result, each Top Fund could, together with one or more other Top Funds, become a “substantial security holder” of an Underlying Investment within the meaning of the Legislation, further to which the Top Fund would be prohibited under the Legislation from knowingly purchasing and holding securities of an Underlying Investment. The Top Funds are, or will be, “related investment funds”, as such term is defined in the Legislation by virtue of common management by the Filer or by an affiliate of the Filer.

46. In addition, an officer or director of the Filer or of an affiliate of the Filer may have a “significant interest” in an Underlying Investment and/or a person or company who is a substantial security holder of the Top Fund, the Filer or an affiliate of the Filer may have a “significant interest” in the Underlying Investment within the meaning of the Legislation, which would prohibit the Top Fund from investing in the Underlying Investment.

47. As the Filer or an affiliate of the Filer is, or will be, a “responsible person” of each Top Fund, the Filer or its affiliate would be prohibited by paragraph 13.5(2)(a) from causing a Top Fund to invest in an Underlying Investment in which a responsible person, or an associate of a responsible person is a partner, officer or director unless (i) this fact is disclosed to the client and (ii) the written consent of the client to the purchase is obtained before the purchase. It is impractical for the Filer to obtain the prior written consent from each investor in a Top Fund, given the widely held nature of the Top Fund.

48. Absent the Exemption Sought,

a. each Top Fund would be prohibited by the Investment Fund Conflict of Interest Investment Restrictions from (i) becoming a substantial securityholder of an Underlying Investment, alone or together with other Top Funds, and (ii) investing in an Underlying Investment in which an officer or director of the Filer or of an affiliate of the Filer has a significant interest or in which a person or company who is a substantial securityholder of the Top Fund or the Filer has a significant interest;

b. the Filer or an affiliate of the Filer acting as portfolio manager of a Top Fund would be prohibited by the Investment Fund Conflict of Interest Investment Restrictions from causing the Top Fund to invest in securities of an Underlying Investment without disclosing this fact and obtaining the written consent of each investor in the Top Fund before the purchase;

c. the Filer, or an affiliate of the Filer acting as the management company (as defined in the Legislation) of the Top Funds would be required by the Investment Fund Conflict of Interest Reporting Requirement to file a report of every transaction of purchase or sale of securities between the Top Funds and the Underlying Investments within 30 days after the end of the month in which such purchase or sale occurs; and

d. each Top Fund would be prohibited by the Fund-of-Fund Restrictions from purchasing or holding securities of an Underlying Fund because such Underlying Fund (i) is not, or will not be, subject to NI 81-102, and (ii) is not, or will not be, a reporting issuer in the Jurisdictions.

49. It would be costly and time-consuming for the Top Funds to comply with the Reporting Requirement.

50. The Filer considers that an investment by the Top Funds in the Underlying Funds or Underlying Investments raises “conflict of interest” matters within the meaning of NI 81-107 and, therefore, if the Exemption Sought is granted, the manager of the Top Fund will request approval from the IRC of the Top Funds to permit the investment of the Top Funds in the Underlying Funds and Underlying Investments, including by way of standing instructions. No such investments will be made until the IRC provides its approvals under section 5.2 of NI 81-107. The manager of the Top Funds will comply with section 5.1 of NI 81-107 and the manager of the Top Funds and the IRC of the Top Funds will comply with section 5.4 of NI 81-107 for any standing instructions the IRC provides in connection with the transactions. If the IRC becomes aware of an instance where the manager of a Top Fund did not comply with the terms of any decision evidencing the Exemption Sought, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Top Fund is organized.

51. Investments in Underlying Funds and Underlying Investments are considered illiquid investments under NI 81-102 and, therefore, are not permitted to exceed 10% of the NAV of a Top Fund. Such investments are included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 for a Top Fund. NI 81-102 allows holdings in illiquid investments so long as the aggregate exposure to illiquid investments is within the thresholds of the rule. The Filer has its own liquidity policy and manages each Top Fund’s liquidity prudently under the policy. Given the readily available liquidity of the remainder of each Top Fund’s investment portfolio, the Filer believes that the risk of a Top Fund needing to liquidate its investment in these illiquid assets when markets are under stress or in other environments where liquidity may be reduced is remote.

52. A Top Fund’s investment in an Underlying Investment or Underlying Fund will represent the business judgment of a responsible person uninfluenced by considerations other than the best interests of the Top Fund.

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:

(a) a direct or indirect investment by a Top Fund in an Underlying Fund or Underlying Investment will be compatible with the investment objective and strategy of such Top Fund and included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102;

(b) at the time of the purchase by a Top Fund of securities of an Underlying Fund or Underlying Investment, either (A) the Underlying Fund or Underlying Investment holds no more than 10% of its NAV in securities of other investment funds, or (B) the Underlying Fund or Underlying Investment:

(i) has adopted a fundamental investment objective to track the performance of another investment fund or similar investment product;

(ii) purchases or holds securities of investment funds that are “money market funds” (as such term is defined in NI 81-102); or

(iii) purchases or holds securities that are “index participation units” (as such term is defined in NI 81-102) issued by an investment fund;

(c) no sales or redemption fees will be payable by a Top Fund in relation to its purchases or redemptions of securities of the Underlying Fund or Underlying Investment, unless the Top Fund redeems its securities of the Underlying Fund or Underlying Investment during a Redemption Limitation, in which case a fee may be payable by the Top Fund;

(d) no management fees or incentive fees will be payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Fund or Underlying Investment for the same service;

(e) the securities of an Underlying Fund or Underlying Investment held by a Top Fund will not be voted at any meeting of the security holders of the Underlying Fund or Underlying Investment, except that the Top Fund may arrange for the securities of the Underlying Fund or Underlying Investment it holds to be voted by the beneficial holders of securities of the Top Fund;

(f) a Top Fund’s investment in an Underlying Fund or Underlying Investment will be disclosed to investors in such Top Fund’s quarterly portfolio holding reports, financial statements, and fund facts or ETF facts documents, as applicable;

(g) no Top Fund will actively participate in the business or operations of any Underlying Fund or Underlying Investment;

(h) the prospectus of a Top Fund discloses, or will disclose, in the next renewal or amendment thereto following the date of this decision, the fact that the Top Fund may invest in Underlying Funds and Underlying Investments which are investment vehicles managed by the Filer or an affiliate, the potential conflict of interest that arises from these investments and how it is mitigated or avoided, and the approximate or maximum percentage of the NAV that is intended to be invested in securities of the Underlying Funds and Underlying Investments;

(i) the IRC of a Top Fund will review and provide its approval, including by way of standing instructions, prior to the purchase of securities of an Underlying Fund or Underlying Investment, directly or indirectly, by the Top Fund, in accordance with subsection 5.2(2) of NI 81-107;

(j) the Filer complies with section 5.1 of NI 81-107, and the Filer and the IRC of the Top Fund comply with section 5.4 of NI 81-107, for any standing instructions the IRC provides in connection with the transactions;

(k) if the IRC becomes aware of an instance where the Filer or an affiliate of the Filer, in its capacity as the manager of a Top Fund, did not comply with the terms of this decision, or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Top Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Jurisdiction under which the Top Fund is organized;

(l) where an investment is made by a Top Fund in an Underlying Investment or Underlying Fund, the annual and interim management reports of fund performance for the Top Fund disclose the name of the related person in which an investment is made, being the Underlying Investment or Underlying Fund, as the case may be;

(m) where an investment is made by a Top Fund in an Underlying Investment or Underlying Fund, the records of portfolio transactions maintained by the Top Fund include, separately for every portfolio transaction effected for a Top Fund by the Filer or through any affiliate of the Filer, the name of the related person in which an investment is made, being the Underlying Investment or Underlying Fund, as the case may be;

(n) each Top Fund will be treated as an arm’s length investor in an Underlying Investment or Underlying Fund on the same terms as all similarly situated third-party investors, with each investment by a Top Fund in the Underlying Investment or Underlying Fund made at a price and other terms as favourable for the Top Fund as for all similarly situated third-party investors; and

(o) a Top Fund will not invest in an Underlying Fund or Underlying Investment unless (i) the NAV of the Underlying Fund or Underlying Investment is based on a valuation of the portfolio assets of the Underlying Fund or Underlying Investment that is independently determined by an arm’s length third party, and (ii) the annual financial statements of the Underlying Fund or Underlying Investment are audited and made available to the Top Fund.

“Darren McKall”

Darren McKall AVP, Investment Management Ontario Securities Commission

Application No. 2026/0078; SEDAR+ #6395984