CI Investments Inc.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted under subsection 62(5) of the Securities Act to permit the extension of two ETF prospectus lapse dates 83 and 63-days to facilitate the combination of the ETFs' prospectuses with two other prospectuses under common management -- no conditions.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
November 3, 2022
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 CI INVESTMENTS INC. (the Filer) AND IN THE MATTER OF CI GALAXY MULTI-CRYPTO ETF CI BIO-REVOLUTION ETF CI DIGITAL SECURITY ETF (THE ETFS)
DECISION
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 (the Legislation) that the respective time limits for the renewal of the long form prospectus of CI Galaxy Multi-Crypto ETF (the January 2022 ETF) dated January 7, 2022 (the January 2022 ETF Prospectus) and the long form prospectus of CI Bio-Revolution ETF and CI Digital Security ETF (the February 2022 ETFs) dated February 17, 2022 (the February 2022 ETFs Prospectus, and together with the January 2022 ETF Prospectus, the Prospectuses) be extended to those time limits that would apply as if the lapse dates of the Prospectuses were March 31, 2023 (in the case of the January 2022 ETF Prospectus) and April 21, 2023 (in the case of the February 2022 ETFs Prospectus) (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 each of the other provinces and territories of Canada (together with Ontario, the 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:
The Filer
1. The Filer is a corporation incorporated under the laws of Ontario. The Filer's head office is located in Toronto, Ontario.
2. The Filer is registered as follows:
a. under the securities legislation of all Jurisdictions as a portfolio manager and an exempt market dealer;
b. under the securities legislation of Ontario, Québec, and Newfoundland and Labrador as an investment fund manager; and
c. under the Commodity Futures Act of Ontario as a commodity trading counsel and a commodity trading manager.
3. The Filer is the investment fund manager and portfolio manager of the ETFs.
4. Neither the Filer nor any of the ETFs are in default of securities legislation in any of the Jurisdictions.
The ETFs
5. Each of the ETFs is an exchange traded mutual fund trust established under the laws of Ontario. Each of the ETFs is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
6. Securities of the ETFs are currently qualified for distribution in each of the Jurisdictions under the Prospectuses. The securities of the ETFs are listed on the Toronto Stock Exchange.
7. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the January 2022 ETF Prospectus is January 7, 2023 (the January 2022 Current Lapse Date) and the lapse date of the February 2022 ETFs Prospectus is February 17, 2023 (the February 2022 Current Lapse Date, each a Current Lapse Date and together with the January 2022 Current Lapse Date, the Current Lapse Dates). Accordingly, under subsection 62(2) of the Act, the distribution of securities of each of the ETFs would have to cease on the applicable Current Lapse Date unless: (i) the ETFs file a pro forma long form prospectus at least 30 days prior to the applicable Current Lapse Date; (ii) the final long form prospectus is filed no later than 10 days after the applicable Current Lapse Date; and (iii) a receipt for the final long form prospectus is obtained within 20 days after the applicable Current Lapse Date.
Reasons for the Lapse Date Extension
8. The Filer is the investment fund manager of the January 2022 ETF and the February 2022 ETFs. The Filer is also the investment fund manager of (i) approximately two other ETFs (the Affiliated Crypto ETFs) that currently distribute their securities to the public under a long form prospectus and ETF facts (collectively, the Affiliated Crypto ETFs Prospectus) with a lapse date of March 31, 2023 and (ii) approximately 38 other ETFs (the Affiliated CI ETFs) that currently distribute their securities to the public under a long form prospectus and ETF facts (collectively, the Affiliated CI ETFs Prospectus) with a lapse date of April 21, 2023.
9. The Filer wishes to combine (i) the January 2022 ETF Prospectus with the Affiliated Crypto ETFs Prospectus and (ii) the February 2022 ETFs Prospectus with the Affiliated CI ETFs Prospectus in order to reduce renewal, printing and related costs.
10. Offering (i) the January 2022 ETF and the Affiliated Crypto ETFs under the same renewal long form prospectus and ETF facts documents (collectively, the Renewal Documents) and (ii) the February 2022 ETFs and the Affiliated CI ETFs under the same Renewal Documents would facilitate the distribution of the Renewal Documents in the Jurisdictions and enable the Filer to streamline disclosure across the Filer's ETF platform. The Affiliated Crypto ETFs and the Affiliated CI ETFs also share many common operational and administrative features with the January 2022 ETF and February 2022 ETFs, respectively, and combining them under the same Renewal Documents will allow investors to compare their features more easily.
11. It would be impractical to alter and modify all of the dedicated systems, procedures and resources required to prepare the Renewal Documents of the Affiliated Crypto ETFs Prospectus and the Affiliated CI ETFs Prospectus and unreasonable to incur the costs and expenses associated therewith, so that the Renewal Documents of the Affiliated Crypto ETFs Prospectus and the Affiliated CI ETFs Prospectus can be filed earlier with the Renewal Documents of the January 2022 ETF and February 2022 ETFs on or before their respective lapse dates.
12. The Filer also may make changes to the features of the Affiliated Crypto ETFs Prospectus and the Affiliated CI ETFs Prospectus as part of the process of renewing the Affiliated Crypto ETFs Prospectus and the Affiliated CI ETFs Prospectus. The ability to incorporate the January 2022 ETF into the Affiliated Crypto ETFs Prospectus and the February 2022 ETFs into the Affiliated CI ETFs Prospectus will ensure that the Filer can make the operational and administrative features of the January 2022 ETF and February 2022 ETFs consistent with the Affiliated Crypto ETFs Prospectus and the Affiliated CI ETFs Prospectus, if necessary.
13. There have been no material changes in the affairs of the ETFs since the dates of the Prospectuses, as applicable. Accordingly, the Prospectuses continue to represent accurate information regarding the ETFs, as applicable.
14. Given the disclosure obligations of the Filer and the ETFs, should any material change in the business, operations or affairs of the ETFs occur, the Prospectuses or ETF fact documents in respect of the applicable ETFs, will be amended as required under the Legislation.
15. New investors of the ETFs will receive delivery of the most recently filed ETF fact documents of the applicable ETFs. In addition, the Prospectuses will remain available to investors upon request.
16. The Exemption Sought will not affect the accuracy of the information contained in the Prospectuses or ETF fact documents of each of the ETFs and will therefore not be prejudicial to the public interest.
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.