Edgepoint Wealth Management Inc.

October 26, 2021

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from requirement in section 2.1 of NI 81-101 to prepare fund facts in accordance with the requirements of Form 81-101F3 in order to provide disclosure pertaining to tiered management fee pricing structure.

Applicable Legislative Provisions

National Instrument 81-101 Mutual Fund Prospectus Disclosure, ss. 2.1 and 6.1.

October 26, 2021

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 EDGEPOINT WEALTH MANAGEMENT INC. (the Filer) AND IN THE MATTER OF THE FUNDS (as defined below)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of EdgePoint Monthly Income Portfolio (the Income Fund) and any mutual fund that the Filer may establish in the future that offers Tiered Series, as defined below (the Future Funds, and together with the Income Fund, the Funds, and each individually, a Fund), for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) exempting the Funds from the requirement in section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) to prepare a fund facts document in the form of Form 81-101F3 Contents of Fund Facts Document (Form 81-101F3), to permit the Funds to deviate from certain requirements in Form 81-101F3 in order to prepare fund facts documents for Tiered Series that include Tiered Management Fee Disclosure (as defined below) (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 Filers have 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 (collectively, the Passport Jurisdictions, and together with the Jurisdiction, 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 Filers:

The Filer

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

2. The Filer is registered in Ontario, Québec, and Newfoundland and Labrador as an investment fund manager;

3. The Filer is, or will be, the investment fund manager of the Funds.

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

The Income Fund

5. The Income Fund is an open-end mutual fund trust created under the laws of Ontario by way of a declaration of trust dated as of October 4, 2021.

6. The Income Fund filed a preliminary simplified prospectus, annual information form and fund facts documents dated October 4, 2021. Upon the issuance of a final receipt in respect of these offering documents, the Income Fund will offer Series A Units, Series F Units, Series I Units, Series A(N) Units, Series F(N) Units in each of the Jurisdictions. The Income Fund will also become a reporting issuer subject to National Instrument 81-102 Investment Funds.

7. The Income Fund is not in default of securities legislation in any of the Jurisdictions.

The Future Funds

8. Each Future Fund will be an open-end mutual fund trust created under the laws of Ontario, or an open-end mutual fund that is a class of shares of a mutual fund corporation incorporated under the laws of Ontario.

9. Each Future Fund will be a reporting issuer under the laws of each of the Jurisdictions and subject to National Instrument 81-102 Investment Funds. The securities of each of the Future Funds will be qualified for distribution pursuant to a simplified prospectus, fund facts and annual information form that will be prepared, filed and receipted in accordance with NI 81-101.

The Tiered Series

10. Each Fund will offer one or more series of units (the Tiered Series) whose annual management fee will be calculated as a percentage of the series' value and will be determined at predetermined time intervals (each a Calculation Period) in accordance with a predetermined schedule of management fee tiers.

11. At the beginning of each Calculation Period, the management fee of a Tiered Series for that Calculation Period is determined with reference to the daily average yield to maturity of a widely-available third party interest index (Reference Rate) in the preceding Calculation Period. As a result, the management fee for Tiered Series may decrease as interest rates decrease and may increase as interest rates increase, on a trailing Calculation Period basis, in accordance with predetermined disclosed management fee tiers.

The Income Fund's Tiered Series

12. Series A Units, Series A(N) Units, Series F Units, and Series F(N) Units of the Income Fund (the Income Fund Tiered Series) are Tiered Series. The annual management fee of each of the Income Fund Tiered Series will be calculated as a percentage of the series' value and is determined at the beginning of each calendar quarter in accordance with a predetermined schedule of management fee tiers.

13. At the beginning of each calendar quarter, the management fee of the Income Fund Tiered Series for that quarter is determined with reference to the daily average yield to maturity of the FTSE Canada Universe Bond Index in the preceding calendar quarter. As a result, the management fee for the Income Fund Tiered Series may decrease as interest rates decrease and may increase as interest rates increase, on a trailing calendar quarter basis, in accordance with predetermined disclosed management fee tiers.

The Tiered Management Fee Disclosure

14. Item 1.3 of Part II of Form 81-101F3 has prescriptive disclosure requirements for what can be included in the "Fund expenses" section of the fund facts (the Fund Expenses Item).

15. For each fund facts document of a Tiered Series of a Fund, including the Income Fund, the Filer proposes to deviate from the requirements of the Fund Expenses Item in order to include additional information under the "Fund expenses" heading regarding the Tiered Series' management fee structure (the Tiered Management Fee Disclosure): The Tiered Management Fee Disclosure will include a description of the manner in which the Tiered Series' annual management fee is calculated, the Calculation Period, the name of the Reference Rate, the impact of interest rates on the management fee, the management fee applicable in the Calculation Period as of which the fund facts document is dated, the Reference Rate for the preceding Calculation Period, and a breakdown of each management fee tier and corresponding Reference Rate. The Tiered Management Fee Disclosure will also provide a website address where the applicable management fee for the series will be posted.

16. The Filer believes it is important that investors be provided with specific Tiered Management Fee Disclosure in the fund facts of the Tiered Series of a Fund to ensure full, true and plain disclosure in respect of the management fee structure of each 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 each fund facts of a Tiered Series of a Fund includes the Tiered Management Fee Disclosure.

"Darren McKall"

Manager

Investment Funds and Structured Products

Ontario Securities Commission

Application File #: 2021/0576