Franklin Templeton Investments Corp. et al.

March 23, 2023

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from certain provisions of NI 81-101, NI 41-101, NI 81-102 and NI 81-106 to permit new ETF series of continuing funds to use the past performance, financial data, start date and fund expenses of corresponding terminating funds in their sales communications, simplified prospectus, ETF facts documents, management reports of fund performance and financial statements -- subject to conditions.

Applicable Legislative Provisions)

National Instrument 81-101 Mutual Fund Prospectus Disclosure, ss. 2.1 and 6.1(1).

Form 81-101F1 Contents of Simplified Prospectus, Item 8(2) of Part B.

National Instrument 41-101 General Prospectus Requirements, ss. 3.1(2), 3B.2 and 19.1(1).

Form 41-101F2 Information Required in an Investment Fund Prospectus, Item 17.2.

Form 41-101F4 Information Required in an ETF Facts Document, Items 2 and 5 of Part I, and Item 1.3 of Part II.

National Instrument 81-102 Investment Funds, ss. 2.3(1)(f), 3.1, 15.1.1, 15.3(2), 15.6(1)(a)(i)(A), 15.6(1)(b), 15.6(1)(d)(i), 15.8(2)(a), 15.8(2)(a.1), 15.8(3)(a), 15.8(3)(a.1), and 19.1(1).

National Instrument 81-106 Investment Fund Continuous Disclosure, ss. 2.1, 2.3, 4.4 and 17.1(1).

Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance, Items 3.1(1), 3.1(7), 3.1(7.1), 3.1(8), 4.1(1), 4.1(2), 4.2(1), 4.2(2), 4.3(1)(a) and 4.3(1)(b) of Part B, and Items 3(1) and 4 of Part C.

March 23, 2023

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 IN THE MATTER OF THE FUNDS LISTED IN SCHEDULE A (the Continuing Funds)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of the Continuing Funds, each being a mutual fund that offers Mutual Fund Securities and intends to offer ETF Securities, for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that grants exemptive relief to the Filer and each Continuing Fund as set forth below (collectively, the Exemption Sought):

(a) an exemption from section 2.1 of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) to modify Item 8(2) of Part B of Form 81-101F1 Contents of Simplified Prospectus (Form 81-101F1) to permit the exchange-traded series (ETF Series) of each Continuing Fund to disclose the series start date of the corresponding Terminating ETF (as defined below) as its series start date in the simplified prospectus of the Continuing Funds;

(b) an exemption from sections 3.1(2) and 3B.2 of National Instrument 41-101 General Prospectus Requirements (NI 41-101) for the purposes of the following exemptions sought from Form 41-101F2 Information Required in an Investment Fund Prospectus (Form 41-101F2) and Form 41-101F4 Information Required in an ETF Facts Document (Form 41-101F4):

(i) Item 17.2 of Form 41-101F2 to permit the ETF Series of each Continuing Fund to disclose the trading price and volume information required thereunder of the corresponding Terminating ETF as its trading price and volume information;

(ii) Item 2 of Part I of Form 41-101F4 to permit the ETF Series of each Continuing Fund to disclose the start date, management expense ratio (the MER), average daily volume, number of days traded, market price, net asset value and average bid-ask spread of the corresponding Terminating ETF as its information in the applicable ETF Facts (as defined below);

(iii) Item 5 of Part I of Form 41-101F4 to permit the ETF Series of each Continuing Fund to use the past performance data of the corresponding Terminating ETF in the "Average return", "Year-by-year returns" and "Best and worst 3-month returns" sections in the applicable ETF Facts; and

(iv) Item 1.3 of Part II of Form 41-101F4 to permit the ETF Series of each Continuing Fund to use the MER, the trading expense ratio and the expenses of the corresponding Terminating ETF in the "ETF expenses" section of the applicable ETF Facts;

(c) an exemption from sections 15.3(2), 15.6(1)(a)(i)(A), 15.6(1)(b), 15.6(1)(d)(i), 15.8(2)(a), 15.8(2)(a.1), 15.8(3)(a) and 15.8(3)(a.1) of National Instrument 81-102 Investment Funds (NI 81-102) to permit the ETF Series of each Continuing Fund to use the performance data of the corresponding Terminating ETF in sales communications and reports to securityholders (collectively, Fund Communications) of the Continuing Fund (together with paragraphs (a) and (b) above, the Past Performance Relief);

(d) an exemption from sections 2.1 and 2.3 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) to permit each Continuing Fund to file comparative annual and interim financial statements that include, in respect of the ETF Series of the Continuing Fund, information derived from the financial statements of the corresponding Terminating ETF;

(e) an exemption from section 4.4 of NI 81-106 for relief from the requirements of Form 81-106F1 Contents of Annual and Interim Management Report of Fund Performance (Form 81-106F1) set out below, to permit each Continuing Fund to include in its annual and interim management reports of fund performance (MRFPs), in respect of the ETF Series of the Continuing Fund, the performance data and information derived from the financial statements and other financial information (collectively, the Financial Data) of the corresponding Terminating ETF, as follows:

(i) Items 3.1(1), 3.1(7), 3.1(7.1) and 3.1(8) of Part B of Form 81-106F1 to permit the ETF Series of each Continuing Fund to use the financial highlights of the corresponding Terminating ETF in its Form 81-106F1;

(ii) Items 4.1(1), 4.1(2), 4.2(1), 4.2(2), 4.3(1)(a) and 4.3(1)(b) of Part B of Form 81-106F1 to permit the ETF Series of each Continuing Fund to use the past performance data of the corresponding Terminating ETF in its Form 81-106F1; and

(iii) Items 3(1) and 4 of Part C of Form 81-106F1 to permit the ETF Series of each Continuing Fund to use the financial highlights and past performance data of the corresponding Terminating ETF in its Form 81-106F1 (together with paragraph (d) above, the Continuous Disclosure Relief).

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 section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filer and the Continuing Funds in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon (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.

ETF Facts means a prescribed summary disclosure document required pursuant to NI 41-101 in respect of one or more classes or series of ETF Securities being distributed under a prospectus.

ETF Securities means securities of an exchange-traded class or series of a Fund that are listed or will be listed on the TSX or another Marketplace, including the ETF Series, and that will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.

Fund Facts means a prescribed summary disclosure document required pursuant to NI 81-101 in respect of one or more classes or series of Mutual Fund Securities being distributed under a prospectus.

Funds means the Continuing Funds and the Terminating ETFs.

Marketplace means a "marketplace" as defined in National Instrument 21-101 Marketplace Operation that is located in Canada.

Mutual Fund Securities means securities of a non-exchange-traded class or series of a Fund that are or will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.

Terminating ETFs means Franklin Bissett Core Plus Bond Active ETF, Franklin Bissett Corporate Bond Active ETF, Franklin Bissett Short Duration Bond Active ETF, Franklin Brandywine Global Sustainable Income Optimiser Active ETF, Franklin ClearBridge Sustainable Global Infrastructure Income Active ETF, Franklin ClearBridge Sustainable International Growth Active ETF, Franklin Global Growth Active ETF, Franklin Innovation Active ETF and Franklin Western Asset Core Plus Bond Active ETF.

TSX means the Toronto Stock Exchange.

Representations

The 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, having its head office in Toronto, Ontario.

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

3. The Filer is the investment fund manager of each Fund. The Filer or an affiliate of the Filer is the portfolio manager of the Funds.

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

The Funds

5. Each Fund is a mutual fund established under the laws of a Jurisdiction. Each Fund is a reporting issuer in the Jurisdictions in which its securities are distributed.

6. Subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities, each Fund is subject to NI 81-102.

7. Securities of each Terminating ETF are listed on the TSX and are qualified for sale in each of the Jurisdictions under a long form prospectus and ETF Facts dated May 17, 2022, as amended, each of which has been prepared in accordance with NI 41-101.

8. Securities of each Continuing Fund are qualified for sale under a simplified prospectus, annual information form and Fund Facts dated May 27, 2022, as amended, each of which has been prepared in accordance with NI 81-101.

9. Each Terminating ETF currently invests all or substantially all of its assets in securities of its corresponding Continuing Fund.

10. Each Continuing Fund follows the standard investment restrictions and practices established under NI 81-102, except pursuant to the terms of any exemption that has been obtained.

11. When the simplified prospectus of the Continuing Funds is renewed on or about May 17, 2023, the Filer expects to file a preliminary and pro forma simplified prospectus in the form prescribed by Form 81-101F1 offering securities of the Continuing Funds (the 2023 Mutual Fund Prospectus). Pursuant to the 2023 Mutual Fund Prospectus, the Filer will qualify for distribution ETF Securities of each Continuing Fund and will continue to offer Mutual Fund Securities of each Continuing Fund, resulting in the Continuing Funds offering both Mutual Fund Securities and ETF Securities. At this time, the Filer will also file Fund Facts in the form prescribed by Form 81-101F3 Contents of Fund Facts Document for each series of Mutual Fund Securities and ETF Facts in the form prescribed by Form 41-101F4 for each series of ETF Securities.

12. The Filer will apply to list any ETF Securities of the Continuing Funds on the TSX or another Marketplace. Listing is subject to the approval of the TSX or other Marketplace, in accordance with its applicable listing requirements.

13. None of the Funds are in default of securities legislation in any of the Jurisdictions.

The Mergers

14. The Filer is streamlining and modernizing its product lineup and amending the structure of the Continuing Funds so that the Continuing Funds will have a "dual class" structure. The dual class structure means that each Continuing Fund will offer both ETF Securities and Mutual Fund Securities.

15. When the simplified prospectus of the Continuing Funds is renewed on or about May 17, 2023, the Filer expects to file a preliminary and pro forma simplified prospectus to qualify ETF Series of each Continuing Fund, resulting in each Continuing Fund offering both Mutual Fund Securities and ETF Securities under the 2023 Mutual Fund Prospectus. As a part of its modernization efforts, the Filer proposes to merge (each, a Merger and collectively, the Mergers) each Terminating ETF into the ETF Series of the corresponding Continuing Fund on or about July 7, 2023 (the Merger Date) as set forth below.

Terminating ETF

ETF Series of the Continuing Fund

Franklin Bissett Core Plus Bond Active ETF

Franklin Bissett Core Plus Bond Fund (ETF Series)

Franklin Bissett Corporate Bond Active ETF

Franklin Bissett Corporate Bond Fund (ETF Series)

Franklin Bissett Short Duration Bond Active ETF

Franklin Bissett Short Duration Bond Fund (ETF Series)

Franklin Brandywine Global Sustainable Income Optimiser Active ETF

Franklin Brandywine Global Sustainable Income Optimiser Fund (ETF Series)

Franklin ClearBridge Sustainable Global Infrastructure Income Active ETF

Franklin ClearBridge Sustainable Global Infrastructure Income Fund (ETF Series)

Franklin ClearBridge Sustainable International Growth Active ETF

Franklin ClearBridge Sustainable International Growth Fund (ETF Series)

Franklin Global Growth Active ETF

Franklin Global Growth Fund (ETF Series)

Franklin Innovation Active ETF

Franklin Innovation Fund (ETF Series)

Franklin Western Asset Core Plus Bond Active ETF

Franklin Western Asset Core Plus Bond Fund (ETF Series)

16. Until the Mergers, the securities of each Terminating ETF will be in continuous distribution and listed on the TSX. Upon completion of the Mergers, the ETF Series of each Continuing Fund will be listed on the TSX under the ticker symbol of the corresponding Terminating ETF and will have a different CUSIP number than the corresponding Terminating ETF. The Filer has confirmed this approach with the TSX and CDS.

17. The ETF Series of each Continuing Fund are expected to be listed for trading on or about July 10, 2023.

18. Each Merger will be carried out pursuant to the "pre-approved" merger conditions set out in section 5.6 of NI 81-102.

19. The Filer will convene special meetings of the unitholders of the Terminating ETFs in order to seek the approval of the unitholders of each Terminating ETF to complete the applicable Merger, as required by paragraph 5.1(1)(f) of NI 81-102. If unitholder approval for a Merger is not obtained, the Filer will terminate the applicable Terminating ETF and will still offer both ETF Securities and Mutual Fund Securities of the corresponding Continuing Fund.

20. The Filer will present the Mergers to the independent review committee of the Terminating ETFs for its recommendation as to whether each Merger achieves a fair and reasonable result for the applicable Terminating ETF.

21. Once the Exemption Sought has been granted, a press release describing the Mergers will be issued and filed via SEDAR and a material change report for the Terminating ETFs will be filed via SEDAR.

22. The Filer does not consider the Mergers to constitute a "material change" for any of the Continuing Funds and accordingly, there is no intention to convene a meeting of unitholders of the Continuing Funds to approve the Mergers pursuant to paragraph 5.1(1)(g) of NI 81-102.

23. Each Terminating ETF will be terminated on or about the Merger Date and will be wound up as soon as reasonably possible thereafter.

24. The ETF Series of the Continuing Funds are being created for the purpose of the Mergers, and therefore:

(a) upon completion of the Mergers, the unitholders of each Terminating ETF will have rights as investors in ETF Series of the corresponding Continuing Fund that are substantially similar in all material aspects to the rights they had as investors in the applicable Terminating ETF prior to the Mergers;

(b) the portfolio manager and sub-adviser of each Continuing Fund, where applicable, is the same as the corresponding Terminating ETF;

(c) each Continuing Fund has valuation procedures that are identical to the valuation procedures of each corresponding Terminating ETF; and

(d) the combined management fee and administration fee attached to the ETF Series of each Continuing Fund will be the same as the management fee for the corresponding Terminating ETF and the ETF Series of each Continuing Fund will pay the same limited operating expenses that are chargeable operating expenses for each Terminating ETF.

25. The Filer considers that the ETF Series of each Continuing Fund are and will be managed in a manner which is substantially similar in all material respects to the manner in which the ETF Series of each corresponding Terminating ETF have been managed.

Past Performance Relief and Continuous Disclosure Relief

26. The Filer is seeking to make the Mergers as seamless as possible for investors in each Terminating ETF. The past performance data and financial information of each Terminating ETF is significant information which can assist investors in determining whether to purchase and/or to continue to hold securities of the ETF Series of the corresponding Continuing Fund. The ETF Series of each Continuing Fund will be created upon filing of the preliminary and pro forma simplified prospectus of the Continuing Funds in Spring 2023. The Filer will not commence distributing these ETF Securities until the completion of the Mergers. As a result, as at the effective date of the Mergers, in the absence of the Exemption Sought, the ETF Series of the Continuing Funds will not have their own past performance or series specific financial data on which investors can base an investment decision.

27. The Filer submits that treating the ETF Series of each Continuing Fund as fungible with each corresponding Terminating ETF for purposes of the past performance data and financial information of the Continuing Funds would be beneficial to investors and that to do otherwise would cause unnecessary confusion among investors concerning the difference between each Terminating ETF and the ETF Series of the corresponding Continuing Fund.

28. The Exemption Sought will allow each Continuing Fund to disclose information to investors in the ETF Series of each Continuing Fund that is based on the same type of information that was applicable to the corresponding Terminating ETF, that is:

(a) The ETF Facts for the ETF Series of each Continuing Fund will contain information that is based on the information disclosed in the ETF Facts for the corresponding Terminating ETF, until such time as the Continuing Fund has information regarding the ETF Series based on its own operations for the applicable periods.

(b) The simplified prospectus for the Continuing Funds will contain information about the ETF Series of each Continuing Fund that is based on the information disclosed in the prospectus for the corresponding Terminating ETF until such time as each Continuing Fund has information regarding the ETF Series based on its own operations for the applicable periods.

(c) The MRFPs and financial statements for each Continuing Fund will contain information about the ETF Series of each Continuing Fund that is based on the information disclosed in the past MRFPs and financial statements, as applicable, for the corresponding Terminating ETF until such time as the Continuing Fund has information regarding the ETF Series based on its own operations for the applicable periods.

(d) The Fund Communications for the ETF Series of each Continuing Fund will include the applicable past performance data of the corresponding Terminating ETF prepared in accordance with Part 15 of NI 81-102.

29. The Filer will include disclosure about the Mergers in each of the documents listed in paragraph 28, to the extent the Filer considers appropriate for the type of document.

30. The Filer submits that investors will not be misled if each of the documents listed in paragraph 28 contains the applicable information about the applicable Terminating ETF and rather will have more complete and accurate information about whether to invest or to continue to hold investments in the ETF Series of the Continuing Funds.

Terminating ETF	ETF Series of the Continuing Fund

Franklin Bissett Core Plus Bond Active ETF	Franklin Bissett Core Plus Bond Fund (ETF Series)

Franklin Bissett Corporate Bond Active ETF	Franklin Bissett Corporate Bond Fund (ETF Series)

Franklin Bissett Short Duration Bond Active ETF	Franklin Bissett Short Duration Bond Fund (ETF Series)

Franklin Brandywine Global Sustainable Income Optimiser Active ETF	Franklin Brandywine Global Sustainable Income Optimiser Fund (ETF Series)

Franklin ClearBridge Sustainable Global Infrastructure Income Active ETF	Franklin ClearBridge Sustainable Global Infrastructure Income Fund (ETF Series)

Franklin ClearBridge Sustainable International Growth Active ETF	Franklin ClearBridge Sustainable International Growth Fund (ETF Series)

Franklin Global Growth Active ETF	Franklin Global Growth Fund (ETF Series)

Franklin Innovation Active ETF	Franklin Innovation Fund (ETF Series)

Franklin Western Asset Core Plus Bond Active ETF	Franklin Western Asset Core Plus Bond Fund (ETF Series)

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:

1. the Past Performance Relief is granted, provided that:

(a) the Fund Communications of each series of each Continuing Fund include the applicable past performance data of the corresponding series of the corresponding Terminating ETF prepared in accordance with Part 15 of NI 81-102;

(b) the simplified prospectus of the Continuing Funds:

(i) includes information about the ETF Series of each Continuing Fund that is based on the information disclosed in the prospectus for the corresponding Terminating ETF, until such time as the Continuing Fund has information regarding the ETF Series based on its own operations for the applicable periods;

(ii) states that the start date for the ETF Series of each Continuing Fund is the start date of the corresponding Terminating ETF; and

(iii) discloses the Merger where the start date for each series of each Continuing Fund is stated;

(c) the ETF Facts for the ETF Series of each Continuing Fund:

(i) includes information that is based on the information disclosed in the ETF Facts for the corresponding Terminating ETF, until such time as the Continuing Fund has information regarding the ETF Series based on its own operations for the applicable periods prepared in accordance with Part 15 of NI 81-102; and

(ii) states that the "Date series started" date is the "Date series started" date of the corresponding Terminating ETF;

(iii) discloses the Merger where the "Date series started" date is stated; and

(d) each Continuing Fund prepares its MRFPs in accordance with the Continuous Disclosure Relief; and

2. the Continuous Disclosure Relief is granted, provided that:

(a) the MRFPs and financial statements for the Continuing Funds include the Financial Data of the Terminating ETFs pertaining to the corresponding Terminating ETFs and disclose the Mergers for the relevant time periods; and

(b) the Continuing Funds prepare their simplified prospectus, ETF Facts and other Fund Communications in accordance with the Past Performance Relief.

"Darren McKall"

Investment Funds and Structured Products

Ontario Securities Commission

Application File #: 2023/0064

SEDAR File #: 3488507

SCHEDULE "A"

The Continuing Funds

Franklin Bissett Core Plus Bond Fund

Franklin Bissett Corporate Bond Fund

Franklin Bissett Short Duration Bond Fund

Franklin Brandywine Global Sustainable Income Optimiser Fund

Franklin ClearBridge Sustainable Global Infrastructure Income Fund

Franklin ClearBridge Sustainable International Growth Fund

Franklin Global Growth Fund

Franklin Innovation Fund

Franklin Western Asset Core Plus Bond Fund