Horizons ETFs Management (Canada) Inc.
Horizons ETFs Management (Canada) Inc. and the Funds Listed in Schedule A
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 lapse dates of five fund prospectuses to be extended by 91, 71, 33, 25 and 12 days, respectively, to facilitate combination of funds' prospectuses with three other prospectuses of funds under common management -- no conditions.
Applicable Legislative Provisions
Securities Act (Ontario), R.S.O. 1990, c. S.5, as am., s. 62(5).
December 15, 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 HORIZONS ETFS MANAGEMENT (CANADA) INC. (the Filer) AND IN THE MATTER OF THE FUNDS LISTED IN SCHEDULE A (THE FUNDS)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds 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 the Psychedelic ETF (as defined in Schedule A) dated January 20, 2021 (the Psychedelic Prospectus), long form prospectus of the Bitcoin ETF (as defined in Schedule A) dated March 5, 2021 (the Bitcoin Prospectus), long form prospectus of the April 2021 ETFs (as defined in Schedule A) dated April 5, 2021 (the April 2021 Prospectus), the long form prospectus of the Green Bond ETF (as defined in Schedule A) dated May 21, 2021 (the Green Bond Prospectus) and long form prospectus of the June 2021 ETFs (as defined in Schedule A) dated June 3, 2021 (the June 2021 Prospectus and, together with the Psychedelic Prospectus, the Bitcoin Prospectus, the April 2021 Prospectus and the Green Bond Prospectus, the Prospectuses) be extended to those time limits that would apply if the lapse dates of the Prospectuses were April 21, 2022 (in the case of the Psychedelic Prospectus), April 7, 2022 (in the case of the Bitcoin Prospectus) and June 15, 2022 (in the case of the April 2021 Prospectus, the Green Bond Prospectus and the June 2021 Prospectus) (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(i) the Ontario Securities Commission is the principal regulator for this application; and
(ii) 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:
1. The Filer is a corporation incorporated under the laws of Canada. The Filer's head office is located in Toronto, Ontario.
2. The Filer is registered as a portfolio manager in Alberta, British Columbia, Ontario and Québec, an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan, a commodity trading manager and a commodity trading adviser in Ontario and an investment fund manager in each of Ontario, Québec and Newfoundland and Labrador.
3. The Filer is the investment fund manager of the Funds.
4. Each of the Funds is an exchange-traded mutual fund (ETF) established under the laws of Ontario, and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
5. Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions.
6. The Funds currently distribute securities in the Jurisdictions under the Prospectuses. Securities of each of the Funds, except for the Psychedelic ETF, trade on the Toronto Stock Exchange. Securities of the Psychedelic ETF trade on the Neo Exchange Inc.
7. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the respective lapse dates of the Psychedelic Prospectus, Bitcoin Prospectus, April 2021 Prospectus, Green Bond Prospectus and June 2021 Prospectus are January 20, 2022, March 5, 2022, April 5, 2022, May 21, 2022 and June 3, 2022 (each a Lapse Date, and collectively, the Lapse Dates). Accordingly, under subsection 62(2) of the Act, the distribution of securities of each of the Funds would have to cease on the applicable Lapse Date unless: (i) each of the Funds files a pro forma prospectus at least 30 days prior to the applicable Lapse Date; (ii) the final prospectus is filed no later than 10 days after the applicable Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days of the applicable Lapse Date.
8. The Filer is the investment fund manager of (i) one other ETF (the US Marijuana ETF) that currently distributes its securities to the public under a prospectus that has a lapse date of April 21, 2022 (the US Marijuana Prospectus) (ii) one other ETF (the Inverse Bitcoin ETF) that currently distribute its securities to the public under a prospectus that has a lapse date of April 7, 2021 (the Inverse Bitcoin Prospectus) and (iii) three other ETFs (the June 15 Funds) that currently distribute their securities to the public under a prospectus that has a lapse date of June 15, 2022 (the June 15 Prospectus).
9. The Filer wishes to combine the (i) Psychedelic Prospectus with the US Marijuana Prospectus, (ii) the Bitcoin Prospectus with the Inverse Bitcoin Prospectus and (iii) the April 2021 Prospectus, the Green Bond Prospectus and the June 2021 Prospectus with the June 15 Prospectus, in order to reduce renewal and related costs of the Funds and the US Marijuana ETF, the Inverse Bitcoin ETF and the June 15 Funds, as applicable.
10. Offering (i) the Psychedelic ETF and US Marijuana ETF under one prospectus, (ii) the Bitcoin ETF and the Inverse Bitcoin ETF under one prospectus and (iii) the April 2021 ETFs, the Green Bond ETF, the June 2021 ETFs and the June 15 Funds under one prospectus, would facilitate the distribution of the Funds in the Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer's fund platform. As the Funds, the US Marijuana ETF, the Inverse Bitcoin ETF and the June 15 Funds are all managed by the Filer, offering them under three prospectuses (as opposed to eight) will allow investors to more easily compare their features.
11. It would be unreasonable to incur the costs and expenses associated with preparing eight separate renewal prospectuses given how close in proximity the Lapse Dates are to one another.
12. There have been no material changes in the affairs of each Fund since the date of the applicable Prospectus, other than those for which amendments have been filed. Accordingly, the Prospectus and current ETF Facts of each Fund represents current information regarding such Fund.
13. Given the disclosure obligations of the Funds, should a material change in the affairs of any of the Funds occur, the Prospectus and current ETF facts document(s) of the applicable Fund(s) will be amended as required under the Legislation.
14. New investors in the Funds will receive the most recently filed ETF facts document(s) of the applicable Fund(s). The Prospectuses will still be available upon request.
15. The Exemption Sought will not affect the accuracy of the information contained in the Prospectuses 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.