National Bank Investment Inc. and the NBI Funds

Headnote

Policy Statement 11-203 Process for Exemptive Relief Applications in Multiple Jurisdiction -- Relief granted to permit extension of simplified prospectus lapse date to accommodate timing of proposed fund mergers.

Applicable legislation/Regulatory Instrument

Securities Act, RSO 1990, c. S.5, s. 62(5).

May 6, 2021

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF NATIONAL BANK INVESTMENT INC. (the Filer) AND IN THE MATTER OF THE NBI FUNDS SET OUT IN APPENDIX "A" (collectively, the "Funds" and individually, a Fund)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a Decision Maker) has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdictions (the Legislation) to permit the Funds to extend the time limits for the renewal of the simplified prospectus, annual information form and fund facts documents of the Funds (the Prospectus Documents) as if the lapse date was June 7, 2021 (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the Filer has provided notice that subsection 4.7(1) of Regulation 11-102 respecting Passport System, CQLR c. V-1.1, r.1 (Regulation 11-102) is intended to be relief upon in the jurisdictions of Canada other than the Jurisdictions; and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, CQLR c. V-1.1, r.3, Regulation 11-102, Regulation 81-101 respecting Mutual Fund Prospectus Disclosure, CQLR V-1.1, r. 38 (Regulation 81-101) andRegulation 81-102 respecting Investment Funds, CQLR c. V-1.1, r. 39 (Regulation 81-102) 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 governed by the laws of Canada with its head office in Montréal (Québec).

2. The Filer acts as the investment fund manager of the Funds and is registered as an investment fund manager in each of the provinces of Québec, Ontario and Newfoundland and Labrador.

3. Neither the Filer nor the Funds are in default of securities legislation in any jurisdiction of Canada.

The Funds

4. The Funds are either open-ended mutual funds established as trusts under the laws of Ontario or Québec, or a class of a mutual fund corporation governed under the laws of Canada.

5. Securities of the Funds are currently qualified for distribution in each of the jurisdictions of Canada under the current Prospectus Documents of the Funds dated May 14, 2020, as amended on July 21, 2020, October 9, 2020, November 18, 2020, February 11, 2021 and March 9, 2021.

6. The Funds are reporting issuers under the laws of each jurisdiction of Canada.

7. The lapse date for the current Prospectus Documents is May 14, 2021 (the Current Lapse Date). Accordingly, pursuant to section 62(1) of the Securities Act (Ontario) (R.S.O. 1990, c. S.5) and section 2.5(4) of Regulation 81-101, the distribution of securities of the Funds would have to cease on the Current Lapse Date unless : i) a pro forma simplified prospectus is filed at least 30 days prior to the Current Lapse Date (i.e. by April 14, 2021); ii) a final simplified prospectus is filed no later than 10 days after the Current Lapse Date (i.e. May 24, 2021); and iii) a receipt for the final simplified prospectus is obtained within 20 days after the Current Lapse Date (i.e. by June 3, 2021).

Fund Mergers

8. The Filer is proposing fund mergers (the Mergers) that impact the Funds as identified in Appendix A (the Terminating Funds) and which, should they occur, will take effect after the Current Lapse Date but not later than June 4, 2021.

9. If the Exemption Sought is not granted, it will be necessary to renew the Prospectus Documents of the Terminating Funds within a short period of time prior to the Merger of such Terminating Funds.

10. The Mergers will be effected in accordance with the requirements of Regulation 81-102 including, without limitation, obtaining any required securityholder approval at a special meeting (the Special Meeting) to be held on or about May 17, 2021 and obtaining any required regulatory approval.

Reasons for Exemption Sought

11. The Filer wishes to extend the lapse date of the current Prospectus Documents to provide it with sufficient time to adequately reflect the voting results of the Special Meeting, by removing the Terminating Funds from the final Prospectus Documents, and thus avoid the need to include the Terminating Funds in the final Prospectus Documents given that they will be terminated within two weeks following the Current Lapse Date.

12. Given the Current Lapse Date, an extension of the Current Lapse Date to June 7, 2021 is minimal and is not disadvantageous to the Funds' investors.

13. Because the Filer does not know whether it will obtain securityholder approval for all of the Mergers at the Special Meeting, it has filed a proforma Prospectus Documents on March 31, 2021, in respect of all the Funds, and proposes that, after the Special Meeting, it will file the final Prospectus Documents, removing those Terminating Funds that obtained securityholder approval for the Mergers and thus will not continue after the Mergers.

14. Provided the required approvals for the Mergers are obtained and the Terminating Funds are removed from the final Prospectus Documents, the only distribution of securities of the Terminating Funds that is expected to occur following the Current Lapse Date will be purchases related to systematic investment programs and the reinvestment of distributions.

15. Since the date of the current Prospectus Documents, no undisclosed material change has occurred in respect of the Funds. Accordingly, the current Prospectus Documents continue to provide up-to-date information regarding the Funds.

16. New investors in the Funds will receive delivery of the most recently filed fund facts documents of the applicable Funds and the current Prospectus Documents of the Funds will remain available to investors upon request.

17. The Filer submits the Exemption Sought will not affect the accuracy of the information contained in the current Prospectus Documents of the Funds, and therefore will not be prejudicial to the public interest.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.

Annex A

The Funds

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