National Bank Investments Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to facilitate the offering of exchange-traded fund securities and conventional mutual fund securities under the same form of prospectus -- Relief granted from the requirement in National Instrument 41-101 to file a long form prospectus for exchange-traded fund securities provided that a simplified prospectus is prepared and filed in accordance with National Instrument 81-101 and the filer includes disclosure required pursuant to Form 41-101F2 that is not contemplated by Form 81-101F1 in respect of the exchange-traded fund securities -- Filer will file ETF Facts in the form prescribed by Form 41-101F4 in respect of exchange-traded fund securities of a fund and will file a Fund Facts document in the form prescribed by Form 81-101F3 in respect of conventional mutual fund securities of a fund -- Technical relief granted from Parts 9, 10 and 14 of National Instrument 81-102 to permit each fund to treat its exchange-traded fund securities and conventional mutual fund securities as separate mutual funds for the purpose of compliance with Parts 9, 10 and 14 of National Instrument 81-102.

Applicable Legislative Provisions

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

National Instrument81-102 Investment Funds, Parts 9, 10 and 14 and s. 19.1.

October 31, 2024

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 INVESTMENTS INC.
(the "Filer")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a "Decision Maker") has received an application (the "Application") from the Filer on behalf of each of the Existing Funds (as defined below) and such other mutual funds as are managed or may be managed by the Filer now or in the future that offer ETF Securities (as defined below) either alone or along with Mutual Fund Securities (as defined below) (collectively, the Future Funds and together with the Existing Funds, the Funds, and each, a Fund), for a decision under the securities legislation of the Jurisdictions (the "Legislation") granting exemptive relief that:

a) exempts the Filer and each Fund from the requirement in subsection 3.1(2) of Regulation 41-101 General Prospectus Requirements (c. V-1.1, r. 14) ("Regulation 41-101") to prepare and file a long form prospectus for the ETF Securities in the form prescribed by Form 41-101F2 Information Required in an Investment Fund Prospectus ("Form 41-101F2") provided that the Filer files (i) a prospectus for the ETF Securities in accordance with the provisions of Regulation 81-101 Mutual Fund Prospectus Disclosure (c. V-1.1, r. 38) ("Regulation 81-10"), other than the requirements pertaining to the filing of a fund facts document; and (ii) an ETF facts document in accordance with Part 3B of Regulation 41-101 (the "ETF Prospectus Form Relief"); and

b) permits the Filer and each Fund that offers both ETF Securities and Mutual Fund Securities to treat the ETF Securities and the Mutual Fund Securities as if such securities were separate funds in connection with their compliance with the provisions (the "Sales and Redemptions Requirements") of Parts 9, 10 and 14 of Regulation 81-102 Investment Funds (c. V-1.1, r. 39) ("Regulation 81-102") (the "Sales and Redemptions Relief", collectively, with the ETF Prospectus Form Relief, 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 the Application;

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

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

Interpretation

Terms defined in Regulation 14-101 respecting Definitions (c. V-1.1, r. 3), Regulation 81-102 and Regulation 11-102 have the same meaning if used in this decision unless otherwise defined herein, and capitalized terms used herein have the meaning ascribed thereto below.

Basket of Securities means, in relation to the ETF Securities of a Fund, a group of some or all of the constituent securities of the Fund, a group of securities or assets representing the constituents of the Fund, or a group of securities selected by the portfolio manager or sub-advisor, as applicable, from time to time.

Dealer means a registered dealer, including National Bank Financial Inc., an affiliate of the Filer, that has entered, or intends to enter, into an agreement with the investment fund manager of a Fund authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more Funds on a continuous basis from time to time.

Designated Broker means National Bank Financial Inc., an affiliate of the Filer and a registered dealer that has entered, or intends to enter, into an agreement with the Filer or an affiliate of the Filer on behalf of a Fund to perform certain duties in relation to the ETF Securities of the Fund, including the posting of a liquid two-way market for the trading of the Fund's ETF Securities on the TSX or another Marketplace.

ETF Facts means an ETF facts document prepared, filed and delivered in accordance with Part 3B of Regulation 41-101.

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

Existing ETFs means the NBI Sustainable Canadian Short Term Bond ETF (NSSB), the NBI Sustainable Canadian Bond ETF (NSCB), the NBI Sustainable Canadian Corporate Bond ETF (NSCC), the NBI High Yield Bond ETF (NHYB), the NBI Unconstrained Fixed Income ETF (NUBF), the NBI Active Canadian Preferred Shares ETF (NPRF), the NBI Canadian Dividend Income ETF (NDIV), the NBI Canadian Family Business ETF (NFAM), the NBI Sustainable Canadian Equity ETF (NSCE), the NBI Active U.S. Equity ETF (NUSA), the NBI Active International Equity ETF (NINT), the NBI Global Real Assets Income ETF (NREA), the NBI Sustainable Global Equity ETF (NSGE) and the NBI Global Private Equity ETF (NGPE).

Existing Funds means the Existing ETFs, the Existing Mutual Funds and the Existing Target Mutual Funds.

Existing Mutual Funds means the NBI Money Market Fund, the NBI Floating Rate Income Fund, the NBI Bond Fund, the NBI Income Fund, the NBI Global Tactical Bond Fund, the NBI Unconstrained Fixed Income Fund, the NBI Corporate Bond Fund, the NBI High Yield Bond Fund, the NBI Preferred Equity Income Fund, the NBI Preferred Equity Fund, the NBI Jarislowsky Fraser Select Income Fund, the NBI Presumed Sound Investments Fund, the NBI Sustainable Canadian Bond Fund, the NBI Canadian Core Plus Bond Fund, the NBI Secure Portfolio, the NBI Conservative Portfolio, the NBI Moderate Portfolio, the NBI Balanced Portfolio, the NBI Growth Portfolio, the NBI Equity Portfolio, the NBI Sustainable Secure Portfolio, the NBI Sustainable Conservative Portfolio, the NBI Sustainable Moderate Portfolio, the NBI Sustainable Balanced Portfolio, the NBI Sustainable Growth Portfolio, the NBI Sustainable Equity Portfolio, the NBI Jarislowsky Fraser Select Balanced Fund, the NBI Tactical Asset Allocation Fund, the NBI Global Balanced Growth Fund, the NBI Canadian Equity Fund, the NBI SmartBeta Low Volatility Canadian Equity Fund, the NBI Canadian All Cap Equity Fund, the NBI Canadian Equity Growth Fund, the NBI Small Cap Fund, the NBI Quebec Growth Fund, the NBI Sustainable Canadian Equity Fund, the NBI SmartBeta Low Volatility Global Equity Fund, the NBI Global Equity Fund, the NBI Global Small Cap Fund, the NBI Active Global Equity Fund, the NBI Global Diversified Equity Fund, the NBI Global Real Assets Income Fund, the NBI SmartData U.S. Equity Fund, the NBI U.S. Equity Fund, the NBI SmartData International Equity Fund, the NBI Active International Equity Fund, the NBI Diversified Emerging Markets Equity Fund, the NBI Sustainable Global Equity Fund, the NBI International Equity Fund, the NBI Resource Fund, the NBI Precious Metals Fund, the NBI Innovators Fund, the NBI Canadian Bond Index Fund, the NBI Canadian Equity Index Fund, the NBI U.S. Equity Index Fund, the NBI International Equity Index Fund, the NBI Canadian Bond Private Portfolio, the NBI Canadian Fixed Income Private Portfolio, the NBI U.S. Bond Private Portfolio, the NBI Corporate Bond Private Portfolio, the NBI Non-Traditional Fixed Income Private Portfolio, the NBI Canadian Preferred Equity Private Portfolio, the NBI Multiple Asset Class Private Portfolio, the NBI Equity Income Private Portfolio, the NBI Canadian Equity Private Portfolio, the NBI Canadian High Conviction Equity Private Portfolio, the NBI Diversified Canadian Equity Private Portfolio the NBI North American Dividend Private Portfolio, the NBI U.S. Equity Private Portfolio, the NBI Diversified U.S. Equity Private Portfolio, the NBI U.S. High Conviction Equity Private Portfolio, the NBI International High Conviction Equity Private Portfolio, the NBI Diversified International Equity Private Portfolio, the NBI Tactical Equity Private Portfolio, the NBI Non-Traditional Capital Appreciation Private Portfolio, the Meritage Canadian Equity Portfolio, the Meritage Global Equity Portfolio, the Meritage American Equity Portfolio, the Meritage International Equity Portfolio, the Meritage Conservative Portfolio, the Meritage Moderate Portfolio, the Meritage Balanced Portfolio, the Meritage Growth Portfolio, the Meritage Growth Plus Portfolio, the Meritage Diversified Fixed Income Portfolio, the Meritage Conservative Income Portfolio, the Meritage Moderate Income Portfolio, the Meritage Balanced Income Portfolio, the Meritage Growth Income Portfolio, the Meritage Growth Plus Income Portfolio, the Meritage Global Conservative Portfolio, the Meritage Global Moderate Portfolio, the Meritage Global Balanced Portfolio, the Meritage Global Growth Portfolio, the Meritage Global Growth Plus Portfolio, the Meritage Tactical ETF Moderate Portfolio, the Meritage Tactical ETF Balanced Portfolio, the Meritage Tactical ETF Growth Portfolio and the Meritage Tactical ETF Equity Portfolio.

Existing Target Mutual Funds means the NBI Target 2025 Investment Grade Bond Fund, the NBI Target 2026 Investment Grade Bond Fund, the NBI Target 2027 Investment Grade Bond Fund, the NBI Target 2028 Investment Grade Bond Fund, the NBI Target 2029 Investment Grade Bond Fund

Form 81-101F1 means Form 81-101F1 Contents of Simplified Prospectus.

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

Legislation means the securities legislation of each of the Jurisdictions, as applicable.

Marketplace means a "marketplace" as defined in Regulation 21-101 Marketplace Operation (c. V-1.1, r. 5) that is located in Canada.

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

Other Dealer means a registered dealer that is not a Dealer or Designated Broker.

Prescribed Number of ETF Securities means, in relation to a Fund, the number of ETF Securities of the Fund determined by the Filer from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.

Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the applicable securities legislation applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.

Securityholders means beneficial or registered holders of Mutual Fund Securities or ETF Securities of a Fund, as applicable.

TSX means the Toronto Stock Exchange.

Representations

This decision is based on the following facts represented by the Filer on behalf of itself and the Funds:

The Filer

1. The Filer is a corporation amalgamated under the laws of Canada with its head office in Montreal, Québec.

2. The Filer is registered as an investment fund manager in Québec, Ontario and Newfoundland and Labrador and as a mutual fund dealer in each of the Jurisdictions in addition to the other provinces and territories of Canada (collectively the "Applicable Jurisdictions").

3. The Filer or an affiliate of the Filer is, or will be, the investment fund manager of the Funds and an affiliate of the Filer or a third-party portfolio manager is, or will be, the portfolio manager of the Funds. The portfolio manager of a Fund may also engage one or more sub-adviser(s) in respect of the investments of such Fund.

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

The Funds

5. Each Fund is, or will be, an investment fund organized and governed by the laws of an Applicable Jurisdiction or the laws of Canada.

6. Each Fund is, or will be, a reporting issuer in each jurisdiction of Canada in which its securities are distributed.

7. Subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities, each Fund is, or will be, subject to Regulation 81-102 and Securityholders will have the right to vote at a meeting of Securityholders in respect of matters prescribed by Regulation 81-102.

8. The Existing ETFs are distributed pursuant to a long form prospectus dated May 10, 2024 in the form prescribed by Form 41-101F2 (the "Long Form Prospectus"). Existing ETF currently offers ETF Securities listed on the TSX.

9. The Existing Mutual Funds are distributed pursuant to a simplified prospectus dated May 9, 2024 in the form prescribed by Form 81-101F1 (the "Existing Mutual Funds Simplified Prospectus").

10. The Existing Target Mutual Funds are distributed pursuant to a simplified prospectus dated June 18, 2024 in the form prescribed by Form 81-101F1 (the "Existing Target Mutual Funds Simplified Prospectus", and collectively with the Existing Mutual Funds Simplified Prospectus, the "Simplified Prospectus").

11. It is expected that when the Simplified Prospectus is renewed in 2025, the Filer will file a pro forma and, as the case may be, preliminary simplified prospectus in the form prescribed by Form 81-101F1, in respect of the Existing Funds, pursuant to which it may offer ETF Securities of the Existing Funds. Fund Facts documents in the form prescribed by Form 81-101F3 Contents of Fund Facts Document ("Form 81-101F3") for each series of Mutual Fund Securities of the Existing Funds and ETF Facts documents in the form prescribed by Form 41-101F4 Information Required in an ETF Facts Document ("Form 41-101F4") for each series of ETF Securities of the Existing Funds will also be filed.

12. The Filer will apply to list any ETF Securities of each of the Funds that relies on the Exemption Sought on the TSX or another Marketplace. In the case of a Future Fund, the Filer will not file a final or amended simplified prospectus for any of the Funds in respect of the ETF Securities until the TSX or other applicable Marketplace has conditionally approved the listing of the ETF Securities.

13. The Existing Funds are not in default of securities legislation in any of the Jurisdictions.

The Exemption Sought

14. Mutual Fund Securities may be subscribed for or purchased directly from a Fund through appropriately registered dealers.

15. ETF Securities will be distributed on a continuous basis in one or more of the Jurisdictions under a simplified prospectus. ETF Securities may generally only be subscribed for or purchased directly from the Funds ("Creation Units") by Dealers or Designated Brokers. Generally, subscriptions or purchases may only be placed for a Prescribed Number of ETF Securities (or a multiple thereof) on any day when there is a trading session on the TSX or other Marketplace. Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of ETF Securities on the TSX or another Marketplace.

16. In addition to subscribing for and reselling their Creation Units, Dealers and Designated Brokers will also generally be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market.

17. Except for Dealer and Designated Broker subscriptions for Creation Units, as described above, ETF Securities generally will not be able to be purchased directly from a Fund. Investors are generally expected to purchase and sell ETF Securities, directly or indirectly, through dealers executing trades through the facilities of the TSX or another Marketplace. ETF Securities may also be issued directly to Securityholders upon a reinvestment of distributions of income or capital gains.

18. Securityholders that are not Designated Brokers or Dealers that wish to dispose of their ETF Securities may generally do so by selling their ETF Securities on the TSX or other Marketplace, through a registered dealer, subject only to customary brokerage commissions. A Securityholder that holds a Prescribed Number of ETF Securities (or multiple thereof) may exchange such ETF Securities for Baskets of Securities and/or cash, securities other than Baskets of Securities and/or cash, or cash only, in the discretion of the Filer. Securityholders may also redeem ETF Securities for cash at a redemption price equal to 95% of the net asset value of the ETF Securities on the date of redemption.

ETF Prospectus Form Relief

19. The Filer believes it is more efficient and expedient to include all series of Mutual Fund Securities and ETF Securities in one prospectus form instead of two different prospectus forms and that this presentation will assist in providing full, true and plain disclosure of all material facts relating to the securities of the Funds by permitting disclosure relating to all series of securities to be included in one prospectus.

20. The Filer will file ETF Facts in the form prescribed by Form 41-101F4 in respect of each class or series of ETF Securities and will file Fund Facts in the form prescribed by Form 81-101F3 in respect of each class or series of Mutual Fund Securities.

21. The Filer will ensure that any additional disclosure included in the simplified prospectus of the Funds relating to the ETF Securities will not interfere with an investor's ability to differentiate between the Mutual Fund Securities and the ETF Securities and their respective attributes.

22. The Funds will comply with the provisions of Regulation 81-101 when filing any prospectus or amendment thereto.

23. The Funds will comply with Part 3B of Regulation 41-101 when preparing, filing and delivering ETF Facts for the ETF Securities of the Funds.

Sales and Redemption Relief

24. Parts 9, 10 and 14 of Regulation 81-102 do not contemplate both Mutual Fund Securities and ETF Securities being offered in a single fund structure. Accordingly, without the Sales and Redemption Relief, the Filer and each Fund that offers both ETF Securities and Mutual Fund Securities would not be able to technically comply with those parts of Regulation 81-102.

25. The Sales and Redemptions Relief will permit the Filer and each Fund that offers both ETF Securities and Mutual Fund Securities to treat the ETF Securities and the Mutual Fund Securities as if such securities were separate funds in connection with their compliance with Parts 9, 10 and 14 of Regulation 81-102. The Sales and Redemptions Relief will enable each of the ETF Securities and Mutual Fund Securities to comply with Parts 9, 10 and 14 of Regulation 81-102, as appropriate, for the type of security being offered.

Decision

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

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

1. in respect of the ETF Prospectus Form Relief, the Filer complies with the following conditions:

a) the Filer files a simplified prospectus in respect of the ETF Securities in accordance with the requirements of Regulation 81-101 and Form 81-101F1, other than the requirements pertaining to the filing of a fund facts document;

b) the Filer includes disclosure required pursuant to Form 41-101F2 (that is not contemplated by Form 81-101F1) in respect of the ETF Securities in each Fund's simplified prospectus; and

c) the Filer includes disclosure regarding this decision under the heading "Additional Information" and "Exemptions and Approvals" in each Fund's simplified prospectus; and

2. in respect of the Sales and Redemptions Relief, the Filer and each Fund comply with the following conditions:

a) with respect to its Mutual Fund Securities, each Fund complies with the provisions of Parts 9, 10 and 14 of Regulation 81-102 that apply to mutual funds that are not exchange-traded mutual funds; and

b) with respect to its ETF Securities, each Fund compiles with the provisions of Parts 9 and 10 of Regulation 81-102 that apply to exchange-traded mutual funds.

"Frédéric Belleau"
Directeur principal des produits d'investissement et de la finance durable
Autorité des marchés financiers

Application File #: 2024/0537
SEDAR+ File #: 6183610