National Bank Investments Inc. and Evovest Global Equity ETF

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to exchange-traded fund for 72-day extension of the lapse date of prospectus -- Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectus.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).

November 20, 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)

AND

IN THE MATTER OF
EVOVEST GLOBAL EQUITY ETF
(the ETF)

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 the ETF for a decision under the securities legislation of the Jurisdictions (the Legislation) to permit the ETF to extend the time limits for the renewal of the ETF Prospectus (the Prospectus) as if its lapse date was May 10, 2025 (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 (c. V-1.1, r. 1) (Regulation 11-102) is intended to be relied upon in each of the other provinces and territories 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 81-102 respecting Investment Funds (V-1.1, r. 39) (Regulation 81-102), Regulation 14-101 respecting Definitions (c. V-1.1, r. 3) and Regulation 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:

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 of Canada.

3. The Filer is the investment fund manager of the ETF.

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

The ETF

5. The ETF is a mutual fund governed by the provisions of Regulation 81-102 and established under the laws of Ontario.

6. Securities of the ETF are offered by long form prospectus dated February 27, 2024 and prepared pursuant to Regulation 41-101 respecting General Prospectus Requirements (V-1.1, r.14) (Regulation 41-101) and Form 41-101F2 Information Required in an Investment Fund Prospectus, which is filed in one or more jurisdiction of Canada. Accordingly, the ETF is a reporting issuer or the equivalent in one or more jurisdiction of Canada.

7. The ETF is not in default of securities legislation in any of the jurisdictions of Canada.

8. Pursuant to section 62(1) of the Securities Act (Ontario) (R.S.O. 1990, c. S.5) and section 17.2(2) of Regulation 41-101, the lapse date for the Prospectus is February 27, 2025 (the Current Lapse Date). In accordance with applicable securities legislation, the distribution of securities of ETF would have to cease on the Current Lapse Date unless (i) a pro forma prospectus is delivered not less than 30 days before the Current Lapse Date (i.e. by January 28, 2025); (ii) a final prospectus is filed no later than 10 days after the Current Lapse Date (i.e. by March 9, 2025); and (iii) a receipt for such final prospectus is obtained within 20 days of the Current Lapse Date (i.e. March 19, 2025).

9. Pursuant to sections 10.1(1), 10.1(1.1) and 10.1(2) of Regulation 41-101, the ETF must file a written consent provided by its auditor no later than March 9, 2025, 10 days after the Current Lapse Date.

10. The fiscal year-end of the ETF is December 31 and, pursuant to section 2.2 of Regulation 81-106 respecting Investment Fund Continuous Disclosure (V-1.1, r. 42), the annual financial statements and auditor's report are required to be filed on or before the 90th day after the ETF's most recently completed financial year, which for the ETF will be December 31, 2024 (the 2024 Fiscal Year-End).

11. Pursuant to section 4.3(1) of Regulation 41-101 and given the 2024 Fiscal Year-End, the ETF's auditor will be required to review the ETF's unaudited interim financial statements (i.e. as at June 30, 2024).

Renewal Filings

12. The Filer must file annual financial statements and ETF Facts for the ETF for the 2024 Fiscal Year-End by no later than March 31, 2025, which date is after the Current Lapse Date.

13. Considering the time required by the auditors and resources to prepare the Prospectus documents commencing from the 2024 Fiscal Year-End, it is impractical and unworkable to have the Prospectus documents, including the auditor's written consent, audited financial statements and auditor's report, by March 9, 2025.

14. As audited financial statements will not be ready by the Current Lapse Date, the ETF currently will need to incorporate by reference unaudited interim financial information (as at June 30, 2024) into the Prospectus documents. In order to include or incorporate by reference the interim unaudited financial statements into the Prospectus documents, those interim unaudited financial statements must be reviewed by the ETF's auditor in accordance with the relevant standards set out in the Handbook of the Canadian Institute of Chartered Accountants for a review of financial statements.

15. Given that the audited financial statements of the ETF will be available no later than March 31, 2025, which is only a few weeks following the filing of the Prospectus documents pursuant to the Current Lapse Date, this review of the interim unaudited financial statements will incur time and expenses which will only be relevant for a short period of time.

16. Extending the Current Lapse Date to May 10, 2025 will provide the time necessary for the ETF's auditor to complete the audit of the ETF's financial statements for the 2024 Fiscal Year-End and provide its written consent as required by Regulation 41-101, and enable the Filer to renew the Prospectus and ETF Facts on a timeline that allows the inclusion of the most current audited financial information each year. In doing so, it will be more efficient and remove unnecessary financial burden on the ETF which is indirectly borne by the ETF's securityholders.

17. There have been no material changes in the affairs of the ETF since the Prospectus date, i.e February 27, 2024. Accordingly, the Prospectus and ETF Facts continue to provide accurate information regarding the ETF. Given the disclosure obligations of the Filer and ETF, should any changes occur, the Prospectus and ETF Facts would be amended accordingly.

18. The Exemption Sought will not affect the reliability and accuracy of the information contained in the Prospectus and will therefore not be prejudicial to the public and the ETF's securityholders' best interests.

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.

"Bruno Vilone"
Director, Investment Products Oversight