Purpose Investments Inc. et al.

Decision

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 extension of lapse date of funds' prospectus to facilitate its combination with the prospectus of other funds under common management.

Applicable Legislative Provisions

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

August 31, 2022

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 PURPOSE INVESTMENTS INC. (the Filer) AND PURPOSE BITCOIN ETF PURPOSE ETHER ETF (collectively, the Funds)

DECISION

I. BACKGROUND

1. 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 time limits for the renewal of the simplified prospectus of the Funds dated October 1, 2021 be extended to those time limits that would apply if the lapse date was November 19, 2022 (the Requested Relief).

2. 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 in each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).

II. INTERPRETATION

Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.

III. REPRESENTATIONS

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation existing under the laws of the Province of Ontario.

2. The Filer's head office is located in Toronto, Ontario.

3. The Filer is registered as (a) an investment fund manager, exempt market dealer, portfolio manager and commodity trading manager in the province of Ontario, (b) an investment fund manager and exempt market dealer in the provinces of Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan, and (c) an investment fund manager, exempt market dealer and portfolio manager in British Columbia and Quebec.

4. The Filer is the trustee and manager of the Funds.

5. Each of the Funds is (a) a mutual fund established under the laws of the province of Ontario and (b) a reporting issuer as defined in the securities legislation of each of the Jurisdictions.

6. Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions.

7. Each Fund currently distributes its mutual fund units in the Jurisdictions pursuant to a simplified prospectus and annual information form each dated October 1, 2021 (the Current Prospectus) and its exchange-traded units in the Jurisdictions pursuant to a long form prospectus dated February 11, 2022 (the Current ETF Prospectus).

8. The lapse date of the Current Prospectus under the Legislation is October 1, 2022 (the Current Lapse Date). Accordingly, under subsection 62(2) of the Securities Act (Ontario) (the Act), the distribution of the mutual fund units of the Funds would have to cease on the Current Lapse Date unless: (i) the Funds file a pro forma simplified prospectus at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus of the Funds is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final simplified prospectus of the Funds is obtained within 20 days after the Current Lapse Date.

9. Pursuant to subsection 62(1) of the Act, the lapse date of the current simplified prospectus of the funds listed in Schedule A (the Other Funds) under the Legislation is November 19, 2022.

10. The Filer wishes to combine the Current Prospectus of the Funds with the current prospectus of the Other Funds in order to reduce renewal, printing and related costs of the Funds and the Other Funds. The Filer will at the same time renew the Current ETF Prospectus and combine it with the current prospectus of the Other Funds in order to facilitate the distribution of both the mutual fund units and exchange-traded units of the Funds in the Jurisdictions under the same prospectus. This combination of the Current Prospectus and Current ETF Prospectus with the prospectus of the Other Funds will enable the Filer to streamline disclosure across the Filer's fund platform. As the Funds and the Other Funds are managed by the Filer and are established under the same declaration of trust offering them under the same simplified prospectus would allow investors to more easily compare the features of the Funds and the Other Funds.

11. It would be unreasonable to incur the costs and expenses associated with preparing two separate renewal simplified prospectuses given how close in proximity the lapse date of the Current Prospectus and the lapse date of the current simplified prospectus of the Other Funds are to one another.

12. There have been no material changes in the affairs of the Funds since the date of the Current Prospectus. Accordingly, the Current Prospectus and current Fund Facts represent the current information of the mutual fund units of the Funds.

13. Given the disclosure obligation of the Funds, should any material changes occur to the mutual fund units of the Funds, the Current Prospectus and the current Fund Facts of the Funds will be amended as required under the Legislation.

14. New investors in the mutual fund units of the Funds will receive delivery of the most recently filed Fund Facts of the applicable Fund(s). The Current Prospectus will still be available upon request.

15. The Requested Relief will not affect the accuracy of the information contained in the Current Prospectus and therefore will not be prejudicial to the public interest.

IV. 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 Requested Relief is granted.

"Darren McKall"

Manager, Investment Funds and Structured Products

Ontario Securities Commission

 

Application File #: 2022/0369

 

SCHEDULE A

THE OTHER FUNDS

Purpose Bitcoin Yield ETF

Purpose Ether Yield ETF

Purpose Crypto Opportunities ETF