First Asset Investment Management Inc. et al.

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to exchange traded mutual funds for extension of lapse date of their prospectus – Filer will incorporate offering of the ETFs under the same offering documents as related family of funds when they are renewed – 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).

December 5, 2018

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
FIRST ASSET INVESTMENT MANAGEMENT INC.
(the Filer)

AND

IN THE MATTER OF
FIRST ASSET CORE CANADIAN EQUITY ETF,
FIRST ASSET CORE U.S. EQUITY ETF AND
FIRST ASSET ACTIVE CREDIT ETF
(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 time limits for the renewal of the prospectuses of the Funds, each dated February 1, 2018 (the Prospectuses) be extended to those time limits that would apply if the lapse date were April 27, 2019 (the Requested Relief).

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

(a)           the Ontario Securities Commission is the principal regulator for the application; and

(b)           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 all of the provinces and territories of Canada other than the Jurisdiction (together with the Jurisdiction, 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 Ontario. The Filer’s head office is located in Toronto, Ontario.

2.             The Filer is registered as a portfolio manager in Ontario and as an investment fund manager under the securities legislation of each of Ontario, Québec and Newfoundland and Labrador. The Filer is the investment fund manager of each Fund.

3.             Each Fund 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.

4.             None of the Filer or the Funds is in default of securities legislation in any of the Jurisdictions.

5.             The Funds currently distribute securities in the Jurisdictions under the Prospectuses, and units of the Funds trade on the Toronto Stock Exchange.

6.             Pursuant to subsection 62(1) of the Act, the lapse date of each Prospectus is February 1, 2019 (the Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Funds would have to cease on the Lapse Date unless: (i) each Fund files a pro forma prospectus at least 30 days prior to February 1, 2019; (ii) the final prospectus is filed no later than 10 days after February 1, 2019; and (iii) a receipt for the final prospectus is obtained within 20 days of February 1, 2019.

7.             The Filer is also the investment fund manager of 16 other ETFs (the Affiliated Funds) that currently distribute their securities to the public under a prospectus that has a lapse date of April 27, 2019 (the Master Prospectus).

8.             As part of the renewal of the Master Prospectus in 2019, the Filer intends to consolidate the prospectus of all its ETFs into the Master Prospectus, such that all ETFs for which the Filer acts as investment fund manager will be offered under the Master Prospectus.

9.             Offering the Funds under the same prospectus as the other ETFs would assist in disseminating information with respect to the ETFs in matters such as switching between a Fund and the other exchange-traded funds. Further, the Affiliated Funds share many common operational and administrative features with the Funds, and combining them in the same prospectus will allow investors to more easily compare their features.

10.          Accordingly, the Filer would like to extend the times provided in subsection 62(2) of the Act in respect of the Lapse Date to those times that would apply if the Lapse Date were April 27, 2019, in order to permit the Filer to combine the Prospectuses with the Master Prospectus.

11.          It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the Master Prospectus, and unreasonable to incur the costs and expenses associated therewith, so that the Master Prospectus can be filed on or before the Lapse Date.

12.          Further, the Filer may make minor changes to the features of the Affiliated Funds as part of the process of renewing the Master Prospectus. The ability to incorporate the Funds into the Master Prospectus will ensure that the Filer can make the operational and administrative features of the Funds and the Affiliated Funds consistent with each other, if necessary.

13.          There have been no material changes in the affairs of the Funds since the date of the Prospectuses. Accordingly, the Prospectus and current ETF Facts of each Fund represent current information regarding the Fund.

14.          Given the disclosure obligations of the Funds, should any material changes occur, the applicable Prospectus will be amended as required under the Legislation.

15.          New investors of the Funds will receive delivery of the most recently filed ETF Facts of the applicable Fund(s). The Prospectus will still be available upon request.

16.          The Requested Relief will not affect the accuracy of the information contained in the Prospectus 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 Requested Relief is granted.

“Darren McKall”
Manager
Investment Funds and Structured Products
Ontario Securities Commission