Franklin Templeton Investments Corp. et al.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to mutual funds for extension of lapse date of their prospectus for 49 days – Filer will incorporate offering of the mutual funds 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).
February 6, 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
FRANKLIN TEMPLETON INVESTMENTS CORP.
(the Filer)
AND
IN THE MATTER OF
FT BALANCED GROWTH POOL,
FT BALANCED INCOME POOL AND
FT GROWTH POOL
(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 simplified prospectus of the Funds dated April 18, 2017 be extended to those time limits that would apply if the lapse date was June 6, 2018 (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 this application; and
b) the Filer has provided notice that sub-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 Jurisdic-tions).
Interpretation
Defined terms contained 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 amalgamated under the laws of Ontario. The Filer’s head office is located in Toronto, Ontario.
2. The Filer is registered as an investment fund manager in Ontario, Quebec, Alberta, British Columbia, Manitoba, Nova Scotia, and Newfoundland and Labrador, as a mutual fund dealer, portfolio manager and exempt market dealer in each province of Canada and the Yukon, and as a commodity trading manager in Ontario.
3. Each Fund is a mutual fund trust governed by the laws of the Province of Ontario and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
4. Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions.
5. Each Fund currently distributes its securities in the Jurisdictions pursuant to a simplified prospectus dated April 18, 2017, as amended and restated on May 25, 2017 and as amended by amendment no. 1 dated October 4, 2017, and annual information form dated April 18, 2017, as amended and restated on May 25, 2017 and as amended by amendment no. 1 dated October 4, 2017 (collectively, the Current Prospectus).
6. The lapse date of the Current Prospectus under the Legislation is April 18, 2018 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of securities of the Fund would have to cease on the Current Lapse Date unless: (i) the Fund files a pro forma simplified prospectus at least 30 days prior to the Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days after the Current Lapse Date.
7. The Filer is the manager and trustee of the Funds. The Filer is also the manager of, amongst other funds, 73 funds which are offered in each of the provinces and territories of Canada under its largest simplified prospectus dated June 6, 2017, the lapse date of which is June 6, 2018 (the Other Funds).
8. The Filer wishes to combine the Current Pros-pectus of the Funds with the simplified prospectus of the Other Funds in order to reduce the cost of renewing the Current Prospectus of the Funds and on-going printing and related costs. Offering the Funds under the same prospectus as the Other Funds would facilitate the distribution of the Funds in the Jurisdictions under the same simplified prospectus.
9. It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal simplified pros-pectus, annual information form and Fund Facts of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the renewal simplified prospectus of the Other Funds can be filed earlier with the renewal simplified prospectus of the Funds. As the sim-plified prospectus of the Other Funds is a large document and there is an in-depth internal review process that the Filer undertakes when renewing that document, the Filer would not have sufficient time to finalize and file the pro forma simplified prospectus of the Other Funds by at least 30 days prior to the Current Lapse Date.
10. If the Exemption Sought is not granted, it will be necessary to renew the simplified prospectus and associated documents of the Funds twice within a short period of time in order to consolidate the simplified prospectus of the Funds with the simplified prospectus of the Other Funds.
11. There have been no material changes in the affairs of the Funds since the date of the Current Prospectus, other than those for which amend-ments have been filed. Accordingly, the Current Prospectus represents the current information of the Funds. In addition, the most recently filed Fund Facts of the Funds provides even more
current information to investors regarding the Funds.
12. Given the disclosure obligation of the Funds, should any material changes occur, the Current Prospectus of the Funds will be amended as required under the Legislation.
13. New investors of the Funds will receive delivery of the most recently filed Fund Facts of the Funds. The Current Prospectus of the Funds will still be available upon request.
14. 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.
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.
“Vera Nunes”
Manager, Investment Funds and Structured Products
Ontario Securities Commission