FT Portfolios Canada Co.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted under subsection 62(5) of the Securities Act (Ontario) to mutual funds to permit extensions of the lapse dates of their prospectuses.

Applicable Legislative Provisions

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

January 6, 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 FT Portfolios Canada Co. (the Filer) and First Trust JFL Fixed Income Core Plus ETF, First Trust JFL Global Equity ETF, First Trust Indxx Innovative Transaction & Process 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 prospectus of (a) the First Trust JFL Fixed Income Core Plus ETF and First Trust JFL Global Equity ETF (collectively, the JFL ETFs) dated January 21, 2021 be extended to those time limits that would apply if the lapse date was April 14, 2022 and (b) the First Trust Indxx Innovative Transaction & Process ETF (the Indxx ETF) dated March 18, 2021 be extended to those time limits that would apply if the lapse date was April 15, 2022 (together, the Requested Relief).
  2. Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
    1. the Ontario Securities Commission is the principal regulator for this application; and
    2. 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 Nova Scotia.
  2. The Filer’s head office is located in Toronto, Ontario.
  3. The Filer is registered as (a) an investment fund manager and mutual fund dealer in the provinces of Ontario and Newfoundland and Labrador and (b) as a mutual fund dealer in the province of Quebec.
  4. The Filer is the trustee and manager of the Funds.
  5. Each of the Funds is (a) an exchange-traded 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 JFL ETF currently distributes its securities in the Jurisdictions pursuant to a long-form prospectus dated January 21, 2021 (the Current JFL Prospectus).
  8. The lapse date of the Current JFL Prospectus under the Legislation is January 21, 2022 (the Current JFL Lapse Date). Accordingly, under subsection 62(2) of the Securities Act (Ontario) (the Act), the distribution of securities of the JFL ETFs would have to cease on the Current JFL Lapse Date unless: (i) the JFL ETFs file a pro forma long-form prospectus at least 30 days prior to the Current JFL Lapse Date; (ii) the final prospectus of the JFL ETFs is filed no later than 10 days after the Current JFL Lapse Date; and (iii) a receipt for the final prospectus of the JFL ETFs is obtained within 20 days after the Current JFL Lapse Date.
  9. Pursuant to subsection 62(1) of the Act, the lapse date of the current prospectus of the funds listed in Schedule A (the Other Non-Index ETFs) under the Legislation is April 23, 2022.
  10. The Indxx ETF currently distributes its securities in the Jurisdictions pursuant to a long-form prospectus dated March 18, 2021 (the Current Indxx Prospectus).
  11. The lapse date of the Current Indxx Prospectus under the Legislation is March 18, 2022 (the Current Indxx Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Indxx ETF would have to cease on the Current Indxx Lapse Date unless: (i) the Indxx ETF files a pro forma long-form prospectus at least 30 days prior to the Current Indxx Lapse Date; (ii) the final prospectus of the Indxx ETF is filed no later than 10 days after the Current Indxx Lapse Date; and (iii) a receipt for the final prospectus of the Indxx ETF is obtained within 20 days after the Current Indxx Lapse Date.
  12. Pursuant to subsection 62(1) of the Act, the lapse date of the current prospectus of the funds listed in Schedule B (the Other Index ETFs and together with the Other Non-Index ETFs, the Other Funds) under the Legislation is April 15, 2022.
  13. The Filer wishes to combine (a) the Current JFL Prospectus of the JFL ETFs with the current prospectus of the Other Non-Index ETFs and (b) the Current Indxx Prospectus of the Indxx ETF with the current prospectus of the Other Index ETFs, in each case, in order to reduce renewal, printing and related costs of the Funds and the Other Funds. Offering (a) the JFL ETFs and the Other Non-Index ETF under one prospectus and (b) the Indxx ETF and the Other Index ETF under one prospectus would, in each case, facilitate the distribution of (a) the JFL ETF and the Other Non-Index ETFs and (b) the Indxx ETF and the Other Index ETFs, respectively, in the Jurisdictions, in each case, under the same prospectus and 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 two prospectuses (one prospectus which includes passively managed funds and one that includes actively managed funds) would allow investors to more easily compare the features of the Funds and the Other Funds, as applicable.
  14. It would be unreasonable to incur the costs and expenses associated with preparing four separate renewal prospectuses given how close in proximity the lapse date of (a) the Current JFL Prospectus and the lapse date of the current prospectus of the Other Non-Index ETFs and (b) the Current Indxx Prospectus and the lapse date of the current prospectus of the Other Index ETFs are to one another.
  15. There have been no material changes in the affairs of the Funds since the date of the Current JFL Prospectus or Current Indxx Prospectus. Accordingly, the Current JFL Prospectus, the Current Indxx Prospectus and current ETF Facts of the Funds, as applicable, represent the current information of the Funds.
  16. Given the disclosure obligation of the Funds, should any material changes occur, the Current JFL Prospectus or the Current Indxx Prospectus, as applicable, and the current ETF Facts of the Fund(s) will be amended as required under the Legislation.
  17. New investors in the Funds will receive delivery of the most recently filed ETF Facts of the applicable Fund(s). The Current JFL Prospectus and the Current Indxx Prospectus will still be available upon request.
  18. The Requested Relief will not affect the accuracy of the information contained in the Current JFL Prospectus or the Current Indxx 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 Branch
Ontario Securities Commission
Application File #: 2021/0679