Aviva Investors Canada Inc. -- s. 78(1) and s. 80 of the CFA

Headnote

Section 80 of the Commodity Futures Act (Ontario) (the CFA) -- Relief from the adviser registration requirement of paragraph 22(1)(b) of the CFA granted to a sub-adviser headquartered in a foreign jurisdiction in respect of advice regarding trades in commodity futures contracts and commodity futures options, subject to certain terms and conditions -- Relief mirrors exemption available in section 8.26.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations made under the Securities Act (Ontario) -- Relief is subject to a sunset clause.

Subsection 78(1) of the Commodity Futures Act (Ontario) -- Order also revokes prior order of the Commission dated March 29, 2016, In the Matter of Aviva Investors Canada Inc., Aviva Investors Global Services Limited and Aviva Investors Americas LLC that would otherwise have expired on March 29, 2021.

Applicable Legislative Provisions

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 1(1), 22(1)(b), 78(1) and 80.

Securities Act, R.S.O. 1990, c. S.5, as am., s. 25(3).

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 8.26.1.

Ontario Securities Commission Rule 35-502 Non-Resident Advisers, s. 7.11.

Applicable Orders

In the Matter of Aviva Investors Canada Inc., Aviva Investors Global Services Limited and Aviva Investors Americas LLC, (2016), 39 OSCB 3220

IN THE MATTER OF THE COMMODITY FUTURES ACT, R.S.O. 1990, CHAPTER C.20, AS AMENDED (the CFA) AND IN THE MATTER OF AVIVA INVESTORS CANADA INC., AVIVA INVESTORS GLOBAL SERVICES LIMITED AND AVIVA INVESTORS AMERICAS LLC

ORDER (SUBSECTION 78(1) AND SECTION 80 OF THE CFA)

UPON the application (the Application) of Aviva Investors Global Services Limited (AIGSL) and Aviva Investors Americas LLC (AIA and, together with AIGSL, the Sub-Advisers and, each, a Sub-Adviser) and Aviva Investors Canada Inc. (the Principal Adviser) to the Ontario Securities Commission (the Commission) for an order:

(a) pursuant to subsection 78(1) of the CFA, revoking the exemption order granted by the Commission to the Principal Adviser and the Sub-Advisers on March 29, 2016 (the Previous Order); and

(b) pursuant to section 80 of the CFA, that each Sub-Adviser (and any individuals engaging in, or holding themselves out as engaging in, the business of advising others when acting on behalf of a Sub-Adviser in respect of the Sub-Advisory Services (as defined below) (the Representatives) be exempt, for a specified period of time, from the adviser registration requirements in paragraph 22(1)(b) of the CFA when acting as a sub-adviser for the Principal Adviser in respect of the Clients (as defined below) regarding commodity futures contracts and commodity futures options (collectively, the Contracts) traded on commodity futures exchanges and cleared through clearing corporations;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Principal Adviser and the Sub-Advisers having represented to the Commission that:

1. The Principal Adviser is a corporation incorporated under the laws of the province of Ontario, with its head office located in Toronto, Ontario. The Principal Adviser is registered (a) as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer under the Securities Act (Ontario) (the OSA) and under the securities legislation in each of the other provinces and territories of Canada and (b) as an adviser in the category of commodity trading manager under the CFA.

2. AIGSL is a corporation organized under the laws of the United Kingdom and Wales with its head office located in London, United Kingdom.

3. AIA is a limited liability company organized under the laws of the State of Delaware, United States with its head office located in Chicago, Illinois, United States.

4. The Sub-Advisers and the Principal Adviser are affiliates, and are indirect subsidiaries of Aviva plc, a publicly traded financial services company headquartered in the United Kingdom; for this purpose, an "affiliate" means any entity that is controlled by Aviva plc or other ultimate parent company of the Principal Adviser, as the case may be, and "control" and any derivation thereof, means the possession, directly or indirectly, of the power to direct or significantly influence the management and policies/business or affairs of an entity whether through ownership of voting securities or otherwise.

5. AIGSL is authorized with the United Kingdom Financial Conduct Authority (No. 119178) as a financial services firm to advise on investments including commodity futures, commodity options and options on commodity futures.

6. AIGSL engages in the business of an adviser in respect of Contracts in the United Kingdom. Among other activities, AIGSL engages in the business of advising others as to trading in commodity futures contracts, commodity futures options and options on commodity futures in the United Kingdom. AIGSL is in compliance in all material respects with the securities laws, commodity futures laws and derivatives laws in the United Kingdom.

7. AIGSL is not registered in any capacity under the OSA, under the CFA or under the securities legislation of any other jurisdiction of Canada and is not relying on any exemption from the requirement to register found in such legislation, other than the Previous Order.

8. AIA is registered with the United States Securities and Exchange Commission as an investment adviser, is registered with the United States Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator and is a member of the United States National Futures Association.

9. AIA engages in the business of an adviser in respect of Contracts in the United States. Among other activities, AIA engages in the business of advising others as to trading in commodity futures contracts, commodity futures options and options on commodity futures in the United States. AIA is in compliance in all material respects with the securities laws, commodity futures laws and derivatives laws in the United States.

10. AIA is not registered in any capacity under the OSA, under the CFA or under the securities legislation of any other jurisdiction of Canada. AIA currently relies on the Previous Order, the exemption from the requirement to register as an adviser under the OSA and under the securities legislation of Québec pursuant to section 8.26 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and the exemption from the requirement to register as an investment fund manager under the OSA and under the securities legislation of Québec and Newfoundland & Labrador pursuant to section 4 of Multilateral Instrument 32-102 Registration Exemptions for Non-Resident Investment Fund Managers.

11. Each Sub-Adviser is registered in a category of registration, or operates under an exemption from registration, under the commodity futures or other applicable legislation of its principal jurisdiction that permits it to carry on the activities in that jurisdiction that registration as an adviser under the CFA would permit it to carry on in Ontario. As such, each Sub-Adviser is authorized and permitted to carry on the Sub-Advisory Services (as defined below).

12. Each Sub-Adviser is not a resident of any province or territory of Canada.

13. The Principal Adviser and the Sub-Advisers are not in default of securities legislation, commodity futures legislation or derivatives legislation in any jurisdiction of Canada.

14. The Principal Adviser provides investment advice and/or discretionary portfolio management services in Ontario to: (i) investment funds, the securities of which are qualified by prospectus for distribution to the public in Ontario and the other provinces and territories of Canada (the Investment Funds); (ii) pooled funds, the securities of which are sold on a private placement basis in Ontario and certain other provinces and territories of Canada pursuant to prospectus exemptions contained in National Instrument 45-106 Prospectus Exemptions (the Pooled Funds); (iii) clients who have entered into investment management agreements with the Principal Adviser to establish managed accounts (the Managed Account Clients); and (iv) other Investment Funds, Pooled Funds and Managed Account Clients that may be established or retained in the future and in respect of which the Principal Adviser engages a Sub-Adviser to provide portfolio advisory services (the Future Clients) (each of the Investment Funds, Pooled Funds, Managed Account Clients and Future Clients being referred to individually as a Client and collectively as the Clients).

15. Certain of the Clients may, as part of their investment program, invest in Contracts. The Principal Adviser acts as a commodity trading manager in respect of such Clients.

16. In connection with the Principal Adviser acting as an adviser to Clients in respect of the purchase or sale of Contracts, the Principal Adviser, pursuant to a written agreement made between the Principal Adviser and a Sub-Adviser, has retained (or may retain) the applicable Sub-Adviser to act as a sub-adviser to the Principal Adviser in respect of Contracts in which the applicable Sub-Adviser has experience and expertise by exercising discretionary authority on behalf of the Principal Adviser, in respect of all or a portion of the assets of the investment portfolio of the respective Client, including discretionary authority to buy or sell Contracts for the Client (the Sub-Advisory Services), provided that such investments are consistent with the investment objectives and strategies of the applicable Client.

17. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is either registered as an adviser under the CFA or is registered as a representative, a partner or an officer of a registered adviser and is acting on behalf of a registered adviser.

18. By providing the Sub-Advisory Services, each Sub-Adviser will be engaging in, or holding itself out as engaging in, the business of advising others in respect of Contracts and, in the absence of being granted the requested relief, would be required to register as an adviser under the CFA.

19. There is presently no rule or regulation under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA that is similar to the exemption from the adviser registration requirement in respect of securities in subsection 25(3) of the OSA which is provided under section 8.26.1 of NI 31-103.

20. The relationship among the Principal Adviser, the Sub-Advisers and any Client will be consistent with the requirements of section 8.26.1 of NI 31-103.

21. Each Sub-Adviser will only provide the Sub-Advisory Services as long as the Principal Adviser is, and remains, registered under the CFA as an adviser in the category of commodity trading manager.

22. As would be required under section 8.26.1 of NI 31-103:

(a) the obligations and duties of each Sub-Adviser are set out in a written agreement with the Principal Adviser; and

(b) the Principal Adviser will enter into a written contract with each Client, agreeing to be responsible for any loss that arises out of the failure of the applicable Sub-Adviser:

(i) to exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Principal Adviser and each Client; or

(ii) to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances (together with (i), the Assumed Obligations).

23. The written agreement between the Principal Adviser and each Sub-Adviser will set out the obligations and duties of each party in connection with the Sub-Advisory Services and will permit the Principal Adviser to exercise the degree of supervision and control it is required to exercise over the applicable Sub-Adviser in respect of the Sub-Advisory Services.

24. The Principal Adviser will deliver to the Clients all required reports and statements under applicable securities, commodity futures and derivatives legislation.

25. The prospectus or other offering document, if any (in either case, the Offering Document), for each Client that is an Investment Fund or a Pooled Fund and for which the Principal Adviser engages a Sub-Adviser to provide the Sub-Advisory Services will include the following disclosure (the Required Disclosure):

(a) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of the applicable Sub-Adviser to meet the Assumed Obligations; and

(b) a statement that there may be difficulty in enforcing any legal rights against the applicable Sub-Adviser (or any of its Representatives) because such Sub-Adviser is resident outside of Canada and all or substantially all of its assets are situated outside of Canada.

26. The Required Disclosure is provided in writing prior to the purchasing of any Contracts for each client that is a Managed Account Client for which the Principal Adviser engages a Sub-Adviser to provide the Sub-Advisory Services.

27. The Principal Adviser and the Sub-Advisers obtained substantially similar relief in the Previous Order, pursuant to which the Sub-Advisers currently provide Sub-Advisory Services to the Principal Adviser for the benefit of the Clients.

28. The Principal Adviser and the Sub-Advisers have complied with, and are currently in compliance with, all of the terms and conditions of the Previous Order.

AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the exemption requested;

IT IS ORDERED, pursuant to subsection 78(1) of the CFA, that the Previous Order is revoked;

AND IT IS ORDERED, pursuant to section 80 of the CFA, that each Sub-Adviser and its Representatives are exempt from the adviser registration requirement in paragraph 22(1)(b) of the CFA when acting as a sub-adviser to the Principal Adviser in respect of the Sub-Advisory Services, provided that at the relevant time that such activities are engaged in:

(a) the Principal Adviser is registered under the CFA as an adviser in the category of commodity trading manager;

(b) the Sub-Adviser's head office or principal place of business is in a jurisdiction outside of Canada;

(c) the Sub-Adviser is registered in a category of registration, or operates under an exemption from registration, under the commodity futures or other applicable legislation of the jurisdiction outside of Canada in which its head office or principal place of business is located, that permits it to carry on the activities in that jurisdiction that registration as an adviser under the CFA would permit it to carry on in Ontario;

(d) the Sub-Adviser engages in the business of an adviser in respect of Contracts in the jurisdiction outside of Canada in which its head office or principal place of business is located;

(e) the obligations and duties of the Sub-Adviser are set out in a written agreement with the Principal Adviser;

(f) the Principal Adviser has entered into a written agreement with each Client, agreeing to be responsible for any loss that arises out of any failure of the Sub-Adviser to meet the Assumed Obligations;

(g) the Offering Document of each Client that is an Investment Fund or Pooled Fund for which the Principal Adviser engages the Sub-Adviser to provide the Sub-Advisory Services will include the Required Disclosure; and

(h) the Required Disclosure is provided in writing prior to the purchasing of any Contracts for each Client that is a Managed Account Client for which the Principal Adviser engages the Sub-Adviser to provide the Sub-Advisory Services;

AND IT IS FURTHER ORDERED that this Order will terminate on the earliest of

(a) the expiry of any transition period as may be provided by law, after the effective date of the repeal of the CFA;

(b) six months, or such other transition period as may be provided by law, after the coming into force of any amendment to Ontario commodity futures law (as defined in the CFA) or Ontario securities law (as defined in the OSA) that affects the ability of either Sub-Adviser to act as a sub-adviser to the Principal Adviser in respect of the Sub-Advisory Services; and

(c) five years after the date of this Order.

DATED at Toronto, Ontario, this 25th day of March, 2021.