Fiduciary Trust Company of Canada and Franklin Templeton Investments Corp.

Headnote

Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions. Under paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual is registered as a dealing, advising or associate advising representative of another registered firm. The Filers are affiliated entities and have valid business reasons for one particular individual to be registered with both firms. The Filers have policies in place to handle potential conflicts of interest. The Filers are exempted from the prohibition.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1 and 15.1.

December 9, 2019

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 FIDUCIARY TRUST COMPANY OF CANADA (FTCC) AND FRANKLIN TEMPLETON INVESTMENTS CORP. (FTIC, and together with FTCC, Franklin Templeton or the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from the restriction under paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) (the Dual-Registration Restriction), pursuant to section 15.1 of NI 31-103, to permit Mr. Manmeet Bhatia to be registered as an advising representative of each of FTCC and FTIC (the Relief Sought).

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 Filers have provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filers in each of the provinces of Canada outside of Ontario and in the Yukon Territory (together with Ontario, 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 Filers:

1. FTCC is a federally-regulated trust company and registered as a portfolio manager in each of the Jurisdictions and as a commodity trading manager in Ontario. The head office of FTCC is located in Toronto, Ontario. FTCC provides portfolio management services primarily to high net worth individuals and families through separately managed accounts, pooled funds and mutual funds.

2. FTIC is registered as a portfolio manager, exempt market dealer and mutual fund dealer in each of the Jurisdictions. FTIC is also registered as an investment fund manager in each of Alberta, British Columbia, Manitoba, Newfoundland & Labrador, Nova Scotia, Ontario and Quebec and as a commodity trading manager in Ontario. The head office of FTIC is located in Toronto, Ontario. FTIC is the investment fund manager of various Canadian proprietary mutual funds and pooled funds and provides portfolio management services to those funds and institutional clients.

3. FTIC is also registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC).

4. FTCC and FTIC are affiliates as FTCC is a wholly-owned subsidiary of FTIC.

5. Mr. Bhatia is Head of Private Wealth, Canada at FTIC and FTCC. In this role, Mr. Bhatia will champion the growth of Franklin Templeton's existing discretionary high net worth and investment fund management businesses and lead the digital transformation of these businesses all under the Private Wealth Channel.

6. Mr. Bhatia has been registered with FTIC as an advising representative (portfolio manager) since September 5, 2019 in British Columbia and Ontario and was previously registered as an advising representative (portfolio manager) with other financial services entities from September 28, 2009 to July 15, 2019 in Alberta, British Columbia, Manitoba, Ontario and Saskatchewan. Mr. Bhatia is a resident of British Columbia.

7. Franklin Templeton wishes to appoint Mr. Bhatia as a portfolio manager for the FTCC funds and client accounts. However, Mr. Bhatia is presently only registered with FTIC and is unable to provide investment management services to FTCC clients. Dual registration as an advising representative of both FTIC and FTCC would allow the Filers to leverage Mr. Bhatia's knowledge, expertise and experience in helping both FTCC and FTIC clients reach their investment objectives with increased consistency between FTCC's high net worth client portfolios and FTIC's institutional portfolios. Mr. Bhatia's dual registration will also help to optimize Filer's resources and will increase their operational efficiency.

8. Dual registration is being requested to permit Mr. Bhatia to act as Head of Private Wealth, Canada of FTCC including providing portfolio management services to clients of FTCC in addition to Mr. Bhatia's role with FTIC.

9. Mr. Bhatia will be subject to supervision by, and the applicable compliance requirements of, both Filers.

10. The Filers' Chief Compliance Officer and Ultimate Designated Person will ensure that Mr. Bhatia has sufficient time and resources to adequately serve each Filer and its clients and funds.

11. The Filers are not in default of any requirement of securities, commodity futures or derivatives legislation in any of the Jurisdictions. FTIC is in compliance in all material respects with U.S. securities laws.

12. In the absence of the Relief Sought, the Filers would be prohibited by the Dual-Registration Restriction from permitting Mr. Bhatia to be registered as an advising representative of each Filer, even though the Filers are affiliates and have controls and compliance procedures in place to deal with Mr. Bhatia's advising activities.

13. FTCC and FTIC are affiliated and accordingly, the dual registration of Mr. Bhatia will not give rise to the conflicts of interest present in a similar arrangement involving unrelated, arm's length firms. The interests of the Filers are aligned as both Filers wish to leverage Mr. Bhatia's knowledge, expertise and experience for the benefit of their clients and funds. Therefore, the potential for conflicts of interest is minimal.

14. The Filers each have adequate policies and procedures in place to address any potential conflicts of interest that may arise as a result of the dual registration of Mr. Bhatia and will be able to deal appropriately with any such conflicts.

15. It is not expected that the dual registration of Mr. Bhatia will lead to any client confusion since the principal client bases of each of the Filers are different: FTCC typically advises individual high net worth clients and FTIC advises institutional investors. Moreover, Mr. Bhatia (as FTCC's Head of Private Wealth, Canada) will only manage the FTCC funds and client accounts on behalf of FTCC, which will mitigate the risks of conflict or client confusion.

16. All accounts managed by Franklin Templeton portfolio managers (i.e., the Filers and their affiliates that are also portfolio managers) adhere to a common Franklin Templeton trade allocation policy to ensure that investment opportunities suitable for funds and clients of all Franklin Templeton portfolio managers, including the Filers, are allocated between them fairly. The Filers also have policies and procedures to address any potential conflicts of interest including trade allocation where there is overlap in portfolio holdings between accounts managed by these affiliated entities.

17. Once registered as an advising representative of FTCC, Mr. Bhatia will be engaging in functionally similar types of activities as he currently carries on within the Franklin Templeton group of companies. The Filers are confident that Mr. Bhatia will continue to have sufficient time to adequately serve both firms, their clients and funds.

18. The relationship between FTCC and FTIC, and the fact that Mr. Bhatia is dually registered with both FTCC and FTIC, will be fully disclosed, in writing or verbally, to clients and funds of each of FTCC and FTIC that deal with Mr. Bhatia.

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 Relief Sought is granted provided that:

i. Mr. Bhatia is subject to supervision by both Filers and applicable compliance requirements of both Filers;

ii. the Chief Compliance Officer and Ultimate Designated Person of each Filer ensure that Mr. Bhatia has sufficient time and resources to adequately serve each Filer and its respective clients;

iii. each Filer has adequate policies and procedures in place to address any potential conflicts of interest that may arise from the dual registration of Mr. Bhatia, and deal appropriately with any such conflicts; and

iv. the relationship between the Filers and the fact that Mr. Bhatia is dually registered with both of the Filers is fully disclosed in writing to the Filer's clients that deal with Mr. Bhatia.

The Relief Sought shall cease to be effective when either of the following apply:

i. Mr. Bhatia is no longer registered in any of the Jurisdictions as an advising representative of FTCC;

ii. Mr. Bhatia is no longer registered in any of the Jurisdictions as an advising representative of FTIC.

"Elizabeth King"