Franklin Templeton Investments Corp.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted under subsection 62(5) of the Securities Act (Ontario) to permit extensions of two prospectus lapse dates by 40 days and 123 days, respectively -- Lapse date extensions requested to allow the Filer to combine the two prospectuses and create a more optimal and consistent workload for the Filer's staff -- Extension of lapse dates will not affect the accuracy of the information contained in the current prospectuses.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as amended, ss. 62(5).
November 10, 2021
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 FRANKLIN INNOVATION ACTIVE ETF (the Fund) AND THE OTHER FUNDS LISTED IN SCHEDULE "A" HERETO (the Other Funds) (collectively, the Funds)
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 limit for the renewal of the long-form prospectus and ETF facts of the Fund, dated January 13, 2021 (the Current Prospectus of the Fund), and the time limit for the renewal of the long-form prospectus and ETF facts of the Other Funds, dated April 6, 2021 (the Current Prospectus of the Other Funds) (collectively, the Current Prospectuses), be extended to the time limits that would be applicable as if the lapse dates of the Current Prospectuses were May 16, 2022 (the Exemption 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 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 each of the other provinces and territories of Canada (together with Ontario, the Canadian Jurisdictions).
Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation governed by the laws of Ontario with its head office in Toronto, Ontario.
2. The Filer is registered as: (i) an investment fund manager in Ontario, Quebec, Alberta, British Columbia, Manitoba, Nova Scotia and Newfoundland and Labrador; (ii) as a mutual fund dealer, portfolio manager and exempt market dealer in each province of Canada and the Yukon territory, and (iii) as a commodity trading manager in Ontario.
3. The Filer is the investment fund manager and the trustee of the Funds.
4. Neither the Filer nor the Funds are in default of securities legislation in any of the Canadian Jurisdictions.
5. The Funds are exchange traded funds established as trusts under the laws of Ontario. The Funds are reporting issuers as defined in the securities legislation of each of the Canadian Jurisdictions.
6. The Other Funds are comprised of eight active ETFs (the Active ETFs) and eight passive and index ETFs (the Passive and Index ETFs), as identified in Schedule "A".
7. The Passive and Index ETFs have been established pursuant to a master declaration of trust dated April 18, 2017, as amended and restated as of November 8, 2017, as amended. The Fund and the Active ETFs have been established pursuant to a master declaration of trust dated April 18, 2017, as amended and restated as of January 5, 2018, as amended.
8. Securities of the Funds are currently qualified for distribution in each of the Jurisdictions under the Current Prospectuses.
9. The lapse date for the Current Prospectus of the Fund is January 13, 2022 and the lapse date for the Current Prospectus of the Other Funds is April 6, 2022 (collectively, the Current Lapse Dates). Accordingly, under the Legislation, the distribution of securities of the Funds would have to cease on their applicable Current Lapse Date unless: (i) the Funds file a pro forma prospectus at least 30 days prior to their Current Lapse Date; (ii) the final prospectus is filed no later than 10 days after their Current Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days after their Current Lapse Date.
10. The Filer desires to combine the Current Prospectuses to reduce renewal, printing and related costs. Offering the Funds under the same renewal prospectus would facilitate the distribution of the Funds in the Canadian Jurisdictions under the same prospectus and will ensure that the Filer can make the operational and administrative features of the Funds consistent with each other, if necessary.
11. The Filer desires to extend the Current Lapse Dates to move the renewal timeframe to a more administratively beneficial date. Establishing a uniform disclosure timeline for the Funds will permit the Filer to streamline operations and disclosure across the Filer's fund platform.
12. The Filer believes that May 16, 2022 is an administratively beneficial lapse date for the Funds, as it allows the Filer to create a more optimal and consistent workload for its personnel in respect of the work required to prepare and file the prospectuses (and related documents) and the continuous disclosure materials of the Funds.
13. The Funds share many common operational and administrative features and combining those Funds in the same long-form prospectus will allow investors to more easily compare the features of the Funds.
14. If the Exemption Sought is not granted, it will be necessary to renew the Funds' prospectus documents twice within a short period of time to consolidate the prospectus documents and establish a uniform filing timeline for the Funds, and it would be unreasonable for the Filer to incur the costs and expenses associated therewith, given investors would not be prejudiced by the Exemption Sought.
15. There have been no material changes in the affairs of the Funds since the date of the Current Prospectuses. Accordingly, the Current Prospectuses continue to provide accurate information regarding the Funds.
16. Given the disclosure obligations of the Filer and the Funds, should any material change in the business, operations or affairs of the Funds occur, the Current Prospectuses will be amended as required under the Legislation.
17. New investors of the Funds will receive delivery of the most recently filed ETF facts document(s) of the Funds. The Current Prospectuses will remain available to investors upon request.
18. The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectuses and will therefore not be prejudicial to the public interest.
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 Exemption Sought is granted.