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 extension of fund's prospectus lapse date by 123 days -- Filer to incorporate offering of the funds under the same offering documents when they are renewed -- Extension of lapse date will not affect the accuracy of the information contained in the prospectus.
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 FUND (the Fund)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Fund for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limits for the renewal of the simplified prospectus, annual information form and fund facts of the Fund, dated January 25, 2021 (the Current Prospectus), be extended to the time limits that would be applicable as if the lapse date of the Current Prospectus was May 28, 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 Fund.
4. Neither the Filer nor the Fund are in default of securities legislation in any of the Canadian Jurisdictions.
5. The Fund is a mutual fund established as a trust under the laws of Ontario pursuant to a supplemental trust deed dated January 7, 2021 to the amended and restated master declaration of trust dated April 11, 2017, as amended. The Fund is a reporting issuer as defined in the securities legislation of each of the Canadian Jurisdictions.
6. The Fund currently distributes its securities in each of the Canadian Jurisdictions on a continuous basis pursuant to the Current Prospectus.
7. The lapse date for the Current Prospectus is January 25, 2022 (the Current Lapse Date). Accordingly, under the Legislation, the distribution of securities of the Fund would have to cease on its applicable Current Lapse Date unless: (i) the Fund files a pro forma simplified prospectus at least 30 days prior to its Current Lapse Date; (ii) the final simplified prospectus is filed no later than 10 days after its Current Lapse Date; and (iii) a receipt for the final simplified prospectus is obtained within 20 days after its Current Lapse Date.
8. The Filer is also the manager of 44 other mutual funds as listed in Schedule "A" (the Other Funds) that currently distribute their securities under a simplified prospectus, annual information form and fund facts with a lapse date of May 28, 2022 (the Other Funds' Prospectus).
9. The Filer wishes to combine the Current Prospectus with the Other Funds' Prospectus to reduce renewal, printing, and related costs. Offering the Fund under the same prospectus as the Other Funds would facilitate the distribution of the Fund in the Canadian Jurisdictions under the same prospectus and will ensure that the Filer can make the operational and administrative features of the Fund consistent with all the Other Funds, if necessary.
10. The Filer wishes to extend the lapse date of the Current Prospectus to move the renewal timeframe to a more administratively beneficial date. The Filer believes that May 28, 2022 is an administratively beneficial lapse date, 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 prospectus (and related documents) and the continuous disclosure materials of the Fund.
11. Establishing a uniform disclosure timeline for the Fund will enable the Filer to streamline operations and disclosure across the Filer's fund platform. The Fund and the Other Funds share many common operational and administrative features and combining them in the same simplified prospectuses will allow investors to compare the features of the funds more easily.
12. If the Exemption Sought is not granted, it will be necessary to renew the Fund's prospectus documents twice within a short period of time to consolidate the prospectus documents and establish a uniform filing timeline for the Fund, 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.
13. There have been no material changes in the affairs of the Fund since the date of the Current Prospectus. Accordingly, the Current Prospectus continues to provide accurate information regarding the Fund.
14. Given the disclosure obligations of the Filer and the Fund, should any material change in the business, operations or affairs of the Fund occur, the Current Prospectus will be amended as required under the Legislation.
15. New investors of the Fund will receive delivery of the most recently filed fund facts document(s) of the Fund. The Current Prospectus will remain available to investors upon request.
16. The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectus 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.