Franklin Templeton Investments Corp. et al.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to exchange traded fund trusts for extensions of the lapse date of their prospectus -- Filer will incorporate offering of the exchange traded funds under the same offering documents as related family of funds when they are renewed -- Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectus.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
November 12, 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 FRANKLIN TEMPLETON INVESTMENTS CORP. (the Filer) AND FRANKLIN FTSE CANADA ALL CAP INDEX ETF FRANKLIN FTSE U.S. INDEX ETF FRANKLIN FTSE EUROPE EX U.K. INDEX ETF FRANKLIN FTSE JAPAN INDEX ETF (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 limits for the renewal of the long form prospectus of the Funds dated February 1, 2019 (the Current Prospectus) be extended to those time limits that would be applicable as if the lapse date of the Current Prospectus was April 1, 2020 (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 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).
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. Each Fund is an exchange traded fund established as a trust under the laws of Ontario pursuant to a master declaration of trust dated April 18, 2017, as amended and restated as of November 8, 2017, as amended.
2. Each Fund is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
3. Each Fund currently distributes its securities in the Jurisdictions on a continuous basis pursuant to a long form prospectus dated February 1, 2019, as amended by amendment no. 1 dated February 19, 2019 (collectively, the Current Prospectus).
4. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the "Act"), the lapse date of the Current Prospectus is February 1, 2020 (the Current Lapse Date).
5. Pursuant to subsection 62(2) of the Act, the distribution of securities of each of the Funds would have to cease on the Current Lapse Date unless: (i) the Funds file a pro forma prospectus at least 30 days prior to the Current Lapse Date; (ii) the final prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days after the Current Lapse Date.
6. The Filer is a corporation amalgamated under the laws of Ontario and is the trustee and manager of the Funds. The Filer's head office is in Toronto, Canada.
7. The Filer is registered as an investment fund manager in Ontario, Quebec, Alberta, British Columbia, Manitoba, Nova Scotia, and Newfoundland and Labrador, as a mutual fund dealer, portfolio manager and exempt market dealer in each province of Canada and the Yukon, and as a commodity trading manager in Ontario.
8. The Filer is also the manager of 10 other exchange traded funds as listed in Schedule "A" (collectively, the Other Funds), that are currently offered in each of the provinces and territories of Canada under a long form prospectus with a lapse date of April 1, 2020 (the Other Funds' Prospectus).
9. Neither the Filer nor any of the Funds is in default of securities legislation in any of the Jurisdictions.
10. The Filer wishes to combine the prospectus of the Funds with the prospectus of the Other Funds in order to reduce the cost of renewing the prospectus of the Funds and on-going printing and related costs. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of such funds in the Jurisdictions 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, offering them under the same prospectus would allow investors to more easily compare their features.
11. It would be impractical to alter and modify all the dedicated systems, procedures and resources required to prepare the renewal simplified prospectus, annual information form and ETF facts documents (collectively, the Renewal Documents) of the Other Funds, and unreasonable to incur the costs and expenses associated therewith, so that the Renewal Documents of the Other Funds can be filed earlier with the Renewal Documents of the Funds.
12. The Filer may make minor changes to the features of the Other Funds as part of the process of renewing the Other Funds Prospectus. The ability to file the simplified prospectus of the Funds with those of the Other Funds will ensure that the Filer can make the operational and administrative features of the Funds and the Other Funds consistent with each other, if necessary.
13. If the Exemption Sought is not granted, it will be necessary to renew the Renewal Documents of the Funds twice within a short period of time in order to consolidate the simplified prospectus of the Funds with the simplified prospectus of the Other Funds.
14. There have been no material changes in the affairs of the Funds since the date of the Current Prospectus, other than those for which amendments have been filed. Accordingly, the Current Prospectus represents current information of such Funds. In addition, the most recently filed ETF facts of the Funds provides even more current information to investors regarding the Funds.
15. Given the disclosure obligations of the Funds, should any material change in the affairs of any of the Funds occur, the Current Prospectus and current ETF facts document of the applicable Fund(s) will be amended as required under the Legislation.
16. New investors of the Funds will receive delivery of the most recently filed ETF facts documents of the applicable Fund(s). The Current Prospectus will still be available upon request.
17. The Exemption Sought will not affect the accuracy of the information contained in the Current Prospectus or the respective ETF facts documents and therefore will 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.