Integra Capital Limited
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- approval for change of control of manager under s. 5.5(1)(a.1) of National Instrument 81-102 Investment Funds -- transaction will not result in any material changes to operations and management of the manager or the funds it manages.
Applicable Legislative Provisions
National Instrument 81-102 Investment Funds -- ss. 5.5(1)(a.1) and 5.5(3).
December 14, 2020
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 INTEGRA CAPITAL LIMITED (the Filer)
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for approval pursuant to section 5.5(1)(a.1) of National Instrument 81-102 Investment Funds (NI 81-102) of a change of control of the Filer (the Approval Sought).
Under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission (the OSC) 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 British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador (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:
The Filer and the Funds
1. The Filer is a private corporation existing under the Business Corporations Act (Ontario) having its head office in Oakville, Ontario.
2. The Filer is registered in Canada as:
(a) an investment fund manager (IFM) in each of Ontario, Québec, and Newfoundland and Labrador;
(b) a portfolio manager (PM) and exempt market dealer (EMD) in each Jurisdiction and territory, except Nunavut; and
(c) a commodity trading manager (CTM) in Ontario.
3. The Filer is wholly-owned, indirectly, by Willis Towers Watson Public Limited Company (WTW).
4. The Filer is the IFM for each of the public investment funds that are listed in Exhibit A (each a Fund and collectively, the Funds). Each of the Funds is a conventional open-end mutual fund, organized as a trust pursuant to the laws of Ontario, a reporting issuer, and subject to NI 81-102, in each Jurisdiction. The Funds were offered in the Jurisdictions by a simplified prospectus dated August 23, 2011, but the Filer permitted the prospectus to lapse on August 23, 2012. Units of the Funds are now offered exclusively through the exempt market on a private placement basis.
5. Neither the Filer, nor a Fund, is in default of applicable Canadian securities, commodity futures, or derivatives legislation in any of the Jurisdictions (collectively, Securities Legislation).
6. Aon plc (Aon Ireland) is a public limited company incorporated in Ireland having its head office in Dublin, Ireland and is a tax resident of Ireland.
7. Aon Ireland is a global professional services firm that provides advice and solutions to clients focused on risk, retirement and health, delivering distinctive client value via innovative and effective risk management, and workforce productivity solutions that are underpinned by proprietary data and analytics by approximately 50,000 colleagues in 120 countries. Aon Ireland's Class A ordinary shares are currently, and will continue to be, traded on the New York Stock Exchange under the symbol "AON."
8. Aon Ireland is not registered under Securities Legislation, nor the owner, directly or indirectly, of such a firm except for Aon Investments Canada Inc. (Aon Investments) and Aon Securities Investment Management Inc. (Aon Securities).
9. Aon Investments is a private corporation existing under theCanada Business Corporations Act having its head office in Toronto, Ontario.
10. Aon Investments is registered in Canada as:
(a) an IFM in Manitoba, Newfoundland and Labrador, Ontario, and Québec; and
(b) a PM and EMD in each Jurisdiction and territory, except New Brunswick, Nunavut, Prince Edward Island, and the Yukon.
11. Aon Investments is wholly-owned, indirectly, by Aon Ireland.
12. Aon Investments is not the IFM of any investment funds that are subject to NI 81-102.
13. Aon Securities is a private corporation existing under the Canada Business Corporations Act having its head office in Toronto, Ontario.
14. Aon Securities is registered in Canada as:
(a) a PM in each of British Columbia, Manitoba, Ontario, and Québec;
(b) a CTM in Ontario; and
(c) an adviser regarding commodity futures trading in Manitoba.
15. Aon Securities is wholly-owned, indirectly, by Aon Ireland.
16. Aon Securities is not the IFM of any investment funds that are subject to NI 81-102.
The Business Combination
17. On March 9, 2020, Aon UK and WTW entered into the Business Combination Agreement (Business Combination Agreement) providing for the combination of the two companies.
18. On April 2, 2020, Aon UK assigned all of its rights and obligations under the Business Combination Agreement to its affiliate and ultimate holding company of the Aon group, Aon Ireland.
19. Under the terms of the Business Combination Agreement, Aon Ireland has agreed to acquire the entire issued ordinary share capital of WTW in a recommended all-share transaction of the Aon group and WTW group, pursuant to a court-sanctioned scheme of arrangement (the Scheme) under Chapter 1 of Part 9 of the Irish Companies Act 2014, subject to the approval of the Scheme by the High Court of Ireland. On completion of the Business Combination (the Closing), WTW shareholders will be entitled to receive, at the effective time of the Scheme, 1.08 newly issued Class A ordinary shares of Aon Ireland (the Aon Ireland Shares) in exchange for each ordinary share of WTW (collectively, the WTW Shares) owned by such WTW shareholders and subject to the Scheme. As a result of the Scheme, following the Closing, it is anticipated that: (i) the shareholders of Aon Ireland and WTW immediately prior to the Closing will own approximately 62.3% and 37.7% of Aon Ireland immediately following the Closing, respectively, and it is not expected that any single shareholder will beneficially own 10% or more, based on the number of Aon Ireland Shares and WTW Shares outstanding as of May 5, 2020 on a fully diluted basis; (ii) WTW will be a wholly-owned subsidiary of Aon Ireland; (iii) the Filer will be an indirect wholly-owned subsidiary of Aon Ireland; and (iv) the change of control of the Filer will have occurred.
20. Further, immediately after the Closing, it is expected that Aon Ireland will complete an internal reorganization. Specifically, WTW will merge with a newly incorporated, wholly-owned, Irish subsidiary of Aon Ireland named Aon WTW Limited that will be the surviving entity.
21. Closing is subject to customary closing conditions, including regulatory non-objections/approvals under National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registration Obligations (NI 31-103) and the Approval Sought.
22. Assuming timely receipt of all necessary regulatory non-objections/approvals and the satisfaction of all other conditions, the Business Combination is expected to be completed in Q1, 2021 or on such other later date when all of the conditions precedent have been satisfied or waived, and all non-objections/approvals have been obtained, subject to extension by the parties. If completed as contemplated, following the Closing, Aon Ireland will indirectly own of 100% of the outstanding shares of the Filer.
Change of Control of Filer
23. As the indirect share ownership of the Filer will change after the Closing, the Business Combination will result in a change of control of the Filer and, accordingly, regulatory approval is required pursuant to section 5.5(1)(a.1) of NI 81-102.
Impact of the Business Combination and Change of Control
24. The Business Combination and change of control of the Filer is not expected to result in any material changes to, or impact on, the business, operations and affairs of the Funds, the securityholders of the Funds, or the Filer.
25. Upon Closing, Aon Ireland will become the indirect parent of the Filer and the Filer will continue to act as the investment fund manager of the Funds in materially the same manner as the Filer did immediately prior to Closing. Aon Ireland will become the ultimate parent of the Filer.
26. The Filer will continue to act as the IFM of the Funds as a separate corporate entity performing its current role.
27. There is no current intention:
(a) to make any substantive changes as to how the Filer operates or manages the Funds;
(b) to amalgamate or merge the Filer with any other investment fund managers; or
(c) to, immediately following the Closing, or within a foreseeable period of time, change the Filer, as manager of the Funds, to another investment fund manager.
28. There are no currently planned material changes to the structures (via merger or otherwise), names, investment objectives, investment strategies, or valuation procedures, of the Funds.
29. There are no currently planned changes to the trustee, custodian, auditor, or management fees or expenses, respectively, of the Funds.
30. Upon the completion of the Business Combination, the members of the Filer's investment review committee (IRC) will cease to be IRC members by operation of section 3.10(1)(c) of National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107). Immediately following the completion of the Business Combination, the Filer intends to re-appoint each member of the IRC, in an effort to reconstitute the IRC with the same members, subject to such members being "independent" as defined in NI 81-107 at that time.
31. It is not expected that there will be any immediate changes to fund accounting and other administrative functions undertaken by the current providers, both internal and external, for the Filer or the Funds.
32. The Business Combination is not expected to adversely impact the financial stability of the Filer or its ability to fulfill its regulatory obligations. At this time, the Filer does not anticipate that the Business Combination will give rise to any conflicts of interest in addition to those that are currently managed in the ordinary course of each Fund's business.
No change of Chief Compliance Officer or Ultimate Designated Person
33. There are no current plans to change the chief compliance officer (CCO) of the Filer.
34. There are no current plans to change the ultimate designated person (UDP) of the Filer.
No change of directors
35. There are no current plans to change the directors of the Filer.
No change of registered representatives
36. There are no current plans to change the advising or dealing representatives of the Filer.
37. On December 15, 2020, the Filer will provide prior notice to unitholders of the Funds of the change of control of the Filer that will result from the completion of the Business Combination as required by section 5.8(1)(a) of NI 81-102, being at least 60 calendar days before the Closing .
38. Notice of the Business Combination was sent to the Compliance and Registrant Regulation branch of the OSC on July 24, 2020 pursuant to section 11.9 of NI 31-103.
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 Approval Sought is granted.