RBC Global Asset Management Inc.

Headnote

Relief granted from the single custodian requirement in subsection 6.1(1) of NI 81-102 to permit the use of an additional custodian on a temporary basis for securities that are subject to certain sanctions, subject to conditions.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 6.1(1) and 19.1.

July 17, 2025

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
RBC GLOBAL ASSET MANAGEMENT INC.
(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Filer and RBC Emerging Markets Equity Fund, RBC Emerging Markets Equity Index ETF Fund, RBC Emerging Markets Bond Fund and RBC QUBE Low Volatility Global Equity Fund (the Funds and each a Fund) for a decision under the securities legislation of the principal regulator (the Legislation) for relief from subsection 6.1(1) of National Instrument 81-102 -- Investment Funds (NI 81-102) to permit the Funds to appoint two custodians, each of which satisfies the requirements of Section 6.2 of NI 81-102, subject to certain conditions proposed in this Application (the Exemption Sought).

Interpretation

Terms defined in National Instrument 14-101 Definitions, Multilateral Instrument 11-102 -- Passport System (MI 11-102) and NI 81-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

The Filer

1. The Filer is a corporation formed by amalgamation under the federal laws of Canada and its head office is located in Toronto, Ontario.

2. The Filer is an indirect, wholly-owned subsidiary of Royal Bank of Canada.

3. The Filer is registered as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer under the securities legislation of each Jurisdiction, is registered as an investment fund manager in each of British Columbia, Ontario, Québec and Newfoundland and Labrador and is also registered in Ontario as a commodity trading manager.

4. The Filer is the investment fund manager of each of the Funds.

5. The Filer is not in default of securities legislation in any of the Jurisdictions.

The Funds

6. Each Fund is an open-ended mutual fund governed by the laws of the Province of Ontario.

7. Each Fund distributes its securities pursuant to a simplified prospectus prepared pursuant to National Instrument 81-101 -- Investment Funds and Form 81-101F1 -- Contents of a Simplified Prospectus and is governed by the applicable provisions of NI 81-102, subject to any exemptions therefrom that have been, or may in the future be, granted by the securities regulatory authorities.

8. Each Fund is a continuing fund in respect of the following fund mergers (the Fund Mergers) involving the following RBC Indigo Asset Management Inc. funds (the Merging Funds):

9. The Fund Mergers were effective as of April 17, 2025 and following the completion of the Fund Mergers, the Merging Funds terminated.

10. The custodian for the assets of the Funds is RBC Investor Services Trust (RBC IS) pursuant to an amended and restated master custodian agreement between the Filer and RBC IS dated July 26, 2012, as amended.

11. The custodian for the assets of the Merging Funds was CIBC Mellon Trust Company (CIBC Mellon) pursuant to a fund custody agreement dated June 29, 2021, as amended (the CIBC Mellon Custody Agreement).

12. Prior to the Fund Mergers, each of the Merging Funds owned securities (the Sanctioned Securities) of Russian and Belarus issuers that became the subject or target of sanctions administered and enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (OFAC) and Global Affairs Canada (GAC) (collectively, the Sanctions Authorities), respectively, some time after their purchase.

13. The Sanctioned Securities are not material to the Funds' portfolios and currently represent almost 0% of the overall net asset value of the Funds.

14. Under the Fund Mergers, all portfolio securities (including Sanctioned Securities) and cash of each Merging Fund were transferred to the relevant Fund. In connection with such transfer, the Sanctioned Securities continued to be custodied at CIBC Mellon and CIBC Mellon has agreed to custody the Sanctioned Securities for the Funds.

15. CIBC Mellon has advised that it will not transfer the Sanctioned Securities until (i) any required licenses or permits, or confirmation that such licenses or permits are not required, is obtained from the relevant Sanctions Authorities, or (ii) the applicable sanctions measures are repealed.

16. In order to accommodate the Fund Mergers, CIBC Mellon has agreed to amend the CIBC Mellon Custody Agreement and act as custodian for the Funds in respect of the Sanctioned Securities until either of the events described in (i) or (ii) of paragraph 15 above occur, as a result of which such securities will remain in their existing custodial accounts.

17. No later than 10 business days after the Filer provides CIBC Mellon with a copy of a license, permit or confirmation from the relevant Sanctions Authorities, as applicable, with respect to a Fund or the Sanctioned Securities, CIBC Mellon and its sub-custodians shall review and determine if such license, permit or confirmation from the relevant Sanctions Authorities, as applicable, is in good order, and if in good order upon the completion of such review, it shall transfer such Sanctioned Securities as directed by the Filer.

18. Until receipt of the appropriate licenses, permits or confirmations from the relevant Sanctions Authorities, as applicable, or in the case of certain of the Sanctioned Securities, the applicable sanctions measures are repealed, the Sanctioned Securities must continue to be custodied at CIBC Mellon on a temporary basis.

19. The Filer has applied for the Exemption Sought in order to permit the appointment of two custodians for the Funds on a temporary basis and until receipt of the appropriate licenses, permits or confirmations from the relevant Sanctions Authorities, as applicable, or in the case of certain of the Sanctioned Securities, the applicable sanctions measures are repealed, and the securities are transferred to Fund accounts custodied at RBC IS.

20. Both RBC IS and CIBC Mellon are qualified to act as a custodian of an investment fund under section 6.2 of NI 81-102.

21. CIBC Mellon has advised that it will not transfer the Sanctioned Securities for any purpose until the appropriate licenses, permits or confirmations from the relevant Sanctions Authorities, as applicable, are obtained and reviewed by CIBC Mellon.

22. The Filer is working diligently to obtain the appropriate licenses, permits or confirmations from the Relevant Sanctions Authorities for the transfer of the Sanctioned Securities.

23. Both the Filer and CIBC Mellon agree that the appropriate course of action in the circumstances is to maintain the existing custodial accounts at CIBC Mellon until receipt of the appropriate licenses, permits or confirmations from the relevant Sanctions Authorities, as applicable.

24. The appointment of two custodians will have no impact on the safe keeping of the portfolio assets of the Funds and will enable the Filer to ensure the Sanctioned Securities are properly custodied during this interim period.

25. Once the Exemption Sought is granted then the Funds will not be in default of securities legislation in any Jurisdiction.

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 Exemption Sought is granted provided that:

(a) for so long as each of CIBC Mellon and RBC IS act as custodian of the Fund, they will each be qualified to act as a custodian of the Funds under NI 81-102;

(b) the existing custodial accounts at CIBC Mellon will be maintained until receipt of the appropriate licenses, permits or confirmations and only in respect of the Sanctioned Securities; and

(c) a single entity, the Filer, reconciles all the portfolio assets of each Fund and provides each Fund with valuation services.

"Darren McKall"
Associate Vice President, Investment Management Division
Ontario Securities Commission

Application File #: 2025/0352
SEDAR+ File # 6296585