TD Asset Management Inc.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to facilitate the offering of exchange-traded mutual fund securities and conventional mutual fund securities under the same form of prospectus -- Relief granted from the requirement in NI 41-101 to file a long form prospectus for exchange-traded fund securities provided that a simplified prospectus is prepared and filed in accordance with NI 81-101 and the filer includes disclosure required pursuant to Form 41-101F2 that is not contemplated by Form 81-101F1 in respect of the exchange-traded fund securities -- Filer will file ETF Facts in the form prescribed by Form 41-101F4 in respect of exchange-traded fund securities of a fund and will file a Fund Facts document in the form prescribed by Form 81-101F3 in respect of conventional mutual fund securities of a fund -- Technical relief granted from Parts 9, 10 and 14 of NI 81-102 to permit each fund to treat its exchange-traded fund securities and conventional mutual fund securities as separate mutual funds for the purpose of compliance with Parts 9, 10 and 14 of NI 81-102.
Applicable Legislative Provisions
National Instrument 41-101 General Prospectus Requirements, ss. 3.1(2) and 19.1.
National Instrument 81-102 Investment Funds, Parts 9, 10 and 14 and s. 19.1.
July 4, 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 TD ASSET MANAGEMENT INC.
(the Filer)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Existing Funds (as defined below) and such other mutual funds that are currently managed or may be managed by the Filer now or in the future that offer ETF Securities (as defined below) and/or Mutual Fund Securities (as defined below) (collectively, the Future Funds and together with the Existing Funds, the Funds, and each, a Fund), for a decision under the securities legislation of the Jurisdiction (the Legislation) that:
(a) exempts the Filer, any affiliate of the Filer, and each Fund from the requirement in subsection 3.1(2) of National Instrument 41-101 General Prospectus Requirements (NI 41-101) to prepare and file a long form prospectus for the ETF Securities in the form prescribed by Form 41-101F2 Information Required in an Investment Fund Prospectus (Form 41-101F2) provided that the Filer files: (i) a prospectus for the ETF Securities in accordance with the provisions of National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101), other than the requirements pertaining to the filing of a fund facts document; and (ii) an exchange-traded fund (ETF) facts document in accordance with Part 3B of NI 41-101 (the ETF Prospectus Form Relief); and
(b) permits the Filer, any affiliate of the Filer and each Fund that offers both ETF Securities and Mutual Fund Securities to treat the ETF Securities and the Mutual Fund Securities as if such securities were separate funds in connection with their compliance with the provisions of Parts 9, 10 and 14 of National Instrument 81-102 Investment Funds (NI 81-102) (the Sales and Redemptions Relief).
(collectively, the Exemption Sought).
Under National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator; 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 all of the provinces and territories of Canada other than Ontario (together with Ontario, the Jurisdictions).
Interpretation
Capitalized terms used herein have the meaning ascribed thereto below (or in MI 11-102, National Instrument 14-101 Definitions and NI 81-102, as applicable) unless otherwise defined in this decision.
(a) Affiliate Dealer means a registered dealer that is an affiliate of an Authorized Dealer or the Designated Broker and that participates in the re-sale of Creation Units (as defined below) of a Fund from time to time.
(b) Authorized Dealer means a registered dealer that has entered, or intends to enter, into an agreement with the manager of a Fund authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more Funds on a continuous basis from time to time.
(c) Basket of Securities means, in relation to the ETF Securities of a Fund, a group of securities or assets representing the constituents of the Fund.
(d) Designated Broker means a registered dealer that has entered, or intends to enter, into an agreement with the Filer or an affiliate of the Filer on behalf of a Fund to perform certain duties in relation to the ETF Securities of the Fund, including the posting of a liquid two-way market for the trading of the Fund's ETF Securities on the TSX or another Marketplace.
(e) ETF Facts means an ETF facts document prepared, filed and delivered in accordance with Part 3B of NI 41-101.
(f) ETF Securities means securities of an exchange-traded Fund or of an exchange-traded series of a Fund that are listed or will be listed on the TSX or another Marketplace and that will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.
(g) Existing ETFs means the ETFs managed by the Filer that are currently distributed pursuant to one or more long form prospectuses prepared in accordance with Form 41-101F2.
(h) Existing Mutual Funds means the mutual funds managed by an affiliate of the Filer that are currently distributed pursuant to a simplified prospectuses prepared in accordance with NI 81-101 and in respect of which ETF Securities are expected to be established and offered under a simplified prospectus to be filed by the Filer.
(i) Existing Funds means the Existing ETFs and the Existing Mutual Funds.
(j) Form 81-101F1 means Form 81-101F1 Contents of Simplified Prospectus.
(k) Form 81-101F3 means Form 81-101F3 Contents of Fund Facts Document.
(l) Fund Facts means the fund facts document prepared, filed and delivered in accordance with Form 81-101F3.
(m) Legislation means the securities legislation of each of the Jurisdictions, as applicable.
(n) Marketplace means a "marketplace" as defined in National Instrument 21-101 Marketplace Operation that is located in Canada.
(o) Market Price means the weighted average trading price of the ETF Securities of a Fund on the TSX or another Marketplace on which the ETF Securities of the Fund have traded on the effective date of a redemption.
(p) Mutual Fund Securities means securities of a non-exchange-traded class of a Fund that will be distributed pursuant to a simplified prospectus prepared in accordance with NI 81-101 and Form 81-101F1.
(q) Other Dealer means a registered dealer that is not an Authorized Dealer, the Designated Broker or an Affiliate Dealer.
(r) Prescribed Number of ETF Securities means, in relation to a Fund, the number of ETF Securities of the Fund determined by the Filer or an affiliate from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.
(s) Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the Legislation applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.
(t) Securityholders means beneficial or registered holders of Mutual Fund Securities and/or ETF Securities of a Fund, as applicable.
(u) TSX means the Toronto Stock Exchange.
Representations
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation continued under the laws of the Province of Ontario.
2. The Filer is a wholly-owned subsidiary of The Toronto-Dominion Bank, a Schedule 1 Canadian chartered bank. The head office of the Filer is located in Toronto, Ontario.
3. The Filer is registered in: (i) the Jurisdictions as a Portfolio Manager (PM) and Exempt Market Dealer; (ii) Ontario, Québec, Saskatchewan and Newfoundland and Labrador as an Investment Fund Manager (IFM); (iii) Ontario as a Commodity Trading Manager; and (iv) Québec as a Derivatives Portfolio Manager.
4. The Filer is the IFM and PM of each Existing Fund. The Filer or an affiliate of the Filer will be the IFM of the Future Funds.
5. The Filer is not a reporting issuer in any of the Jurisdictions and is not in default of securities legislation of any of the Jurisdictions.
The Funds
6. Each Fund is, or will be an open-ended mutual fund established as either a trust or a class of shares of a mutual fund corporation governed by the laws of Ontario and is or will be a reporting issuer in the Jurisdictions in which its securities are distributed. Each Fund that relies on the Exemption Sought will offer ETF Securities in addition to its existing Mutual Fund Securities.
7. The Existing ETFs are distributed pursuant to two separate long form prospectuses dated October 29, 2024, and February 27, 2025, in the form prescribed by Form 41-101F2 (the Long Form Prospectuses). Each of the Existing ETFs currently offers ETF Securities listed on the TSX.
8. The Existing Mutual Funds are distributed pursuant to three separate simplified prospectuses dated July 25, 2024, October 24, 2024, and March 28, 2025, in the form prescribed by Form 81-101F1.
9. If the ETF Prospectus Form Relief is granted, it is expected that:
a. on or about July 24, 2025, the Filer will file the final simplified prospectus in the form prescribed by Form 81-101F1 in respect of the Existing Mutual Funds, pursuant to which one or more of the Existing Mutual Funds will offer Mutual Fund Securities and ETF Securities, as a mutual fund that complies with the various requirements of NI 81-102. Fund Facts documents in the form prescribed by Form 81-101F3 for each series or class of Mutual Fund Securities of the Existing Mutual Funds, and ETF Facts documents in the form prescribed by Form 41-101F4 for each class or series of ETF Securities of such Existing Mutual Funds will also be filed.
b. when the Filer or an affiliate determines it is appropriate to transition the Long Form Prospectuses of a Fund to the simplified prospectus regime, the Filer may file a preliminary and pro forma simplified prospectus in the form prescribed by Form 81-101F1, in respect of the Existing ETFs, pursuant to which it will continue to offer ETF Securities and may also offer a new series of Mutual Fund Securities of such Existing ETFs, as a mutual fund that complies with the various requirements of NI 81-102. Fund Facts documents in the form prescribed by Form 81-101F3 for each class or series of Mutual Fund Securities and ETF Facts documents in the form prescribed by Form 41-101F4 for each series or class of ETF Securities will also be filed.
10. Each Existing Fund and each Future Fund is, or will be, a reporting issuer in the Jurisdictions in which it offers Mutual Fund Securities and/or ETF Securities. Each Fund that relies on the Exemption Sought may offer ETF Securities together with Mutual Fund Securities.
11. The Existing Funds currently offer Investor Series, H5 Series, H8 Series, Premium Series, K5 Series, e-Series, D Series, Advisor Series, T5 Series, T8 Series, F-Series, FT5 Series, FT8 Series, W Series, WT5 Series, WT8 Series, Private Series, Private EM Series, Institutional Series, Institutional Class, Class B, O Series, G Series and/or ETF Series to investors.
12. Subject to any exemptions that may be granted by the applicable securities regulatory authorities, each Fund will be subject to NI 81-102 and the Securityholders of each Fund will have the right to vote at a meeting of Securityholders in respect of any matter prescribed by NI 81-102.
13. The Filer or an affiliate has applied, or will apply to list any ETF Securities of each of the Funds that relies on the Exemption Sought on the TSX or another Marketplace. In the case of a Future Fund, the Filer, or an affiliate will not file a final simplified prospectus for the Future Fund in respect of the ETF Securities of the Future Fund until the TSX or another Marketplace has conditionally approved the listing of the ETF Securities of the Future Fund.
14. The Existing Funds are not in default of securities legislation in any of the Jurisdictions.
ETF Prospectus Form and Sales and Redemptions Requirements
15. Mutual Fund Securities may be subscribed for or purchased directly from a Fund through mutual fund dealers, investment dealers and their representatives that are registered under applicable securities legislation in the Jurisdictions in which they are offered for sale.
16. ETF Securities will be distributed on a continuous basis in one or more of the Jurisdictions under a simplified prospectus in the form prescribed by Form 81-101F1. ETF Securities may generally only be subscribed for or purchased directly from the Funds (Creation Units) by Authorized Dealers or the Designated Broker. Generally, subscriptions or purchases may only be placed for a Prescribed Number of ETF Securities (or a multiple thereof) on any day when there is a trading session on the TSX or another Marketplace. Authorized Dealers and/or the Designated Broker subscribe for Creation Units for the purpose of facilitating investor purchases of ETF Securities on the TSX or another Marketplace.
17. In addition to subscribing for and re-selling their Creation Units, Authorized Dealers, the Designated Broker and Affiliate Dealers will also generally be engaged in purchasing and selling ETF Securities of the Funds as Creation Units in the secondary market. Other Dealers may also be engaged in purchasing and selling ETF Securities of the Funds as Creation Units in the secondary market despite not being an Authorized Dealer, the Designated Broker or an Affiliate Dealer that has entered in an agreement with the Filer.
18. The Designated Broker and each Authorized Dealer that subscribes for Creation Units must deliver, in respect of each Prescribed Number of ETF Securities to be issued, a Basket of Securities and/or cash in an amount sufficient so that the value of the Basket of Securities and/or cash delivered to a Fund is equal to the net asset value of the ETF Securities subscribed for, next determined following the receipt of the subscription order for Creation Units.
19. Upon notice given by the Filer from time to time and, in any event, not more than once quarterly, the Designated Broker may be contractually required to subscribe for Creation Units for cash in an amount not to exceed a specified percentage of the net asset value of the Funds or such other amount established by the Filer.
20. The Designated Broker and the Authorized Dealers will not receive any fees or commissions in connection with the issuance of Creation Units to them. On the issuance of Creation Units, the Filer or the Fund may, in the Filer's discretion, charge a fee to the Designated Broker or an Authorized Dealer to offset the expenses incurred in issuing the Creation Units.
21. The Designated Broker performs certain other functions, which include standing in the market with a bid and ask price for ETF Securities for the purpose of maintaining liquidity for the ETF Securities.
22. Except for Authorized Dealers and the Designated Broker subscriptions for Creation Units, as described above, and other distributions that are exempt from the Prospectus Delivery Requirement under the Legislation, ETF Securities generally will not be able to be purchased directly from the Fund. Investors are generally expected to purchase and sell ETF Securities, directly or indirectly, through dealers executing trades through the facilities of the TSX or another Marketplace in Canada. ETF Securities may also be issued directly to Securityholders upon a reinvestment of distributions of income or capital gains.
23. Securityholders that are not the Designated Broker or an Authorized Dealer that wish to dispose of their ETF Securities may generally do so by selling their ETF Securities on the TSX or another Marketplace, through a registered dealer, subject only to customary brokerage commissions. A Securityholder that holds a Prescribed Number of ETF Securities or a multiple thereof may exchange such ETF Securities for Baskets of Securities and/or cash in the discretion of the Filer or an affiliate. Securityholders may also redeem ETF Securities for cash at a redemption price equal to the lesser of 95% of the Market Price of the ETF Securities of the Fund on the TSX or another Marketplace on the date of redemption and the net asset value per ETF Security of the Fund.
ETF Prospectus Form Relief
24. The Filer believes it is more efficient and expedient to include all classes or series of Mutual Fund Securities and ETF Securities of a Fund, in one prospectus form instead of two different prospectus forms and that this presentation will assist in providing full, true and plain disclosure of all material facts relating to the securities of the Fund by permitting disclosure relating to all classes or series of securities to be included in one prospectus.
25. Filer or an affiliate will file ETF Facts in the form prescribed by Form 41-101F4 in respect of each class or series of ETF Securities and will file Fund Facts in the form prescribed by Form 81-101F3 in respect of each class or series of Mutual Fund Securities.
26. The Filer or an affiliate will ensure that any additional disclosure included in the simplified prospectus of each Fund relating to the ETF Securities will not interfere with an investor's ability to differentiate between the Mutual Fund Securities and the ETF Securities and their respective attributes.
27. Each Fund will comply with the provisions of NI 81-101 when filing any prospectus or amendment thereto.
28. Each Fund will comply with Part 3B of NI 41-101 when preparing, filing and delivering ETF Facts for the ETF Securities of the Fund.
Sales and Redemptions Relief
29. Parts 9, 10 and 14 of NI 81-102 do not contemplate both Mutual Fund Securities and ETF Securities being offered in a single fund structure. Accordingly, without the Exemption Sought, the Filer or an affiliate and each Fund, that offers both ETF Securities and Mutual Fund Securities, would not be able to technically comply with those parts of NI 81-102.
30. The Sales and Redemptions Relief will permit the Filer or an affiliate and each Fund that offers both ETF Securities and Mutual Fund Securities to treat the ETF Securities and the Mutual Fund Securities as if such securities were separate funds in connection with their compliance with Parts 9, 10 and 14 of NI 81-102. The Exemption Sought will enable each class or series of the ETF Securities and the Mutual Fund Securities to comply with Parts 9, 10 and 14 of NI 81-102, as appropriate, for the type of security being offered.
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:
1. in respect of the ETF Prospectus Form Relief, the Filer, or an affiliate complies with the following conditions:
(a) the Filer or an affiliate files a simplified prospectus in respect of the ETF Securities in accordance with the requirements of NI 81-101 and Form 81-101F1, other than the requirements pertaining to the filing of a fund facts document;
(b) the Filer or an affiliate includes disclosure required pursuant to Form 41-101F2 (that is not contemplated by Form 81-101F1) in respect of the ETF Securities in each Fund's simplified prospectus; and
(c) the Filer or an affiliate includes disclosure regarding this decision under the heading "Additional Information" in each Fund's simplified prospectus; and
2. in respect of the Sales and Redemptions Relief, the Filer or an affiliate and each Fund comply with the following conditions:
(a) with respect to its Mutual Fund Securities, each Fund complies with the provisions of Parts 9, 10 and 14 of NI 81-102 that apply to mutual funds that are not exchange-traded mutual funds; and
(b) with respect to its ETF Securities, each Fund complies with the provisions of Parts 9 and 10 of NI 81-102 that apply to exchange-traded mutual funds.
"Darren McKall"
Associate Vice President, Investment Management Division
Ontario Securities Commission
Application File #: 2025/0390
SEDAR+ File #: 6300999