Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdiction -- Relief granted to U.S. domiciled funds that became reporting issuers in Canada -- The Funds file U.S. style reporting and became reporting issuers in Canada inadvertently -- The Funds have not followed Canadian reporting obligation requirements -- The Fund has established mechanisms to prohibit retail Canadian investors from purchasing any further securities of the Fund -- Number of Canadian investors in the Fund is declining -- Canadian accounts containing securities of the Fund number less than 1% of the Fund's total net assets.

Applicable Legislative Provisions

Securities Act (Ontario), s. 1(10)(b).

July 22, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, ALBERTA AND QUEBEC

(THE JURISDICTIONS)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE VANGUARD WORLD FUND (the FILER),

INCLUDING THE VANGUARD FTSE SOCIAL INDEX

FUND, VANGUARD INTERNATIONAL GROWTH

FUND AND VANGUARD U.S. GROWTH FUND

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each, a Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer is not a reporting issuer (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

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

1. The Filer is a statutory trust established under the laws of the State of Delaware and offers currently approximately 17 series. The Filer is registered with the United States Securities Exchange Commission as an open-end management investment company.

2. The Vanguard Group, Inc. ("VGI") is the Filer's transfer agent and administrator. The Filer and VGI have their offices in Valley Forge, Pennsylvania.

3. The Filer became a reporting issuer in the Jurisdictions during the late 1960s or early 1970s as a result of a public offering of its shares at that time. Although the records of the three Jurisdictions indicate the Filer is a reporting issuer, the original offering documents could not be located. The offering occurred before VGI became the administrator for the Filer.

4. Historically, there were offerings of three series of the Filer in Canada. Each of the three series comprised a separate fund. These three series were the Vanguard FTSE Social Index Fund, the Vanguard International Growth Fund and Vanguard U.S. Growth Fund (collectively, the Funds). Canadian investors inadvertently purchased securities of the Funds by placing orders via a direct telephone number.

5. Since the time of the offering in Canada until approximately May, 2006, the Filer has been filing its financial statements in accordance with U.S. laws and accounting principles in the Jurisdictions. Since the time of offering in Canada, these statements have been sent to all accountholders including Canadian accountholders. The Filer and the Funds have not filed continuous disclosure in the Jurisdictions prepared in accordance with Canadian disclosure requirements.

6. The Filer is in continuous distribution in the United States. Apart from the original offering, a continuous distribution of the Filer has not occurred in Canada.

7. No securities of the Filer or the Funds are traded on a marketplace as defined in National Instrument 21-101, Marketplace Operation.

8. Neither the Filer nor VGI has any place of business in Canada.

9. The Filer wrote to Canadian shareholders of the Filer in or about November 2007 to inform them that no further purchases of shares from Canadians will be accepted by the Filer. Systems changes designed to prevent Canadian residents (other than institutional investors) from making additional purchases or exchanges of units of the Filer went into effect in December, 2007. The Filer confirms that it has policies and procedures in place designed to limit sales of its funds to Canadian investors, other than any accountholder which is a "permitted client" within the meaning of National Instrument 31-103 Registration Requirements and Exemptions and which purchases on a private placement basis.

10. As a result, the number of Canadian accounts of the Filer has dropped very significantly. As of March 31, 2011, there were approximately 29 existing Canadian accounts in the Funds and Canadian account holders' assets in the Filer accounted for approximately 0.0033% of the total net assets of the Filer.

11. As no further purchases of the Filer are permitted, except as set out in Representation 9, the number of Canadian shareholders in the Funds should continue to decline.

12. The Filer will continue to send its U.S continuous disclosure documents to Canadian accountholders after it ceases to be a reporting issuer in the Jurisdictions.

13. The Filer and the Funds seek to have their status as reporting issuers in Canada formally removed by this Decision.

14. The Filer and the Funds are in default of securities legislation of the Jurisdictions as they have not complied with continuous disclosure requirements and other requirements imposed on reporting issuers in Canada. Although the Filer and the Funds are in default of securities legislation in the Jurisdictions as a reporting issuer, Canadian shareholders in the Funds have received the same continuous disclosure documents as delivered to U.S. shareholders in the Funds in accordance with securities requirements in the United States.

15. The Filer believes that the cost to the Filer of preparing, filing and sending continuous disclosure documents in accordance with Canadian laws given the very small participation of Canadians and given that the participation is expected to decline is undue in the circumstances.

Decision

Each of the Decision Makers is satisfied that the Decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.

"Mary G. Condon"
Vice-Chair
Ontario Securities Commission
 
"Vern Krishna"
Commissioner
Ontario Securities Commission