Purpose Investments Inc. et al.

Headnote

National Policy 11-203 Process For Exemptive Relief Applications in Multiple Jurisdictions -- Approval of mutual fund merger and change of manager -- merger approval required because the mergers do not meet the criteria for pre-approved reorganizations and transfers in National Instrument 81-102 -- manager of a continuing fund is not an affiliate of the manager of the terminating fund -- unitholders of the terminating fund are provided with timely and adequate disclosure regarding the merger -- National Instrument 81-102 Investment Fund.

Applicable Legislative Provisions

National Instrument 81-102 Investment Funds, ss. 5.5(1)(a), 5.5(1)(b), 19.1.

September 30, 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 PURPOSE INVESTMENTS INC. (Purpose) AND HAMILTON CAPITAL PARTNERS INC. (Hamilton) AND PURPOSE GLOBAL FINANCIALS INCOME FUND (the Terminating Fund) AND HAMILTON AUSTRALIAN FINANCIALS YIELD ETF (formerly Hamilton Capital Australian Financials Yield ETF) (the Continuing Fund)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from Purpose and Hamilton (together, the Filers) on behalf of the Terminating Fund and the Continuing Fund (each a Fund and, collectively, the Funds) for a decision under the securities legislation of the Jurisdiction (the Legislation) approving:

(a) the change in manager of the Terminating Fund to Hamilton under section 5.5(1)(a) of National Instrument 81-102 Investment Funds (NI 81-102) (the Change in Manager); and

(b) the merger of the Terminating Fund into the Continuing Fund (the Merger), pursuant to paragraph 5.5(1)(b) of NI 81-102.

The Change in Manager together with the Merger is referred to herein as the Approval 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 Filers have 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 the Jurisdiction (together with the Jurisdiction, the Jurisdictions).

Interpretation

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

Representations

The decision is based on the following facts represented by the Filers:

Purpose

1. Purpose is a corporation amalgamated under the Business Corporations Act (Ontario) with its head office located in Toronto, Ontario.

2. Purpose is registered as: (i) an investment fund manager in Ontario, Québec and Newfoundland and Labrador; (ii) a portfolio manager in British Columbia, Ontario and Québec; (iii) a commodity trading manager in Ontario; and (iv) as an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan.

3. Purpose is the investment fund manager and trustee of the Terminating Fund.

4. Purpose is not in default of any of the requirements of the securities legislation of any of the provinces and territories of Canada.

Hamilton

5. Hamilton is a corporation organized under the laws of Ontario with a head office in Toronto.

6. Hamilton is registered as: (i) an investment fund manager in Ontario, Quebec and Newfoundland & Labrador; (ii) an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrador, Northwest Territories, Nova Scotia, Ontario, Prince Edward Island, Quebec and Saskatchewan; and (iii) a portfolio manager in Ontario.

7. Hamilton is the investment fund manager and trustee of the Continuing Fund.

8. Hamilton's primary business is to manage and act as portfolio advisor to a suite of exchange-traded funds, including the Continuing Fund.

9. Hamilton is not in default of any of the requirements of the securities legislation of any of the provinces and territories of Canada.

The Funds

10. Each Fund is an open-ended mutual fund trust established under the laws of the Province of Ontario and each are governed by the provisions of NI 81-102.

11. The Terminating Fund is an exchange traded mutual fund with ETF Class units outstanding (the Terminating Fund ETF Units).

12. The Terminating Fund is not currently offered by prospectus (its securities were previously offered by way of simplified prospectus and a related annual information form) and Terminating Fund ETF Units are therefore no longer available for purchase and are not qualified for distribution in any province or territory of Canada. The Terminating Fund ETF Units are, however, still listed and may be traded on the Toronto Stock Exchange (the TSX) under the ticker symbol, "PFG".

13. The Terminating Fund previously offered Class A and Class F mutual fund units, however, no such mutual fund units are currently outstanding and none will be issued prior to the Effective Date (as defined below).

14. The Continuing Fund is an exchange traded mutual fund with Class E -- ETF units (Continuing Fund ETF Units) outstanding.

15. Continuing Fund Units are qualified for sale in each of the provinces and territories of Canada pursuant to a long form prospectus and ETF facts (together, the Continuing Fund Offering Documents). Continuing Fund ETF Units are also listed and traded on the TSX under the ticker symbol, "HFA".

16. The Funds are reporting issuers as defined under the applicable securities legislation of each province and territory of Canada and are not in default of any of the requirements of the securities legislation of any of the provinces and territories of Canada.

17. Other than under circumstances in which the securities regulatory authority or securities regulator of a province or territory of Canada has expressly exempted a Fund therefrom, each of the Funds follow the standard investment restrictions and practices established by NI 81-102.

Reasons for the Exemption Sought

18. Regulatory approval of the Change in Manager is required because Purpose and Hamilton are unaffiliated entities and, under section 5.5(1)(a) of NI 81-102, the approval of the regulator is required before the manager of an investment fund is changed, unless the new manager is an affiliate of the current manager.

19. Regulatory approval of the Merger is required because the Merger does not satisfy all of the criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-- 102. In particular:

(a) as Purpose and Hamilton are unaffiliated entities, the Continuing Fund is not managed by the same manager, or an affiliate, as the manager of the Terminating Fund;

(b) the fundamental investment objective of the Continuing Fund may not be considered to be "substantially similar" by a reasonable person to the investment objective of the Terminating Fund; and

(c) the fee structure of the Continuing Fund is not, or may be considered not to be, "substantially similar" by a reasonable person to the fee structure of the Terminating Fund.

20. Except as described in this decision, the Merger complies with all other criteria for pre-approved reorganizations and transfers set out in section 5.6 of NI 81-102.

The Change in Manager

21. It is expected that all of the current officers and directors of Hamilton will continue on in their current capacities.

22. The members of the Hamilton management team have the requisite integrity and experience as required under NI 81-102.

23. Following the completion of the Change in Manager and the Merger, the Continuing Fund will continue to be managed in a manner consistent with the management of the other existing exchange traded funds managed by Hamilton.

The Proposed Merger/Transaction

24. In accordance with National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106), a press release was issued on September 3, 2019 whereby the Filers announced that they had entered into an agreement (the Transaction Agreement) pursuant to which the parties agreed that the Terminating Fund will be merged into the Continuing Fund, subject to approval by the securityholders of the Terminating Fund, obtaining all necessary regulatory approvals and the satisfaction of all other conditions precedent set out in the Transaction Agreement. A material change report with respect to the proposed Merger was filed on SEDAR on September 6, 2019.

25. Pursuant to National Instrument 81-107 -- Independent Review Committee for Investment Funds, the independent review committee of the Terminating Fund (the IRC) will review the proposed Merger as a potential "conflict of interest" matter and the process to be followed in connection with the Merger and will determine if the Merger will achieve a fair and reasonable result for the Terminating Fund. The determination of the IRC will be disclosed in the Circular.

26. Hamilton has concluded that the Merger is not material to the Continuing Fund, and accordingly, there is no intention to convene a meeting of securityholders of the Continuing Fund.

27. A notice of meeting, a management information circular (the Circular) and a form of proxy in connection with the special meeting of securityholders of the Terminating Fund, expected to be held on or about October 17, 2019 (the Meeting), will be mailed to securityholders of the Terminating Fund and filed on SEDAR on or before September 26, 2019 (the Mailing Date).

28. The Circular prepared in connection with the Meeting to approve the Merger will provide a comparison of the fundamental investment objectives, fee structures, other material differences between the Funds, and the tax consequences of the Merger to the Terminating Fund, the Continuing Fund and their securityholders. The Circular will also include a copy of the ETF Facts of the Continuing Fund. The Circular will also describe the various ways in which securityholders of the Terminating Fund can obtain, at no cost, a copy of the Continuing Fund Offering Documents, its most recent interim and annual financial statements and management reports of fund performance. Accordingly, securityholders of the Terminating Fund will be provided with sufficient information to make an informed decision about the Merger.

29. As the Terminating Fund is no longer in continuous distribution, the Terminating Fund has no offering documents which are required to be amended owing to the announcement of the proposed Merger and the entering into of the Transaction Agreement.

30. As the proposed Merger would not constitute a material change for the Continuing Fund, approval by securityholders of the Continuing Fund is not required, nor is any amendment required to the Continuing Fund Offering Documents.

31. While the investment objectives of the Funds are not, in the view of the Filers, substantially similar, if the Merger is approved, securityholders of the Terminating Fund will gain exposure to the Australian financial services sector. Such sector has traditionally provided high dividends and a history of long-term outperformance versus the Canadian financials sector. Given its current yield, the Continuing Fund is therefore likely appropriate for investors seeking monthly dividends and portfolio diversification from a group of companies operating in a successful economic market.

32. Purpose and/or Hamilton will pay for the costs of the Merger. These costs consist mainly of legal, proxy solicitation, printing, mailing, brokerage costs and regulatory fees.

33. If all required approvals are obtained, it is expected that the Merger will be effective on or about October 25, 2019 (the Effective Date).

34. If the Merger does not receive the required securityholder or regulatory approvals, the Change in Manager will not occur, Purpose and Hamilton will not proceed with the Merger, and the Terminating Fund will be terminated on or about November 29, 2019.

Procedure for the Merger

35. The Merger will be structured substantially as follows:

(a) The board of directors of Purpose and Hamilton will each approve the Merger.

(b) Pursuant to subsection 5.1(f) of NI 81-102, securityholders of the Terminating Fund will be asked to approve the Merger at the Meeting.

(c) The trust documentation of each Fund will be amended, as may be required, to permit such actions as are necessary to complete the Merger.

(d) Prior to the Merger, as required, the Terminating Fund will sell any securities in its portfolio that do not meet the investment objective and investment strategies of the Continuing Fund. As a result, the Terminating Fund may temporarily hold cash or money market instruments and may not be fully invested in accordance with its investment objective for a brief period of time prior to the Merger being effected.

(e) The value of the Terminating Fund's investment portfolio and other assets will be determined at the close of business on the Effective Date in accordance with the constating documents of the Terminating Fund.

(f) The Terminating Fund and the Continuing Fund will declare, pay and automatically reinvest a distribution to its securityholders of net realized capital gains and net income, if any, to ensure that it will not be subject to tax for its current tax year.

(g) The Terminating Fund's assets and liabilities, after satisfying or providing for any outstanding liabilities, will be transferred to the Continuing Fund. In return, Continuing Fund Units will be issued to the Terminating Fund by the Continuing Fund having an aggregate net asset value equal to the value of the assets transferred to the Continuing Fund.

(h) Immediately thereafter, Continuing Fund ETF Units received by the Terminating Fund will be distributed to securityholders of the Terminating Fund in exchange for their securities in the Terminating Fund on a dollar-for-dollar basis. All Terminating Fund ETF Units will be exchanged for Continuing Fund ETF Units.

36. No redemption fee, sales charges, commissions or other fees will be payable by unitholders of the Terminating Fund in connection with the Merger.

37. The Terminating Fund ETF Units will, subject to the approval of the TSX, be de-listed from the TSX in advance of the Effective Date (the De-Listing Date).

38. The Terminating Fund will be wound-up as soon as practicable and, in any case, within 30 days following the Effective Date.

39. As noted above, as the Terminating Fund is no longer in continuous distribution, Terminating Fund unitholders may not currently purchase Terminating Fund Securities. However, should the Merger receive all required approvals, ETF securityholders of the Terminating Fund may still trade such securities on the TSX up until the close of business on the De-Listing Date.

40. The Merger will be a qualifying exchange under the Income Tax Act (Canada) (the Tax Act). Accordingly, the disposition of Terminating Fund Securities in connection with the Merger will be effected on a tax deferred "rollover" basis for unitholders of the Terminating Fund.

Merger Benefits

41. The Filers believe that the Merger will be beneficial to securityholders of the Funds for the following reasons:

(a) Hamilton is an independent investment management firm that is focussed on growing its investment management business. As part of Hamilton's growth strategy, Hamilton has determined it is appropriate to acquire additional assets under management. As the Terminating Fund was created by a similarly independent investment fund manager, Hamilton believes the addition of the Terminating Fund, through the Merger, would be a natural fit for existing Terminating Fund securityholders and their advisors.

(b) As the Terminating Fund is no longer in continuous distribution, it is no longer able to attract new assets and has no current potential for growth. Hamilton is an exchange-traded fund manager with significant resources to grow the Continuing Fund. Such growth may lead to economies of scale that may benefit Securityholders. As noted, further growth opportunities are not currently available to the Terminating Fund. As noted, if the Merger is not approved, the Terminating Fund will be terminated.

(c) The Merger has the potential to lower costs for Securityholders as the operating costs and expenses of the Continuing Fund will be spread over a greater pool of assets when the Terminating Fund merges into the Continuing Fund, potentially resulting in a lower management expense ratio for the Continuing Fund than may occur otherwise.

(d) The Continuing Fund will have an asset base of greater size, potentially allowing for increased portfolio diversification opportunities and a smaller proportion of assets set aside to fund redemptions. The ability to improve diversification may lead to increased returns and a reduction of risk, while at the same time creating a higher profile that may attract more investors.

(e) The management expense ratio of the Continuing Fund is lower than that of the Terminating Fund (after waivers and absorptions). Therefore, although Securityholders of the Terminating Fund will be subject to a slight management fee increase if the Merger is approved, it is anticipated that the Continuing Fund will have a lower, overall expense profile

(f) The risk rating for the Continuing Fund is "Medium", whereas the risk rating for the Terminating Fund is "Medium-to-High". Such lower risk rating may make the Continuing Fund more suitable for less risk averse investors.

(g) Hamilton manages a limited number of exchange-traded funds, as compared to Purpose. Hamilton focuses only on the global financial services sector and has a large and experienced portfolio management team with over 60 years of combined experience specializing in only the global financials sector. Consequently, it is anticipated that the Continuing Fund could attract more assets as marketing efforts by Hamilton will be concentrated on fewer funds within a defined industry sector. The ability to attract assets in the Continuing Fund will benefit investors by ensuring that the Continuing Fund remains a viable, long-term, attractive investment vehicle for existing and potential investors.

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 Approval Sought is granted, provided that the Filers obtain the prior approval of the unitholders of the Terminating Fund for the Merger at a special meeting held for that purpose.

"Darren McKall"

Manager

Investment Funds & Structured Products Branch

Ontario Securities Commission