Invesco Canada Ltd. et al. – s. 80 of the CFA

Headnote

Section 80 of the Commodity Futures Act (Ontario) -- Relief from the adviser registration requirement of paragraph 22(1 )(b) of the CFA granted to sub-advisers headquartered in foreign jurisdictions in respect of advice regarding trades in commodity futures contracts and commodity futures options, subject to certain terms and conditions -- Relief mirrors exemption available in section 8.26.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations made under the Securities Act (Ontario) -- Relief is subject to a sunset clause.

Applicable Legislative Provisions

Commodity Futures Act (Ontario), R.S.O. 1990, c. C.20, as am., ss. 1(1), 22(l)(b) and 80.

Securities Act (Ontario), R.S.O. 1990, c. S.5, as am., s. 25(3).

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 8.26.1.

Ontario Securities Commission Rule 35-502 Non-Resident Advisers, s. 7.11.

Applicable Orders

In the Matter of Invesco Canada Ltd., Invesco Advisers, Inc., and Invesco Asset Management Limited (July 19, 2013).

November 5, 2019

IN THE MATTER OF THE COMMODITY FUTURES ACT, R.S.O. 1990, CHAPTER C.20, AS AMENDED (the CFA) AND IN THE MATTER OF INVESCO CANADA LTD., INVESCO ADVISERS, INC., AND INVESCO ASSET MANAGEMENT LIMITED

ORDER (Section 80 of the CFA)

UPON the application (the Application) of Invesco Canada Ltd. (the Principal Adviser), and Invesco Advisers, Inc. and Invesco Asset Management Limited (each, a Sub-Adviser and, collectively, the Sub-Advisers) to the Ontario Securities Commission (the Commission) for an order, pursuant to section 80 of the CFA, that each of the Sub-Advisers and any individuals engaging in, or holding themselves out as engaging in, the business of advising others when acting on behalf of their respective Sub-Advisers in respect of the Sub-Advisory Services (as defined below) (the Representatives) be exempt, for a specified period of time, from the adviser registration requirements of paragraph 22(1)(b) of the CFA when acting as a sub-adviser to the Principal Adviser in respect of the Clients (as defined below) regarding commodity futures contracts and commodity futures options (collectively, the Contracts) traded on commodity futures exchanges and cleared through clearing corporations;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Principal Adviser and the Sub-Advisers having represented to the Commission that:

1. The Principal Adviser is a corporation amalgamated under the laws of the Province of Ontario and its principal place of business is in Toronto, Ontario.

2. The Principal Adviser is currently registered (i) as an adviser in the category of portfolio manager and a dealer in the category of exempt market dealer in each of the provinces of Canada, (ii) as an investment fund manager in the provinces of Ontario, Quebec and Newfoundland and Labrador, (iii) as a mutual fund dealer in the provinces of Ontario, Quebec, British Columbia, Alberta, Nova Scotia and Prince Edward Island, and (iv) as an adviser in the category of commodity trading manager in Ontario.

3. The Principal Adviser is registered as an investment adviser and as a transfer agent with the United States Securities and Exchange Commission (SEC) and as an investment manager with the Central Bank of Ireland.

4. The Principal Adviser is an indirect wholly-owned subsidiary of Invesco Ltd., a publicly-traded company listed on the New York Stock Exchange. As such, the Principal Adviser leverages the global expertise of investment professionals at its affiliates worldwide.

5. Invesco Advisers, Inc. is a corporation formed under the laws of the State of Delaware, United States of America. The head office of Invesco Advisers, Inc. is located in Atlanta, Georgia in the United States of America.

6. Invesco Advisers, Inc. is currently registered as an investment adviser with the SEC and is also registered as a commodity trading adviser and commodity pool operator with the U.S. Commodity Futures Trading Commission (the CFTC).

7. Invesco Asset Management Limited is a corporation formed under the laws of England and Wales. The head office of Invesco Asset Management Limited is located in Henley-on-Thames, United Kingdom.

8. Invesco Asset Management Limited is an authorised person for the purposes of the Financial Services & Markets Act 2000 and is authorised and regulated to carry on investment business in the United Kingdom by virtue of its authorisation by the Financial Services Authority. Invesco Asset Management Limited is also currently registered as an investment adviser with the SEC and is exempted from registration as a commodity trading adviser or commodity pool operator with the CFTC.

9. Each Sub-Adviser is registered in a category of registration, or operates under an exemption from registration, under the commodity futures or other applicable legislation of the jurisdiction in which its head office is located that permits it to carry on the activities in that jurisdiction that registration as an adviser under the CFA would permit it to carry on in Ontario. As such, each Sub-Adviser is authorized and permitted to carry on the Sub-Advisory Services (as defined below) in the jurisdiction in which its head office is located.

10. Each Sub-Adviser engages in the business of an adviser in respect of Contracts in its principal jurisdiction.

11. None of the Sub-Advisers is registered in any capacity under the CFA or under the securities legislation of any province or territory of Canada. However, each Sub-Adviser is currently availing itself of the sub-adviser registration exemption in section 8.26.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).

12. Except to the extent that relief is required by the Sub-Advisers to provide the Sub-Advisory Services in respect of Contracts to the Clients, the Principal Adviser and the Sub-Advisers are not in default of securities legislation, commodity futures legislation or derivatives legislation in any jurisdiction of Canada. Each Sub-Adviser is in compliance in all material respects with the securities laws, commodity futures laws and derivatives laws in each jurisdiction outside of Canada in which its head office or principal place of business is located.

13. The Principal Adviser provides portfolio management services in Ontario to (i) investment funds, the securities of which are qualified by prospectus for distribution to the public in Ontario and the other provinces and territories of Canada (Retail Funds); (ii) pooled funds, the securities of which are sold on a private placement basis in Ontario and certain other provinces and territories of Canada pursuant to prospectus exemptions contained in National Instrument 45-106 Prospectus Exemptions (Pooled Funds); (iii) managed accounts of clients who have entered into investment management agreements with the Principal Adviser (Managed Accounts); and (iv) other Retail Funds, Pooled Funds and Managed Accounts that may be established in the future in respect of which the Principal Adviser engages a Sub-Adviser to provide portfolio advisory services (Future Clients) (each of the Retail Funds, Pooled Funds, Managed Accounts and Future Clients being referred to, individually, as a Client and, collectively, as the Clients.)

14. Clients may, as part of their investment program, invest in Contracts. The Principal Adviser acts, or will act, as a commodity trading manager in respect of such Clients.

15. In connection with the Principal Adviser acting as an adviser to Clients in respect of the purchase or sale of Contracts, the Principal Adviser has retained, or will retain, the respective Sub-Adviser, pursuant to a written agreement made between the Principal Adviser and each respective Sub-Adviser, to act as a sub-adviser to the Principal Adviser in respect of Contracts in which that Sub-Adviser has experience and expertise by exercising discretionary investment authority on behalf of the Principal Adviser, in respect of all or a portion of the assets of the investment portfolio of the respective Client, which may include discretionary authority to buy or sell Contracts for the Client (Sub-Advisory Services), provided that such investments are consistent with the investment objectives and strategies of the applicable Client.

16. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA or is registered as a representative or as a partner or an officer of a registered adviser and is acting on behalf of such registered adviser.

17. By providing the Sub-Advisory Services, each Sub-Adviser and its Representatives will be engaging in, or holding themselves out as engaging in, the business of advising others in respect of Contracts and, in the absence of being granted the requested relief, would be required to register as an adviser or a representative of an adviser, as the case may be, under the CFA.

18. There is presently no rule or regulation under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA that is similar to the exemption from the adviser registration requirement in subsection 25(3) of the Securities Act (Ontario)(the OSA) which is provided under section 8.26.1 of NI 31-103.

19. Each of the Sub-Advisers will only provide the Sub-Advisory Services as long as the Principal Adviser is, and remains, registered under the CFA as an adviser in the category of commodity trading manager.

20. The relationship among the Principal Adviser, any Sub-Adviser and any Client is, or will be, consistent with the requirements of section 8.26.1 of NI 31-103, namely that:

(a) the obligations and duties of each Sub-Adviser are, or will be, set out in a written agreement with the Principal Adviser;

(b) the Principal Adviser has entered into, or will enter into, a written contract with each Client, agreeing to be responsible for any loss that arises out of the failure of any Sub-Adviser:

(i) to exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Principal Adviser and each Client; or

(ii) to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances (together with (i), the Assumed Obligations).

21. The written agreement between the Principal Adviser and each Sub-Adviser sets out, or will set out, the obligations and duties of each party in connection with the Sub-Advisory Services and permits, or will permit, the Principal Adviser to exercise the degree of supervision and control it is required to exercise over the applicable Sub-Adviser in respect of the Sub-Advisory Services.

22. The Principal Adviser will deliver to the Clients all applicable reports and statements required under applicable securities, commodity futures and derivatives legislation.

23. The prospectus or other offering document (in either case, the Offering Document) of each Client that is a Retail Fund or a Pooled Fund and for which the Principal Adviser engages one or more Sub-Advisers to provide the Sub-Advisory Services includes, or will include, the following disclosure (the Required Disclosure):

(a) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of any Sub-Adviser to meet the Assumed Obligations; and

(b) a statement that there may be difficulty in enforcing any legal rights against the Sub-Advisers (or any of its Representatives) because the Sub-Advisers are resident outside of Canada and all or substantially all of their assets are situated outside of Canada.

24. The Required Disclosure is provided in writing prior to the purchasing of any Contracts for each Client that is a Managed Account for which the Principal Adviser engages a Sub-Adviser to provide the Sub-Advisory Services.

AND UPON the Commission being of the opinion that to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 80 of the CFA, that each Sub-Adviser and its Representatives is exempt from the adviser registration requirements in paragraph 22(1)(b) of the CFA when acting as a sub-adviser to the Principal Adviser in respect of the Sub-Advisory Services provided that at the time that such activities are engaged in:

(a) the Principal Adviser is registered under the CFA as an adviser in the category of commodity trading manager;

(b) the Sub-Adviser's head office or principal place of business is in a jurisdiction outside of Canada;

(c) the Sub-Adviser is registered in a category of registration, or operates under an exemption from registration, under the commodity futures or other applicable legislation of the jurisdiction outside of Canada in which its head office or principal place of business is located, that permits it to carry on the activities in that jurisdiction that registration as an adviser under the CFA would permit it to carry on in Ontario;

(d) the Sub-Adviser engages in the business of an adviser in respect of Contracts in the jurisdiction outside of Canada in which its head office or principal place of business is located;

(e) the obligations and duties of the Sub-Adviser are set out in a written agreement with the Principal Adviser;

(f) the Principal Adviser has entered into a written agreement with each Client, agreeing to be responsible for any loss that arises out of any failure of the Sub-Adviser to meet the Assumed Obligations;

(g) the Offering Document of each Client that is a Retail Fund or Pooled Fund and for which the Principal Adviser engages the Sub-Adviser to provide the Sub-Advisory Services includes the Required Disclosure; and

(h) the Required Disclosure was provided in writing prior to the purchasing of any Contracts for each Client that is a Managed Account for which the Principal Adviser engages the Sub-Adviser to provide the Sub-Advisory Services;

AND IT IS FURTHER ORDERED that this Order will terminate on the earliest of:

(a) the expiry of any transition period as may be provided by law, after the effective date of the repeal of the CFA;

(b) six months, or such other transition period as may be provided by law, after the coming into force of any amendment to Ontario commodity futures law (as defined in the CFA) or Ontario securities law (as defined in the OSA) that affects the ability of a Sub-Adviser to act as a sub-adviser to the Principal Adviser in respect of the Sub-Advisory Services; and

(c) five years after the date of this Order.

Date: ____________________

"Garnet W. Fenn"	"Poonam Puri"
Vice-Chair or Commissioner	Vice-Chair or Commissioner
Ontario Securities Commission	Ontario Securities Commission