National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to mutual funds for extensions of lapse dates of their prospectuses -- Filer will incorporate offering of the funds under the same offering documents when they are renewed -- Extensions of lapse dates will not affect the currency or accuracy of the information contained in the current prospectuses.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S. 5, as amended, ss. 62(5).
December 19, 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 HORIZONS ETFS MANAGEMENT (CANADA) INC. (the Filer) AND IN THE MATTER OF HORIZONS CHINA HIGH DIVIDEND YIELD INDEX ETF AND HORIZONS S&P/TSX 60 EQUAL WEIGHT INDEX ETF (the Funds)
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Funds for a decision under the securities legislation of the Jurisdiction (the Legislation) that the time limits for the renewal of the long form prospectuses of the Funds (the Prospectuses) be extended to those time limits that would apply if the lapse date were April 10, 2020 (the Requested Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(i) the Ontario Securities Commission is the principal regulator for this application; and
(ii) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision unless otherwise defined.
This decision is based on the following facts represented by the Filer.
1. The Filer is a corporation incorporated under the laws of Canada. The Filer's head office is located in Toronto, Ontario.
2. The Filer is registered as a portfolio manager in Alberta, British Columbia, Ontario and Québec, an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan, a commodity trading manager and a commodity trading adviser in Ontario and an investment fund manager in each of Ontario, Québec and Newfoundland and Labrador. The Filer is the investment fund manager of the Funds.
3. Each Fund is an exchange-traded mutual fund (ETF) established under the laws of Ontario, and is a reporting issuer as defined in the securities legislation of each of the Jurisdictions.
4. Neither the Filer nor any of the Funds are in default of securities legislation in any of the Jurisdictions.
5. The Funds currently distribute securities in the Jurisdictions under the Prospectuses. Securities of Horizons China High Dividend Yield Index ETF and Horizons S&P/TSX 60 Equal Weight Index ETF trade on the Toronto Stock Exchange under the ticker symbols "HCN" and "HEW", respectively.
6. Pursuant to subsection 62(1) of the Act, the lapse dates of the Prospectuses are January 24, 2020 (for Horizons China High Dividend Yield Index ETF) and February 7, 2020 (for Horizons S&P/TSX 60 Equal Weight ETF) (each a Lapse Date and collectively, the Lapse Dates). Accordingly, under subsection 62(2) of the Act, the distribution of securities of the Funds would have to cease on the applicable Lapse Date unless: (i) each Fund files a pro forma prospectus at least 30 days prior to the applicable Lapse Date; (ii) the final prospectus is filed no later than 10 days after the applicable Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days of the applicable Lapse Date.
7. The Filer is the investment fund manager of ten other ETFs as listed in Appendix A (the Other Funds) that currently distribute their securities to the public under one prospectus that has a lapse date of April 10, 2020 (the Other Funds Prospectus).
8. The Filer wishes to combine the Prospectuses with the Other Funds Prospectus in order to reduce renewal, printing and related costs of the Funds and the Other Funds. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of the Funds in the Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer's fund platform. The Funds share many common operational and administrative features with the Other Funds and combining them in the same prospectus will allow investors to more easily compare their features.
9. It would be unreasonable to incur the costs and expenses associated with preparing three separate renewal prospectuses given how close in proximity the Lapse Dates are to one another.
10. There have been no material changes in the affairs of each Fund since the date of the applicable Prospectus. Accordingly, the Prospectus and current ETF Facts of each Fund represents current information regarding such Fund.
11. Given the disclosure obligations of the Filer and the Funds, should any material change in the business, operations or affairs of the Funds occur, the Prospectus and the current ETF Facts of each Fund will be amended as required under the Legislation.
12. New investors of the Funds will receive delivery of the most recently filed ETF Facts of each Fund. The current Prospectuses will remain available to investors upon request.
13. The Requested Relief will not affect the accuracy of the information contained in the Prospectuses and will therefore not be prejudicial to the public interest.
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 Requested Relief is granted.
The Other Funds
Horizons US Dollar Currency ETF
Horizons Canadian Midstream Oil & Gas Index ETF
Horizons Cdn Insider Index ETF
Horizons Canadian Dollar Currency ETF
Horizons Marijuana Life Sciences Index ETF
Horizons Inovestor Canadian Equity Index ETF
Horizons Robotics and Automation Index ETF
Horizons Blockchain Technology and Hardware Index ETF
Horizons Global Sustainability Leaders Index ETF
Horizons Industry 4.0 Index ETF