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Aon Hewitt Investment Management Inc.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from the investment fund conflict of interest investment restrictions in securities legislation to permit pooled funds to invest in underlying pooled funds, subject to conditions.
Applicable Legislative Provisions
Securities Act (Ontario), R.S.O. 1990, c. S.5, as am., ss. 111(2)(b), 111(4), 113.
February 5, 2016
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 AON HEWITT INVESTMENT MANAGEMENT INC. (the Filer) AND IN THE MATTER OF THE TOP FUNDS (as defined below)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the mutual funds listed in Schedule "A" hereto (the Initial Top Funds) and any other mutual fund which is not a reporting issuer under the securities legislation of the Jurisdiction (the Legislation) that is advised or managed by the Filer or an affiliate of the Filer (the Future Top Funds, and together with the Initial Top Funds, the Top Funds) which invests its assets in securities of the corresponding investment fund listed in Schedule "A" hereto (the Initial Underlying Funds) and any other investment fund which is not a reporting issuer under the Legislation (collectively with the Initial Underlying Funds, the Underlying Funds), for a decision under the Legislation exempting the Filer and the Top Funds from:
(a) the restriction in the Legislation that prohibits an investment fund from knowingly making an investment in a person or company in which the investment fund, alone or together with one or more related investment funds, is a substantial security holder; and
(b) the restriction in the Legislation that prohibits an investment fund, its management company or its distribution company from knowingly holding an investment described in paragraph (a) above
(collectively, the Requested Relief).
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 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 Alberta.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Initial AHIC Underlying Funds means U.S. Equity Fund, Global Equity Fund and Non-U.S. Equity Fund, each a series of Aon Hewitt Institutional Funds, LLC, a limited liability corporation established under the laws of Delaware.
Initial TD Underlying Funds means the investment funds for which TD Asset Management Inc. will be the investment fund manager.
Representations
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation incorporated under the laws of Canada with its head office in Toronto, Ontario.
2. The Filer is registered as an investment fund manager in Ontario, Quebec and Newfoundland and Labrador and as a portfolio manager and exempt market dealer in each of Ontario, Alberta, British Columbia, Newfoundland and Labrador, Quebec and Saskatchewan.
3. The Filer is not a reporting issuer in any jurisdiction in Canada and is not in default of securities legislation of any jurisdiction in Canada.
4. The Filer is wholly owned by Aon Hewitt Inc. and indirectly wholly owned by Aon plc.
5. The Filer is the investment fund manager and portfolio manager of the Initial Top Funds.
6. The Filer or an affiliate of the Filer will be the investment fund manager and/or portfolio manager of Future Top Funds established under the laws of Ontario or another jurisdiction of Canada.
Top Funds
7. The Initial Top Funds are open-ended mutual funds established as trusts under the laws of Ontario.
8. The Future Top Funds will be open-ended mutual funds structured as limited partnerships, trusts or corporations under the laws of Ontario or another jurisdiction of Canada.
9. None of the Top Funds is or will be a reporting issuer in any jurisdiction of Canada.
10. Each of the Top Funds is or will be a "mutual fund" for the purposes of the Legislation.
11. The assets of the Initial Top Funds are held by CIBC Mellon Trust Company. The assets of the Future Top Funds will be held in the custody of a trust company incorporated, and licensed or registered, under the laws of Canada or a jurisdiction, or a bank listed in Schedule I, II or III of the Bank Act (Canada) or a qualified affiliate of such bank or trust.
12. Each Initial Top Fund intends to invest substantially all of its assets in securities of a particular Initial Underlying Fund, as reflected in Schedule "A". A Future Top Fund may invest its assets in one or more Future Underlying Funds.
13. The securities of each Top Fund are or will be sold in Canada solely pursuant to available exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions (NI 45-106) or the Legislation.
14. All investors in the Top Fund will be "permitted clients", as such term is defined in National Instrument 31-103 -- Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103). Typically they will fall within paragraph (e) of the "permitted client" definition but some may instead fall within paragraphs (g), (i), (n) or (q) of the "permitted client" definition.
15. All investors in the Top Funds will enter into an agreement with the Filer for pension consulting services.
16. The Filer will not charge any management fees to the Top Fund. Investors in the Top Funds will pay fees directly to the Filer for the advice the Filer provides in relation to overall investment needs, asset allocation of the client's portfolio and selection of third party investment fund managers and/or sub-advisors. These fees are independently negotiated between the client and the Filer and are paid outside the Top Funds.
Underlying Funds
17. Each Initial AHIC Underlying Fund is a series of Aon Hewitt Institutional Funds, LLC (AHIC), a limited liability corporation established under the laws of Delaware, for which Aon Hewitt Investment Consulting, Inc., an affiliate of the Filer, acts as the investment fund manager. Each of the Initial AHIC Underlying Funds is an investment fund under the Legislation. The assets of the Initial AHIC Underlying Funds are held in the custody of the Bank of New York Mellon.
18. Each Initial TD Underlying Fund will be an investment fund under the Legislation which is established as a trust under the laws of Ontario for which TD Asset Management Inc., an entity unrelated to the Filer, will act as the investment fund manager.
19. The Future Underlying Funds will be investment funds which are established as limited partnerships, trusts or corporations under the laws of Ontario, another jurisdiction of Canada or a foreign jurisdiction.
20. Securities of each Underlying Fund will be sold to investors in Canada solely pursuant to available exemptions from the prospectus requirements under NI 45-106 or the Legislation.
21. The Initial Underlying Funds will not be reporting issuers in any jurisdiction of Canada and no Future Underlying Fund will be a reporting issuer in any jurisdiction of Canada.
22. Each of the Underlying Funds will have separate investment objectives, strategies and/or restrictions.
23. Certain Underlying Funds may invest its assets in securities of one or more investment funds each managed by a third party investment fund manager (each a Bottom Fund).
24. Each Underlying Fund and Bottom Fund, in each case managed by a third party not affiliated with the Filer, must be deemed by the Filer or AHIC to meet the extensive due diligence criteria of having a well-controlled institutional operating environment, and the quality, competency and security of the custodian of each such Underlying Fund and Bottom Fund is considered in this due diligence process.
25. Securities of the Bottom Funds are considered to be liquid assets. To the extent illiquid assets (as defined in National Instrument 81-102 Investment Funds (NI 81-102)) are held by an Underlying Fund or a Bottom Fund, such illiquid assets will comprise less than 10% of the net asset value (NAV) of such Underlying Fund or Bottom Fund.
26. An investment by a Top Fund in an Underlying Fund will be effected based on an objective NAV of the Underlying Fund. An investment by an Underlying Fund in a Bottom Fund will be effected based on an objective NAV of the Bottom Fund.
Fund-on-Fund Structures
27. The Filer proposes to operate the Top Funds under a "manager of managers" structure whereby the Filer will either invest the Top Funds in Underlying Funds (which may be managed by an affiliate or a third party manager) and/or appoint various sub-advisors (each a Sub-Advisor and collectively, the Sub-Advisors) to assist in the management of the investment portfolios of the Top Funds. The structures that the Filer contemplates are outlined in paragraph 33 below.
28. The Filer selects Underlying Funds and Sub-Advisors from a universe of potential investments by utilizing a formal rating process, which analyzes data across several key categories (including business, investment staff, investment process, investment risk, performance, terms and conditions, and operations) and individual factors and assigns a score ranging from 0 to 100. Products scoring 50 or above are eligible for the more extensive due diligence and ratings review process that may lead to a "Buy" rating.
29. The Filer does not expect that the assets directed to any third party Underlying Fund manager, Sub-Advisor or Bottom Fund manager by the Filer and its affiliates will exceed 20% of the assets under management of such Underlying Fund manager, Sub-Advisor or Bottom Fund manager.
30. Currently, each Initial Top Fund intends to invest substantially all of its assets in securities of a particular Initial Underlying Fund, as reflected in Schedule "A". An Initial Top Fund may cease to allocate 100% of its assets to investing in its Initial Underlying Fund and instead allocate its investments to one or more Underlying Funds or to invest directly in a portfolio of securities, depending upon the Filer's view of the best method by which to obtain the desired investment exposure from the best portfolio manager for the asset class, as identified by the Filer from time to time. A Future Top Fund may invest its assets in one or more Future Underlying Funds.
31. Similarly, where the Filer delegates its portfolio management responsibilities in respect of a Top Fund to one or more Sub-Advisors, the Filer will allocate a portion of the assets of one or more Top Funds to a Sub-Advisor to manage. The percentage allocated by the Filer to each Sub-Advisor may fluctuate from time to time based on the Filer's view of the best Sub-Advisor for the asset class, as identified by the Filer from time to time. Pursuant to the authority delegated to it by the Filer, a Sub-Advisor may, from time to time, determine that the most efficient method by which to manage the assets of a Top Fund is to invest some or all of them in securities of an Underlying Fund.
32. The Top Funds allow investors to obtain exposure to the investment portfolios of the Underlying Funds and their respective investment strategies through direct investments by the Top Funds in securities of the Underlying Funds (the Fund-on-Fund Structure).
33. There are three different Fund-on-Fund Structures that may be used by the Filer to invest the assets of a Top Fund:
(a) Certain Top Funds will invest in only one Underlying Fund managed by a third party investment fund manager. This Fund-on-Fund Structure will be used where the Filer determines that the investment objective of a Top Fund is best achieved by investing in one Underlying Fund. Such Underlying Fund may be changed to another Underlying Fund from time to time depending on whether the Filer concludes that a different Underlying Fund would better achieve the investment objective of the Top Fund. The amounts invested from time to time in such Underlying Fund by a Top Fund may exceed 20% of the outstanding voting securities of the Underlying Fund.
(b) Certain Top Funds will invest in more than one Underlying Fund, each of which is managed by a third party investment fund manager. This Fund-on-Fund Structure will be used where the Filer determines that the investment objective of the Top Fund is best achieved through exposure to different investment styles and broader diversification provided by investing in multiple Underlying Funds. One or more of such Underlying Funds may be changed to other Underlying Funds from time to time depending on whether the Filer concludes that different Underlying Funds would better achieve the investment objective of the Top Fund. The amounts invested from time to time in any Underlying Fund by one or more Top Funds may exceed 20% of the outstanding voting securities of the Underlying Fund.
(c) Certain Top Funds function as "clone funds", as such term is defined in NI 81-102, and will invest in one AHIC Underlying Fund. Under these Fund-on-Fund Structures, the AHIC Underlying Fund may (1) delegate its portfolio management responsibilities to one or more third party sub-advisors, (2) invest in one or more Bottom Funds, or (3) delegate its portfolio management responsibilities in respect of a portion of the AHIC Underlying Fund to one or more third party sub-advisors and invest the remaining portion of the AHIC Underlying Fund in one or more Bottom Funds. A Bottom Fund will not invest in securities of other investment funds. These Fund-on-Fund Structures allow a Top Fund to gain exposure to the investment expertise of third party sub-advisors and/or managers of the Bottom Funds where the Top Fund may not otherwise be able to obtain direct exposure to these investments. The amounts invested from time to time in an AHIC Underlying Fund by a Top Fund may exceed 20% of the outstanding voting securities of the AHIC Underlying Fund.
34. The purpose of a Fund-on-Fund Structure is to provide an efficient and cost-effective manner of pursuing portfolio diversification on behalf of the Top Funds rather than through the direct purchase of securities. Managing a single pool of assets provides economies of scale and allows the Filer or a Sub-Advisor, as applicable, to meet the investment objective of each Top Fund in the most efficient manner.
35. The Fund-on-Fund Structures seek to provide access to managers the Filer views as best-in-class at superior pricing than the pricing a client would obtain on its own or, in the case of the clone funds, the pricing the Top Fund would obtain on its own.
36. An investment by a Top Fund in an Underlying Fund provides greater diversification for a Top Fund in particular asset classes on a more cost efficient basis than a Top Fund would be able to achieve on its own.
37. An investment by a Top Fund in an Underlying Fund is, or will be, compatible with the investment objectives of the Top Fund. Any investment made by a Top Fund in an Underlying Fund will be aligned with the investment objectives, investment strategy, risk profile and other principal terms of the Top Fund.
38. In the Fund-on-Fund Structure described in paragraph 33(c), each of such Top Funds will be a "clone fund" (as defined in NI 81-102) of its respective AHIC Underlying Fund. Where a Top Fund is a "clone fund":
(a) the name of such Top Fund will include part of the name of its corresponding Underlying Fund;
(b) the investment objectives of such Top Fund will name the particular Underlying Fund whose performance the Top Fund seeks to track and fact that the Top Fund seeks to achieve a return similar to the return of such Underlying Fund; and
(c) the offering memorandum of such Top Fund will disclose:
(i) in the investment objectives of such Top Fund, the name of the particular Underlying Fund whose performance the Top Fund seeks to track and fact that the Top Fund seeks to achieve a return similar to the return of such Underlying Fund; and
(ii) in the description of the investment strategies of such Top Fund, the investment strategies of the applicable Underlying Fund whose performance the Top Fund seeks to track.
39. Each Fund-on-Fund Structure will be arranged to avoid the duplication of management fees and incentive fees between the Top Funds and each Underlying Fund and Bottom Fund (if applicable).
(a) Where a Top Fund invests in one or more Underlying Funds managed by a third party manager, the Underlying Fund(s) will pay a management fee (and may pay an incentive fee) to its manager for services related to selecting the investments for the Underlying Fund and administering the Underlying Fund. As a result, investors in the Top Fund indirectly will pay the management (and incentive) fee of the third party manager. This fee is for portfolio management and administrative services related to the Underlying Fund and its investments. It is not duplicative of the fee that investors are paying to the Filer for determining the overall asset allocation of the client's portfolio.
(b) Where a Top Fund invests in an AHIC Underlying Fund that is sub-advised (in whole or in part) by a third party sub-advisor, neither the Top Fund nor the AHIC Underlying Fund will pay a fee to AHIC for its services related to determining the asset allocation of the AHIC Underlying Fund, identifying the third party sub-advisor(s) for the Underlying Fund and administering the AHIC Underlying Fund. Each AHIC Underlying Fund will pay a sub-advisory fee to each third party sub-advisor for portfolio management services related to selecting the investments for its portion of the AHIC Underlying Fund, and therefore investors in the Top Fund will pay each third party sub-advisory fee indirectly. The fees paid to the third party sub-advisors for portfolio management services are not duplicative of the fee that investors are paying to the Filer for determining the overall asset allocation of the client's portfolio.
(c) Where a Top Fund invests in an AHIC Underlying Fund that invests in one or more Bottom Funds, neither the Top Fund nor the AHIC Underlying Fund will pay a fee to AHIC for its services related to determining the asset allocation of the AHIC Underlying Fund, identifying the third party manager(s) for the AHIC Underlying Fund and administering the AHIC Underlying Fund. Each Bottom Fund will pay a management fee (and may pay an incentive fee) to its manager for the selection of individual portfolio assets. Therefore investors in the Top Funds indirectly will pay the management (and incentive) fee of the third party manager. The fees paid to each third party manager for portfolio management services in respect of a Bottom Fund are not duplicative of the fee that investors are paying to the Filer for determining the overall asset allocation of the client's portfolio.
40. There will be no sales fees or redemption fees payable by a Top Fund in respect of an acquisition, disposition or redemption of securities of a third party managed Underlying Fund by the Top Fund that, to a reasonable person, would duplicate a fee payable by an investor in the Top Fund. There are no sales or redemption fees payable by a Top Fund in relation to its purchases or redemptions of the securities of an AHIC Underlying Fund, other than the transaction fees charged by Bottom Funds to an AHIC Underlying Fund that are passed on to the Top Fund to be flowed to the relevant Top Fund investor, as described in paragraphs 42 and 43 below.
41. There will be no sales fees or redemption fees payable by an Underlying Fund in respect of an acquisition, disposition or redemption of securities of a Bottom Fund by the Underlying Fund that, to a reasonable person, would duplicate a fee payable by an investor in the Underlying Fund.
42. The Underlying Funds and Bottom Funds, in each case managed by third party managers that are not affiliated with the Filer, may charge a short term trading fee (a Short Term Trading Fee) or early redemption deduction (an Early Redemption Deduction) to a Top Fund or Underlying Fund if the Top Fund or Underlying Fund engages in short term trading for the purposes of investing subscription monies or funding redemptions at the Top Fund level or if a Top Fund or an Underlying Fund redeems its investment in the Underlying Funds or Bottom Funds before the end of any "lock up" period.
43. To the extent that a Top Fund or Underlying Fund is required to pay a fee or expense to an Underlying Fund or Bottom Fund, in each case managed by a third party manager not affiliated with the Filer, as a result of an investor in that Top Fund making a large purchase or redemption of the Top Fund (a Large Transaction Cost) or engaging in short term trading in the Top Fund, which in turn causes the Top Fund or Underlying Fund to make a large purchase or redemption of the Underlying Fund or Bottom Fund or engage in short term trading in the Underlying Fund or Bottom Fund, any such fee or expense will be passed on by the Top Fund to the relevant investor.
44. In no event will any Large Transaction Cost, Short Term Trading Fee or Early Redemption Deduction charged by an Underlying Fund or Bottom Fund be paid to the Filer or its affiliates.
45. Where a Top Fund invests in an Underlying Fund managed by an affiliate of the Filer, the Filer will not cause the Top Fund to vote the securities of such Underlying Fund at any meeting of the securityholders of the Underlying Fund. Instead, the Filer may arrange for the securities of such Underlying Fund to be voted by the beneficial holders of securities of the Top Fund.
46. Each Top Fund will not accept subscriptions and redemptions on a valuation date where the current value of one or more Underlying Funds alone or collectively representing more than 10% of the NAV of the Top Fund cannot be obtained by the Top Fund. If a Top Fund is a clone of an Underlying Fund, the Top Fund will only accept subscriptions and redemptions on a valuation date where the Underlying Fund is both able to value the Bottom Funds and accept a redemption request.
47. Where an AHIC Underlying Fund invests in one Bottom Fund, the frequency of valuation of the AHIC Underlying Fund will mirror the frequency of valuation of the Bottom Fund. Where an AHIC Underlying Fund invests in more than one Bottom Fund, the frequency of the valuation of the AHIC Underlying Fund will mirror the frequency of the valuation of the Bottom Fund that is valued the least frequently so that, except in limited circumstances, the value of each Bottom Fund will be available on the valuation date of the AHIC Underlying Fund.
48. AHIC will not adjust the NAV of the Bottom Funds in which an AHIC Underlying Fund invests. In rare unforeseen instances where the NAV of a Bottom Fund is not available, AHIC's custodian will fair value the Bottom Funds in accordance with AHIC's fair valuation policy.
49. Each Top Fund that invests substantially all of its assets in Underlying Fund(s) will not be available for redemption on a valuation date where Underlying Fund(s) representing more than 10% of the NAV of the Top Fund are not available for redemption. In all cases, the Filer manages the liquidity of the Top Funds having regard to the redemption features of the Underlying Fund(s) to ensure that it can meet redemption requests from investors of the Top Funds.
Generally
50. Prior to purchasing securities of a Top Fund, each investor will be provided with disclosure about any relationships and potential conflicts of interest between a Top Fund and the Underlying Funds.
51. Any offering memorandum of a Top Fund will describe the Top Fund's intent, or ability, to invest some or even substantially all of its assets in securities of the Underlying Funds and that the AHIC Underlying Funds are also managed and advised by an affiliate of the Filer.
52. Securityholders of each Top Fund will receive, on written request, a copy of any offering memorandum of an Underlying Fund, or other similar document, if available, and the annual and interim financial statements of any Underlying Fund in which the Top Fund invests, if available.
53. Each of the Top Funds and any Underlying Fund that is subject to National Instrument 81-106 Investment Funds Continuous Disclosure (NI 81-106) will prepare annual audited financial statements and interim unaudited financial statements in accordance with NI 81-106 and will otherwise comply with the requirements of NI 81-106, as applicable.
54. Securityholders of each Top Fund will receive, on written request, a copy of such Top Fund's audited annual financial statements and interim unaudited financial statements. The financial statements of each Top Fund will disclose its holdings of securities of the applicable Underlying Fund(s).
55. Each Underlying Fund may have other investors in addition to the Top Fund. The Underlying Funds and Bottom Funds are available for investment by investors that do not have a relationship with the Filer or its affiliates.
56. As the Initial Underlying Funds are newly established funds, each Initial Top Fund may be the initial investor in its corresponding Initial Underlying Fund and thus each Initial Top Fund may own more than 20% of the outstanding voting securities of its corresponding Initial Underlying Fund. An Initial Top Fund's interest in the Initial Underlying Fund is expected to be diluted when other investors invest in the Initial Underlying Fund.
57. In the future, the amounts invested from time to time in an Underlying Fund by one or more Top Funds may exceed 20% of the outstanding voting securities of the Underlying Fund.
58. As a result, each Top Fund could, either alone or together with other Top Funds, become a substantial securityholder of an Underlying Fund. The Top Funds are, or will be, related mutual funds by virtue of the common management by the Filer or its affiliate.
59. In the absence of the Requested Relief, each Top Fund would be precluded from purchasing and holding securities of an Underlying Fund due to the investment restrictions contained in the Legislation.
60. The Fund-on-Fund Structure represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of each Top Fund.
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 Requested Relief is granted provided that:
(a) securities of the Top Funds are distributed in Canada solely pursuant to exemptions from the prospectus requirements in NI 45-106 or the Legislation;
(b) the investment by a Top Fund in an Underlying Fund is compatible with the investment objectives of the Top Fund;
(c) at the time of the purchase of securities of an Underlying Fund by a Top Fund, the Underlying Fund holds no more than 10% of its NAV in securities of other investment funds, unless:
(i) the Underlying Fund is a "clone fund" (as defined by NI 81-102) or the Top Fund is a "clone fund" of that Underlying Fund,
(ii) the Underlying Fund purchases or holds securities of a "money market fund" (as defined by NI 81-102), or
(iii) the Underlying Fund purchases or holds securities that are "index participation units" (as defined by NI 81-102) issued by an investment fund;
(d) no management fees or incentive fees are payable by a Top Fund that, to a reasonable person, would duplicate a fee payable by an Underlying Fund and, if applicable, a Bottom Fund for the same service;
(e) no sales or redemption fees are payable by a Top Fund in relation to its purchases or redemptions of securities of an Underlying Fund or by an Underlying Fund in relation to its purchases or redemptions of securities of a Bottom Fund, except that a fee or deduction may be payable or incurred by a Top Fund provided the subscription or redemption relates to a corresponding subscription or redemption at the Top Fund level and the fee or deduction is flowed through to the subscribing or redeeming securityholder(s) of the Top Fund only;
(f) no fees or deductions are payable by investors in a Top Fund in relation to such investor's purchase or redemption of securities of such Top Fund that would duplicate a fee payable by the Top Fund in connection with its subscription or redemption of securities of an Underlying Fund;
(g) no fees or deductions are payable by a Top Fund in relation to its investments in an Underlying Fund that would duplicate a fee payable by the Underlying Fund in connection with its subscription or redemption of securities of a Bottom Fund;
(h) the Filer will not cause the securities of an Underlying Fund managed by an affiliate of the Filer and held by a Top Fund to be voted at any meeting of the securityholders of the Underlying Fund except that the Filer may arrange for the securities of such Underlying Fund to be voted by the beneficial holders of securities of the Top Fund; and
(i) the offering memorandum, where available, or other disclosure document of a Top Fund will be provided to investors in a Top Fund prior to the time of investment and will disclose:
(i) that the Top Fund may purchase securities of an Underlying Fund and, if applicable, that an Underlying Fund may purchase securities of one or more Bottom Funds;
(ii) that the Filer or an affiliate of the Filer is the investment fund manager and/or portfolio manager of the Top Funds and, if an affiliate of the Filer is the investment fund manager and/or portfolio manager of an Underlying Fund, the potential conflicts of interest relating to such relationship;
(iii) the approximate or maximum percentage of NAV of the Top Fund that is intended to be invested in securities of the Underlying Funds and, if applicable, the approximate or maximum percentage of NAV of the Underlying Funds that is intended to be invested in securities of one or more Bottom Funds;
(iv) the expenses and the maximum management fee payable by any Underlying Fund in which the Top Fund invests, including any incentive fees and, if applicable, the expenses and the maximum management fee payable by any Bottom Fund in which any Underlying Fund invests, including any incentive fees;
(v) that investors in each Top Fund are entitled to receive, on written request and free of charge, a copy of the offering memorandum or other similar disclosure document of the Underlying Funds and, if applicable, the Bottom Funds in which the Underlying Funds invest (if available) and the annual and semi-annual financial statements of the Underlying Funds in which the Top Fund invests its assets and, if applicable, the Bottom Funds in which the Underlying Fund invests its assets, if available.
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"Janet Leiper"
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"Tim Moseley"
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Commissioner
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Commissioner
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Ontario Securities Commission
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Ontario Securities Commission
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SCHEDULE "A"
INITIAL TOP FUNDS AND INITIAL UNDERLYING FUNDS
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Initial Top Funds
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Initial Underlying Funds
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Aon Hewitt U.S. Equity Fund
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U.S. Equity Fund, a series of the Aon Hewitt Institutional Fund, LLC
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Aon Hewitt Global Equity Fund
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Global Equity Fund, a series of the Aon Hewitt Institutional Fund, LLC
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Aon Hewitt International Equity Fund
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Non-U.S. Equity Fund, a series of the Aon Hewitt Institutional Fund, LLC
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Aon Hewitt Long Corporate Bond Fund
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TD Emerald Canadian Long Corporate Bond Pooled Fund Trust
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Aon Hewitt Target Short Duration Fund
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TD Emerald Short Liability Driven Provincial Bond Pooled Fund Trust
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Aon Hewitt Target Mid Duration Fund
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TD Emerald Mid Liability Driven Provincial Bond Pooled Fund Trust
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Aon Hewitt Target Long Duration Fund
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TD Emerald Long Liability Driven Provincial Bond Pooled Fund Trust
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