Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted to pooled funds not subject to National Instrument 81-102 Investment Funds(NI 81-102) and to mutual funds subject to NI 81-102, to purchase securities of related entities over a stock exchange and to purchase non-exchange traded debt securities of related entities under primary offerings and in the secondary market -- Relief also granted to portfolio manager to permit pooled funds not subject to NI 81-102 to engage in purchases of underlying funds under common management, subject to conditions.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 13.5(2)(a), 13.5(2)(b), 15.1.

TRANSLATION

DECISION: 2018-SACD-1020073

July 11, 2018

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the "Jurisdictions") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF DESJARDINS GLOBAL ASSET MANAGEMENT INC. (the "Filer") AND THE DESJARDINS FUNDS (as defined below)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (each a "Decision Maker") has received an application from the Filer on behalf of the Desjardins Funds (as defined below) for a decision under the securities legislation of the Jurisdictions (the "Legislation"), pursuant to section 15.1 of Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations ("Regulation 31-103") exempting the Filer, or an affiliate of the Filer, as the registered adviser of a Desjardins Fund (as defined below), from the restriction contained in section 13.5(2)(a) of Regulation 31-103 prohibiting a registered adviser from knowingly causing an investment portfolio managed by it, including an investment fund for which it acts as an adviser, such as the Desjardins Funds (as defined below), from making an investment in any issuer in which a responsible person (as such term is defined in Regulation 31-103) or an associate of a responsible person (as such term is defined in Regulation 31-103) is a partner, officer or director unless this fact is disclosed to the client and the written consent of the client is obtained before the investment is made in order to allow the following transactions:

• purchases by the Pooled Funds (as defined below) of exchange-traded securities of Regulation 31-103 Related Issuers in the secondary market;

• purchases by the Pooled Funds (as defined below) of securities of the Underlying Funds (as defined below); and

• purchases by the Desjardins Funds (as defined below) of NET Debt Securities (as defined below) in Primary Offerings (as defined below) and in the secondary market.

(collectively, the "Exemption Sought").

Under the process of Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application,

(b) the Filer has provided notice that section 4.7(1) of Regulation 11-102 respecting passport System ("Regulation 11-102") is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Nunavut and Northwest Territories, and

(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in Regulation 14-101 respecting Definitions, Regulation 11-102, Regulation 81-102 respecting Investment Funds (Regulation 81-102) and Regulation 81-107 respecting Independent Review Committee for Investment Funds ("Regulation 81-107") have the same meaning if used in this decision, unless otherwise defined. Capitalized terms used in this decision have the following meanings:

"Desjardins Funds" means, collectively, the Regulation 81-102 Funds and the Pooled Funds;

"IRC" means the independent review committee established in accordance with Regulation 81-107;

"NET Debt Securities" means non exchanged-traded debt securities of Regulation 31-103 Related Issuers;

"Pooled Funds" means all existing mutual funds to which neither Regulation 81-102 nor Regulation 81-107 applies and any mutual fund to which neither Regulation 81-102 nor Regulation 81-107 applies subsequently established in the future for which the Filer or an affiliate of the Filer acts, or will act, as investment fund manager and/or portfolio manager;

"Primary Offering" means a primary distribution or treasury offering of NET Debt Securities;

"Regulation 31-103 Related Issuer" means an issuer in which a responsible person (as defined in section 13.5(1) of Regulation 31-103) or an associate of a responsible person (as defined in section 13.5(1) of Regulation 31-103) of the Filer is a partner, officer or director;

"Regulation 81-102 Funds" means all existing investment funds, including mutual funds and exchange traded funds, subject to both Regulation 81-102 and Regulation 81-107 and any investment fund, including mutual funds and exchange traded funds, subject to both Regulation 81-102 and Regulation 81-107 subsequently established in the future for which the Filer or an affiliate of the Filer acts, or will act, as investment fund manager and/or portfolio manager; and

"Underlying Funds" means related Pooled Funds and related Regulation 81-102 Funds in which a Pooled Fund may want to invest.

Representations

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

The Filer

1. The Filer is a corporation incorporated under the Business Corporation Act (Québec).

2. The Filer's head office is located at 1 Complexe Desjardins, 20th Floor, South Tower, Montréal, Québec, Canada, H5B 1B3.

3. The Filer is registered as a portfolio manager in all of the provinces and territories of Canada and as an exempt market dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Nova Scotia. The Filer is also registered as an investment fund manager in Alberta, Manitoba, Ontario, Québec, Nova Scotia and Newfoundland and Labrador. In addition, the Filer is registered as an adviser in Manitoba, commodity trading manager in Ontario and as derivatives portfolio manager in Québec.

4. The Filer is not in default of securities legislation in any jurisdiction of Canada.

FCDQ

5. Fédération des Caisses Desjardins du Québec ("FCDQ") is a financial services cooperative established under the Act respecting financial services cooperatives (Québec).

6. FCDQ, or an affiliate of FCDQ, including, notably, Capital Desjardins Inc. ("CDI") issued or may issue listed and non-listed debt securities as well as rated and non-rated debt securities.

7. The Filer intends to obtain the approval of the IRC of each Regulation 81-102 Fund in order to, amongst other things, invest in listed securities of FCDQ, the whole in accordance with Regulation 81-107.

8. FCDQ is not in default of securities legislation in any jurisdiction of Canada.

The Desjardins Funds

9. Each of the Desjardins Funds is or will be a mutual fund established under the laws of Québec.

10. The Filer or an affiliate of the Filer currently acts as investment fund manager and/or portfolio manager of the existing Desjardins Funds.

11. The Filer or an affiliate of the Filer will act as the investment fund manager and/or portfolio manager of each future Desjardins Fund.

12. Each existing Regulation 81-102 Fund is, and each future Regulation 81-102 Fund will be, a reporting issuer under the securities legislation of one or more jurisdiction of Canada whose securities are, or will be, qualified for distribution in accordance with applicable securities legislation.

13. The securities of each of the Pooled Funds are, or will be distributed on an exempt basis pursuant to available exemptions from the prospectus requirement in one or more of the jurisdictions of Canada. None of the Pooled Funds are or will be a reporting issuer in any jurisdiction of Canada.

14. A Desjardins Fund's reliance on the Exemption Sought will be compatible with its investment objective and strategies.

15. None of the Desjardins Funds are in default of securities legislation in any jurisdiction of Canada.

Common Officers and Directors

16. The following persons may also be directors or officers of a Regulation 31-103 Related Issuer of the Filer or an Underlying Fund :

(a) A partner, director or officer of the Filer; and/or

(b) an employee or agent of the Filer or an affiliate of the Filer or a partner, director, officer, employee or agent of an affiliate of the Filer having access to or participating in formulating (i) an investment decision made on behalf of a client of the Filer, or (ii) an advice to be given to a client of the Filer.

17. Desjardins Investment Inc. ("DII"), who currently acts as investment fund manager for certain of the Desjardins Funds, and the Filer, are members of a group of entities which fall under the FCDQ umbrella and are wholly-owned subsidiaries of FCDQ.

IRC and Related Exemptive Reliefs

18. Each of the Regulation 81-102 Funds has an IRC appointed in a manner consistent with the requirements of Regulation 81-107.

19. Although the Pooled Funds are not, or will not be, subject to Regulation 81-107, each of the Pooled Funds will have an IRC appointed in a manner consistent with the requirements of Regulation 81-107, the mandate of which shall be limited to questions relating to the purchase of NET Debt Securities and the purchase of exchange-traded securities of Regulation 31-103 Related Issuers by the Pooled Funds. The IRC of a Pooled Fund has been, or will be, composed in accordance with section 3.7 of Regulation 81-107 and will comply with the standard of care set out in section 3.9 of Regulation 81-107. The IRC of a Pooled Fund will not approve a purchase of NET Debt Securities or a purchase of exchange-traded securities of Regulation 31-103 Related Issuers subject to its mandate unless the IRC has been made the determination set out in subsection 5.2(2) of Regulation 81-107.

20. If the IRC of a Pooled Fund becomes aware of an instance where the Filer or an affiliate of the Filer, as manager of the Pooled Fund, did not comply with the terms of this decision or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the jurisdiction under which the Pooled Fund is organized.

21. As of November 21, 2017, the Decision Makers granted a relief from section 4.1(2) of Regulation 81-102 authorizing the Filer when acting on behalf of all investment funds, including mutual funds and exchange traded funds, and any investment funds subject to Regulation 81-102 subsequently established in the future for which the Filer acts, or will act, as investment fund manager to invest in non-exchange-traded debt securities having a designated rating (as such term is defined in Regulation 44-101 respecting Short Form Prospectus Distributions) of an issuer of which a partner, director, officer or employee of the dealer manager of the investment fund, or a partner, director, officer or employee of an affiliate or associate of the dealer manager, is a partner, director or officer, unless the partner, director, officer or employee (i) does not participate in the formulation of investment decisions made on behalf of the dealer managed investment fund; (ii) does not have access before implementation to information concerning investment decisions made on behalf of the dealer managed investment fund; and (iii) does not influence, other than through research, statistical and other reports generally available to clients, the investment decisions made on behalf of the dealer managed investment fund, in a primary distribution or treasury offering and in the secondary market (the "DGAM Subsection 4.1(2) Regulation 81-102 Relief").

22. As of May 29, 2018, the Decision Makers granted a relief from section 4.1(2) of Regulation 81-102 authorizing DII when acting on behalf of all existing mutual funds (for which the Filer currently acts as portfolio manager) subject to Regulation 81-102 for which it acts as investment fund manager and any mutual fund subject to Regulation 81-102, subsequently established in the future for which DII will act as investment fund manager to permit the such funds to invest in non-exchange-traded debt securities having a designated rating (as such term is defined in Regulation-81-102) of an issuer of which a partner, director, officer or employee of the dealer manager of the investment fund, or a partner, director, officer or employee of an affiliate or associate of the dealer manager, is a partner, director or officer, unless the partner, director, officer or employee (i) does not participate in the formulation of investment decisions made on behalf of the dealer managed investment fund; (ii) does not have access before implementation to information concerning investment decisions made on behalf of the dealer managed investment fund; and (iii) does not influence, other than through research, statistical and other reports generally available to clients, the investment decisions made on behalf of the dealer managed investment fund, in a primary distribution or treasury offering and in the secondary market (the "DII Subsection 4.1(2) Regulation 81-102 Relief". And collectively with the DGAM Subsection 4.1(2) Regulation 81-102 Relief, the "Section 4.1(2) Regulation 81-102 Decisions").

23. The Filer and DII follow and/or will follow, as applicable, the conditions and procedures contained in the Section 4.1(2) Regulation 81-102 Decisions when they enter into the above transactions on behalf of the applicable funds.

Regulatory Restriction to Invest in Securities of Regulation 31-103 Related Issuers

24. According to section 13.5(2)(a) of Regulation 31-103, a registered adviser must not cause an investment portfolio managed by it, including an investment fund for which it acts as adviser to purchase a security of a Regulation 31-103 Related Issuer unless this fact is disclosed to its client and the written consent of the client is obtained before the purchase (the "Section 13.5(2)(a) Regulation 31-103 Restriction"). Policy Statement to Regulation 31-103 provides that when the client is an investment fund, the disclosure should be provided to, and the consent obtained from, each security holder of the investment fund in order to be meaningful.

25. Section 6.2 of Regulation 81-107 provides the Regulation 81-102 Funds with an exemption from the Section 13.5(2)(a) Regulation 31-103 Restriction in respect of purchasing exchange-traded securities, such as common shares, in the secondary market if, among other, the Regulation 81-102 Fund's IRC has approved the investment under section 5.2(2) of Regulation 81-107. It does not permit the Regulation 81-102 Funds to purchase NET Debt Securities.

26. Section 2.5(7) of Regulation 81-102 provides the Regulation 81-102 Funds with an exemption from the Section 13.5(2)(a) Regulation 31-103 Restriction in respect of investments in other investment funds.

27. Regulation 81-102 and Regulation 81-107 do not apply to the Pooled Funds as they are not reporting issuers.

28. Accordingly, in the absence of the Exemption Sought, the Filer may not cause the Pooled Funds to purchase securities of Regulation 31-103 Related Issuers and/or securities of the Underlying Funds and may not cause the Desjardins Funds to purchase NET Debt Securities, as it is practically impossible to obtain the consent of all security holders of such Desjardins Funds in situation where issuers become Regulation 31-103 Related Issuers after a person has become a security holder of a Desjardins Fund.

Investment in Underlying Funds by the Pooled Funds

29. Investment by the Pooled Funds in the Underlying Funds (the Fund-on-Fund Structure) will be in the best interests of the Pooled Funds and help them achieve their investment objective on a diversified basis and obtain broad exposure to the asset classes each proposes to invest in. Investing directly in the securities held by the Underlying Funds is a less desirable option owing to the increased costs and inefficiencies that are associated with such direct investing. Investment by the Pooled Funds in the Underlying Funds will also increase the asset base of the Underlying Funds, enabling the Underlying Funds to further diversify their portfolios and achieve economies of scale.

30. Each Pooled Fund will manage its investments in an Underlying Fund with discretion to buy and sell securities of the Underlying Fund, selected in accordance with the Pooled Fund's investment objective, as well as to alter its holdings in any Underlying Fund in which it invests.

31. An investment by a Pooled Fund in an Underlying Fund will be effected at net asset value (NAV) per security of the applicable class or series of the applicable Underlying Fund, as calculated in accordance with part 14 of Regulation 81-106 respecting Investment Fund Continuous Disclosure.

32. An Underlying Fund will primarily hold publicly traded securities and will not hold greater than 10% of their assets in "illiquid assets" as defined in Regulation 81-102.

33. The portfolio of assets of a Pooled Fund that invests in an Underlying Fund, and the portfolio assets of an Underlying Fund, will be held by a qualified custodian, as defined under, and in accordance with, Regulation 31-103.

34. No Underlying Fund will be a top fund in a Fund-on-Fund Structure.

35. Securities of a Pooled Fund that is a top fund in a Fund-on-Fund Structure, and the corresponding Underlying Funds have, or will have, matching redemption dates and matching valuation dates.

36. In the absence of relief from Section 13.5(2)(a) of Regulation 31-103, the Filer or an affiliate of the Filer acting as portfolio manager of a Pooled Fund would also be prohibited from knowingly causing the Pooled Fund to invest in Underlying Funds that have officers or directors in common with the Filer or an affiliate of the Filer acting as portfolio manager of the Pooled Fund without prior disclosure and consent.

37. Investors in a Pooled Fund will be entitled to receive from the Filer, on request and free of charge, a copy of any offering memorandum or other disclosure document and, once available, the annual and semi-annual financial statements, for all Underlying Funds in which the Pooled Fund may invest its assets.

38. Investors in a Pooled Fund will also be provided with annual financial statements of the Pooled Fund in accordance with securities legislation, including an auditor's report.

39. As the Pooled Funds are not subject to Regulation 81-102, the exemption from Section 13.5(2)(a) Regulation 31-103 Restriction under Section 2.5(7) of Regulation 81-102 is not available to them.

Investments in NET Debt Securities by the Desjardins Funds

40. The Filer has determined that it would be in the best interests of the Desjardins Funds to be granted the Exemption Sought.

41. Certain Regulation 31-103 Related Issuers of the Filer are significant issuers of securities and they are issuers of debt instruments. The Filer considers that the Desjardins Funds should have access to securities of the Regulation 31-103 Related Issuers for the following reasons:

(a) there is a limited supply of highly rated corporate debt;

(b) diversification is reduced to the extent that a Desjardins Fund is limited with respect to investment opportunities; and

(c) to the extent that a Desjardins Fund seeks to track or outperform a benchmark, it is important for the Desjardins Fund to be able to purchase any securities included in the benchmark. NET Debt Securities of Regulation 31-103 Related Issuers may be included in such Canadian debt indices.

42. Where the NET Debt Security is purchased by a Desjardins Fund in a Primary Offering pursuant to the Exemption Sought, the NET Debt Security will be:

(a) a non-exchange-traded debt security, other than an asset backed commercial paper security, issued by a Regulation 31-103 Related Issuer, with a term to maturity of 365 days or more, that has been given and continues to have, at the time of purchase, a 'designated rating' by a designated rating organization, as such terms are defined in Regulation 81-102; and

(b) the terms of the Primary Offering, such as the size and the pricing, will be a matter of public record as evidenced in a prospectus, offering memorandum, press release or other public document.

43. Where the NET Debt Security is purchased by a Desjardins Fund in the secondary market pursuant to the Exemption Sought and not in a Primary Offering, the debt security has been given, and continues to have, at the time of purchase, a 'designated rating' by a designated rating organization, as such terms are defined in Regulation 81-102.

Decision

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

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted to permit:

1. a Pooled Fund to purchase exchange-traded securities of Regulation 31-103 Related Issuers in the secondary market provided that:

(a) the investment is made in accordance with or is necessary to meet the Pooled Fund's investment objective;

(b) the Pooled Funds maintain an IRC that is composed in manner consistent with section 3.7 of Regulation 81-107 and conducts itself in a manner that complies with the standard of care set out in section 3.9 of Regulation 81-107 as if Regulation 81-107 applied to the Pooled Fund;

(c) at the time of the purchase, the IRC of the Pooled Fund has approved the transaction in accordance with Section 5.2(2) of Regulation 81-107;

(d) the Filer or its affiliate, as manager of the Pooled Fund, complies with section 5.1 of Regulation 81-107, and the Filer or its affiliate, as manager of the Pooled Fund, and the IRC of the Pooled Funds, will comply with section 5.4 of Regulation 81-107 for any standing instructions the IRC provides in connection with the purchase of securities of a Regulation 31-103 Related Issuer;

(e) the purchase is made on a stock exchange on which such securities are listed and traded;

(f) the transaction complies with any applicable "market integrity requirements" as defined in Regulation 81-107;

(g) on or before the 90th day after the end of each financial year of a Pooled Fund, the Filer files with the applicable securities regulatory authorities or regulator the particulars of any such investments; and

(h) in connection with any instance that the IRC of a Pooled Fund becomes aware that the Pooled Fund has not complied with the conditions of the Exemption Sought, the IRC of the Pooled Fund complies with the reporting obligation in section 4.5 of Regulation 81-107 as if Regulation 81-107 applied to the Pooled Fund;

2. a Pooled Fund to purchase securities of an Underlying Fund provided that:

(a) securities of each of the Pooled Funds are distributed on an exempt basis pursuant to available exemptions from the prospectus requirement in one or more of the jurisdictions of Canada;

(b) an investment by a Pooled Fund in an Underlying Fund is consistent with, or is necessary to meet, the investment objective of the Pooled Fund;

(c) an investment in an Underlying Fund by a Pooled Fund will be effected at a net asset value (NAV) per security of the applicable class or series of the applicable Underlying Fund, calculated in accordance with part 14 of Regulation 81-106.

(d) no Pooled Fund will purchase or hold a security of an Underlying Fund unless, at the time of purchasing securities of the Underlying Fund, the Underlying Fund holds not more than 10% of its NAV in securities of other investment funds unless the Underlying Fund:

(i) is a clone fund (as defined in Regulation 81-102);

(ii) purchases of holds securities of a "money market fund" (as defined in Regulation 81-102); or

(iii) purchases or holds securities that are "index participation units" (as defined in Regulation 81-102) issued by an investment fund;

(e) no management or incentive fees are payable by the Pooled Funds that, to a reasonable person, would duplicate a fee payable by the Underlying Funds for the same service;

(f) no sales or redemption fees are payable by the Pooled Funds in relation to its purchases or redemptions of the securities of the Underlying Funds;

(g) the Filer or its affiliate, as manager of Pooled Fund, does not cause the securities of an Underlying Fund held by a Pooled Fund to be voted at any meeting of the holders of such securities, except that the Filer may arrange for all of the securities that the Pooled Fund holds in an Underlying Funds to be voted by the beneficial owners of units of the Pooled Fund who are not the Filer or an officer, director of the Filer;

(h) when purchasing and/or redeeming securities of an Underlying Fund, the Filer or its affiliate, as manager of Pooled Fund, shall act honestly, in good faith and in the best interests of the applicable Pooled Fund and Underlying Fund, respectively, and shall exercise the care and diligence that a reasonably prudent person would exercise in comparable circumstances;

(i) the offering memorandum, or other disclosure document of a Pooled Fund, if available, will be provided to investors in a Pooled Fund prior to the time of investment, and will disclose:

(i) that a Pooled Fund may purchase securities of the applicable Underlying Fund;

(ii) that the Filer or its affiliate is the investment fund manager and portfolio manager of both the Pooled Fund and the Underlying Fund;

(iii) that the Pooled Fund may invest all, or substantially all, of its assets in securities of an Underlying Fund;

(iv) the fees, expenses and any performance or special incentive distributions payable by the Underlying Fund in which a Pooled Fund invests;

(v) the process or criteria used to select the Underlying Fund, if applicable; and

(vi) that investors are entitled to receive from the Filer, on request and free of charge, a copy of the offering memorandum or other similar disclosure documents of the Underlying Fund, if available, as well as the annual audited financial statements and interim financial reports relating to the Underlying Fund in which the Pooled Fund invests.

3. a Desjardins Fund to purchase NET Debt Securities provided that:

(a) the investment is made in accordance with, or is necessary to meet, the investment objective of the Desjardins Fund;

(b) at the time of the purchase, the IRC of the Desjardins Fund has approved the transaction in accordance with Section 5.2(2) of Regulation 81-107;

(c) the Pooled Funds maintain an IRC that is composed in manner consistent with section 3.7 of Regulation 81-107 and conducts itself in a manner that complies with the standard of care set out in section 3.9 of Regulation 81-107 as if Regulation 81-107 applied to the Pooled Fund;

(d) the Filer or its affiliate, as manager of the Desjardins Fund, complies with section 5.1 of Regulation 81-107 and the investment fund manager and the IRC of the Desjardins Fund comply with section 5.4 of Regulation 81-107 for any standing instructions the IRC provides in connection with the transactions;

(e) the security has been given and continues, at the time of the purchase, to have a 'designated rating' by a 'designated rating organization' within the meaning of those terms in Regulation 81-102;

(f) in the case of NET Debt Securities to be purchased in a Primary Offering:

(i) the size of the Primary Offering is at least $100 million;

(ii) at least two purchasers who are independent, arm's length purchasers, which may include "independent underwriters" within the meaning of Regulation 33-105 respecting Underwriting Conflicts, collectively purchase at least 20% of the Primary Offering;

(iii) no Desjardins Fund shall participate in the Primary Offering if following its purchase the Desjardins Fund together with related Desjardins Funds will hold more than 20% of the securities issued in the Primary Offering;

(iv) no Desjardins Fund shall participate in the Primary Offering if following its purchase the Desjardins Fund would have more than 5% of its net assets invested in NET Debt Securities of a Regulation 31-103 Related Issuer;

(v) the price paid for the securities by a Desjardins Fund in the Primary Offering shall be no higher than the lowest price paid by any of the arm's length purchasers who participate in the Primary Offering;

(g) in the case of NET Debt Securities to be purchased in the secondary market:

(i) the price payable for the security is not more than the ask price of the security;

(ii) the ask price of the security is determined as follows:

(A) if the purchase occurs on a marketplace, the price payable is determined in accordance with the requirements of that marketplace; or

(B) if the purchase does not occur on a marketplace,

(I) the Desjardins Fund may pay the price for the security at which an independent, arm's length seller is willing to sell the security, or

(II) if the Desjardins Fund does not purchase the security from an independent, arm's length seller, the Desjardins Fund must pay the price quoted publicly by an independent marketplace or obtain, immediately before the purchase, at least one quote from an independent, arm's length purchaser or seller and not pay more than that quote;

(iii) the transaction involving the purchase of NET Debt Securities complies with any applicable "market integrity requirements" as defined in Regulation 81-107;

(h) no later than the time a Regulation 81-102 Fund files its annual financial statements, or on or before the 90th day after the end of each financial year of a Pooled Fund, the Filer files with the securities regulatory authority or regulator the particulars of any investments made in reliance on this relief; and

(i) the IRC of the Desjardins Fund complies with section 4.5 of Regulation 81-107 in connection with any instance that it becomes aware that the Filer did not comply with any of the conditions of this decision.

"Frédéric Pérodeau"
Superintendant
Client Services and Distribution Oversight