National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Relief granted to exchange-traded mutual funds for extensions of the lapse date of their prospectus – Filer will incorporate offering of the ETFs under the same offering documents as related family of funds when they are renewed – Extension of lapse date will not affect the currency or accuracy of the information contained in the current prospectus.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 62(5).
January 28, 2019
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
MACKENZIE FINANCIAL CORPORATION
MACKENZIE CANADIAN SHORT TERM FIXED INCOME ETF,
MACKENZIE CORE PLUS CANADIAN FIXED INCOME ETF,
MACKENZIE CORE PLUS GLOBAL FIXED INCOME ETF,
MACKENZIE FLOATING RATE INCOME ETF,
MACKENZIE GLOBAL HIGH YIELD FIXED INCOME ETF,
MACKENZIE UNCONSTRAINED BOND ETF,
MACKENZIE GLOBAL LEADERSHIP IMPACT ETF,
MACKENZIE IVY GLOBAL EQUITY ETF AND
MACKENZIE PORTFOLIO COMPLETION ETF
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 prospectus of the Funds dated April 3, 2018 (the Prospectus) be extended to those time limits that would apply if the lapse date of the Prospectus was June 20, 2019 (the Exemption Sought).
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 section 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 Canadian 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 existing under the laws of the Province of Ontario. The Filer's head office is located in Toronto, Ontario.
2. The Filer is registered as an investment fund manager, portfolio manager, exempt market dealer and commodity trading manager in Ontario. The Filer is also registered as a portfolio manager and exempt market dealer in the Canadian Jurisdictions and as an investment fund manager in Newfoundland and Labrador and Québec.
3. The Filer is the trustee and investment fund manager of the Funds.
4. Each of the Funds is an exchange-traded mutual fund (an ETF) established under the laws of Ontario, and is a reporting issuer as defined in the securities legislation of each of the Canadian Jurisdictions.
5. Neither the Filer nor any of the Funds are in default of securities legislation in any of the Canadian Jurisdictions.
6. The Funds currently distribute securities in the Canadian Jurisdictions under the Prospectus.
7. Pursuant to subsection 62(1) of the Securities Act (Ontario) (the Act), the lapse date of the Prospectus is April 3, 2019 (the Lapse Date). Accordingly, under subsection 62(2) of the Act, the distribution of securities of each of the Funds would have to cease on the Lapse Date unless: (i) the Funds file a pro forma prospectus at least 30 days prior to the Lapse Date; (ii) the final prospectus is filed no later than 10 days after the Current Lapse Date; and (iii) a receipt for the final prospectus is obtained within 20 days of the Lapse Date.
8. The Filer is the investment fund manager of 19 other ETFs as listed in Schedule “A” (the Other Funds) that currently distribute their securities under a prospectus with a lapse date of June 20, 2019 (the Other Funds Prospectus).
9. The Filer wishes to combine the Prospectus with the Other Funds Prospectus into a prospectus dated on or about June 20, 2019 in order to reduce renewal, printing and related costs. Offering the Funds and the Other Funds under one prospectus would facilitate the distribution of the Funds in the Canadian Jurisdictions under the same prospectus and enable the Filer to streamline disclosure across the Filer's fund platform. As the Funds and the Other Funds are managed by the Filer, offering them under the same prospectus would allow investors to more easily compare their features.
10. It would be unreasonable to incur the costs and expenses associated with preparing two separate renewal prospectuses given how close in proximity the Lapse Date is with the lapse date of the Other Funds Prospectus.
11. Except as otherwise disclosed within Amendment No. 1 to the Prospectus dated October 10, 2018 (Amendment No. 1), there have been no material changes in the affairs of the Funds since the date of the Prospectus. Amendment No. 1 was accompanied with the following amended ETF facts document filings: (i) for Mackenzie Unconstrained Bond ETF, Mackenzie Floating Rate Income ETF, Mackenzie Core Plus Canadian Fixed Income ETF, Mackenzie Global High Yield Fixed Income ETF, Mackenzie Global Leadership Impact ETF, Mackenzie Portfolio Completion ETF, Mackenzie Ivy Global Equity ETF and Mackenzie Canadian Short Term Fixed Income ETF, to announce a reduction in management fees, effective October 10, 2018; and (ii) for Mackenzie Unconstrained Bond ETF to reflect a change in its risk rating from “Low to Medium” to “Low” (together, the Amended ETF Facts). Accordingly, the Prospectus, Amendment No. 1, the Amended ETF Facts and the current ETF facts document of Mackenzie Core Plus Global Fixed Income ETF, represent the current information of the Funds.
12. Given the disclosure obligations of the Funds, should a material change in the affairs of any of the Funds occur, the Prospectus and the current ETF facts document(s) of the applicable Fund(s) will be amended as required under the Legislation.
13. New investors in the Funds will receive delivery of the most recently filed ETF facts document(s) of the applicable Fund(s). The Prospectus and Amendment No. 1 will still be available upon request.
14. The Exemption Sought will not affect the accuracy of the information contained in the Prospectus and therefore will 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 Exemption Sought is granted.
Investment Funds and Structured Products
Ontario Securities Commission
THE OTHER FUNDS
Mackenzie Maximum Diversification Canada Index ETF
Mackenzie Maximum Diversification US Index ETF
Mackenzie Maximum Diversification Developed Europe Index ETF
Mackenzie Maximum Diversification All World Developed Index ETF
Mackenzie Maximum Diversification Emerging Markets Index ETF
Mackenzie Maximum Diversification All World Developed ex North America Index ETF
Mackenzie China A-Shares CSI 300 Index ETF
Mackenzie Canadian Large Cap Equity Index ETF
Mackenzie Canadian Equity Index ETF
Mackenzie US Large Cap Equity Index ETF
Mackenzie US Large Cap Equity Index ETF (CAD-Hedged)
Mackenzie International Equity Index ETF
Mackenzie International Equity Index ETF (CAD-Hedged)
Mackenzie Canadian Aggregate Bond Index ETF
Mackenzie Canadian Short-Term Bond Index ETF
Mackenzie Canadian All Corporate Bond Index ETF
Mackenzie US TIPS Index ETF (CAD-Hedged)
Mackenzie US Investment Grade Corporate Bond Index ETF (CAD-Hedged)
Mackenzie US High Yield Bond Index ETF (CAD-Hedged)