The Ontario Securities Commission granted an exemption to BlackRock Asset Management Canada Limited and its managed funds, including the iShares Gold Bullion ETF and the iShares Silver Bullion ETF, from the requirement that all portfolio assets of an investment fund be held by a single custodian. This exemption, under subsection 6.1(1) of National Instrument 81-102 Investment Funds (NI 81-102), allows each fund to appoint multiple custodians, provided they qualify under section 6.2 of NI 81-102 and comply with all other custodial requirements.
The exemption was sought due to operational challenges and the need for specialized custody services for bullion assets. BlackRock intends to appoint State Street Trust Company Canada for non-bullion assets and CIBC Mellon Trust Company as bullion custodian, with the Royal Canadian Mint and potentially International Depository Services of Canada as sub-custodians.
The decision was conditioned on the funds having a single entity to reconcile all portfolio assets and provide valuation services, maintaining operational systems for proper asset reconciliation among custodians, and each additional custodian acting only for the assets transferred to it.
This exemption aims to enhance operational efficiency and access to experienced custodians without compromising the safety of the funds’ assets. The details of the custodial arrangements will be disclosed in the funds’ prospectus at the next annual renewal.