The Ontario Securities Commission granted Franklin Templeton Investments Corp. (the Filer) exemptions for certain mutual funds (the Funds) from standard prospectus and sales and redemption requirements under National Instrument 41-101 General Prospectus Requirements (NI 41-101) and National Instrument 81-102 Investment Funds (NI 81-102). The exemptions allow the Funds to offer both exchange-traded (ETF Securities) and conventional mutual fund series (Mutual Fund Securities) under a single simplified prospectus, treating each series as if it were a separate fund for compliance purposes.
Key points of the decision include:
1. ETF Prospectus Form Relief: The Funds are exempt from the requirement to prepare a long-form prospectus for ETF Securities, provided they file a simplified prospectus in accordance with NI 81-101 for both ETF Securities and Mutual Fund Securities. Additional disclosure from Form 41-101F2, not covered by Form 81-101F1, must be included in the simplified prospectus.
2. Sales and Redemptions Relief: The Funds are permitted to treat ETF Securities and Mutual Fund Securities as separate entities for compliance with Parts 9, 10, and 14 of NI 81-102. This means that each series must comply with the relevant provisions of NI 81-102 applicable to its type (either exchange-traded or non-exchange-traded mutual funds).
The decision is based on the understanding that this approach will be more efficient and provide clear disclosure to investors. The Filer is in compliance with securities legislation and will ensure that the additional disclosure for ETF Securities does not hinder investors’ understanding of the differences between the two types of securities.
The relief is subject to conditions, including compliance with NI 81-101 for filing simplified prospectuses and the inclusion of specific disclosures about the exemptions in the prospectus. The decision applies to the Funds listed in Schedules A and B, which include various Franklin Templeton mutual funds and ETFs.