The Securities Commission has granted an exemption to Horizons ETFs Management (Canada) Inc. and its associated exchange-traded funds (ETFs) from certain requirements of National Instrument 62-104 Take-Over Bids and Issuer Bids (NI 62-104). This exemption allows corporate class ETFs within the same mutual fund corporation to acquire shares from each other through a public marketplace, such as the Toronto Stock Exchange (TSX), without triggering formal issuer bid requirements.
The decision is based on the understanding that such transactions will be conducted in accordance with the fund-of-fund rules outlined in National Instrument 81-102 Investment Funds (NI 81-102) and National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107). These rules permit one investment fund to invest in another managed by the same investment fund manager, subject to certain conditions.
The exemption is subject to the following conditions:
1. Acquisitions must comply with the fund-of-fund rules.
2. Transactions must occur in the secondary market at prevailing market prices.
3. Acquired shares will not be cancelled and will remain outstanding securities of the mutual fund corporation.
This decision allows for more cost-effective and operationally efficient management of the ETFs, benefiting the securityholders. The Ontario Securities Commission, as the principal regulator, has determined that the exemption meets the necessary legislative criteria.