Ontario Securities Commission Bulletin
Issue 48/39 - October 02, 2025
Ont. Sec. Bull. Issue 48/39
• Ontario Securities Commission et al.
• Ontario Securities Commission et al.
• Ontario Securities Commission et al. -- ss. 127(1), 127.1
• Ontario Securities Commission and Brian Arthur Kitts -- ss. 127(1), 127(4.0.2)
• Temporary, Permanent & Rescinding Issuer Cease Trading Orders
• Temporary, Permanent & Rescinding Management Cease Trading Orders
• Reeflex Solutions Inc. -- s. 21(b) of Ont. Reg. 398/21 of the OBCA
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Ontario Securities Commission et al. -- ss. 127(1), 127.1
FILE NO.: 2025-16
BETWEEN:
Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5
PROCEEDING TYPE: Public Settlement Hearing
HEARING DATE AND TIME: September 26, 2025, at 10:00 a.m.
LOCATION: By videoconference
The purpose of this hearing is to consider whether it is in the public interest for the Capital Markets Tribunal to approve the Settlement Agreement dated September 23, 2025, between the Commission, Huy Le Huynh and Thi Anh Nguyet Pham in respect of the application filed by the Commission dated September 23, 2025.
Any party to the proceeding may be represented by a representative at the hearing.
IF A PARTY DOES NOT ATTEND, THE HEARING MAY PROCEED IN THE PARTY'S ABSENCE AND THE PARTY WILL NOT BE ENTITLED TO ANY FURTHER NOTICE IN THE PROCEEDING.
This Notice of Hearing is also available in French on request of a party. Participation may be in either French or English. Participants must notify the Tribunal in writing as soon as possible if the participant is requesting a proceeding be conducted wholly or partly in French.
L'avis d'audience est disponible en français sur demande d'une partie, que la participation à l'audience peut se faire en français ou en anglais et que les participants doivent aviser le Tribunal par écrit dès que possible si le participant demande qu'une instance soit tenue entièrement ou partiellement en français.
Dated at Toronto this 23rd day of September, 2025.
For more information
Please visit capitalmarketstribunal.ca or contact the Registrar at registrar@capitalmarketstribunal.ca.
(Subsection 127(1) and Section 127.1 of the Securities Act, RSO 1990 c S.5)
1. This case involves an insider trading scheme conceived by Huy Le (Alvin) Huynh.
2. In 2021, Huynh was a VP of Finance at Score Media & Gaming Inc. (Score). In the course of his employment, Huynh learned that Score would be acquired. Huynh told his spouse, Thi Anh Nguyet (Nancy) Pham, about the acquisition. Huynh knew that neither he nor Pham could trade in Score securities because the acquisition had not been publicly disclosed. Huynh enlisted Pham's friend, Jessica Tam, in a scheme to profit from his early knowledge of the transaction by using Tam as an intermediary to purchase and sell Score securities through her TFSA.
3. Huynh told Tam about the acquisition and gave Tam cash to deposit in her brokerage account. Huynh would tell Tam what trades to make in Score securities, and they would split the profits, with Huynh keeping the majority. Pham was generally aware that Huynh and Tam planned to trade in Score securities.
4. In late July and early August 2021, on Huynh's advice and instructions, Tam purchased 304 Score call options for less than US$7,000 through Tam's TFSA. The acquisition was announced publicly on August 5, 2021. The next day, Huynh told Tam to sell all 304 Score call options in Tam's TFSA for US$318,800, resulting in trading profits of approximately US$311,000.
5. Huynh tried to cover his tracks. After the trades were made, Huynh gave Tam instructions on what to do if anyone asked questions about the trades and gave her the contact information for a lawyer. Huynh told Tam to give him his share of the profits slowly, and in cash. Huynh, Pham and Tam arranged payments using codewords over instant messaging. Tam paid Huynh and Pham $270,000 in cash.
6. Insider trading and tipping are a scourge on capital markets. Advantages gained from undisclosed inside information, like those gained by the respondents are unfair to counterparties. They erode the public's trust in the efficiency and integrity of our capital markets. All Ontarians pay the social costs of the respondents' misconduct.
The Ontario Securities Commission (the Commission) makes the following allegations of fact:
7. Huynh and Pham are both residents of Mississauga, Ontario. They got married in 2017.
8. Huynh became a Chartered Professional Accountant (CPA) in 2010. At all material times, Huynh was employed as a VP Finance at Score, a digital media sports company based in Toronto, Ontario, that was publicly listed on the TSX and Nasdaq exchanges.
9. Pham became a CPA in 2018. At all material times, Pham was employed by Bell Canada. Pham was a finance manager at Bell Canada when she took parental leave in February 2021.
10. Neither Huynh nor Pham have ever been registered with the Commission in any capacity.
Insider Trading and Tipping
11. On or before July 3, 2021, Huynh learned, in the course of his employment, that Score would be acquired by Penn National Gaming, Inc.{1} (Penn), a US-based provider of integrated entertainment, sports content, and casino gaming experiences (the Acquisition) for approximately US$2 billion in cash and stock.
12. The Acquisition was material for Score and was not generally disclosed to the public until the morning of August 5, 2021.
13. Huynh told Pham about the Acquisition before it was generally disclosed to the public.
14. Huynh knew that neither he nor Pham could purchase or sell Score securities until the Acquisition was announced publicly. Huynh enlisted Pham's friend, Tam, to profit from his knowledge of the Acquisition by using Tam as an intermediary to purchase Score securities through her TFSA.
15. At all material times, Tam was an Ontario resident. She and Pham had been friends since high-school and regularly communicated over instant messaging. Tam also knew Huynh and communicated with him, including about matters related to investing.
16. On July 14, 2021, Pham invited Tam to come over on July 25, 2021, so Huynh could talk to Tam about "some investment thing".
17. On July 22, 2021, Tam opened a tax-free savings account (TFSA) with Interactive Brokers.
18. At some point in July 2021, Tam and Huynh met at a playground where they discussed options trading in general.
19. On July 25, 2021, Huynh met Tam at his house. Tam knew that Huynh worked in finance at Score. At this meeting, Huynh gave Tam material non-public information about the Acquisition.
20. Huynh presented Tam with an opportunity to invest with him in Tam's TFSA, which he described as an "investment arrangement." Huynh gave Tam $10,000{2} to deposit in her TFSA. Huynh would provide Tam with trading instructions, either in person or via telephone, and Tam would make the trades in her TFSA. Huynh proposed that the profits of the insider trading scheme be split with 80% for Huynh and Pham, and 20% for Tam.
21. Tam agreed with Huynh's proposal. Pham was generally aware that Huynh and Tam had a plan to trade in Score, but she was not aware of the specifics of that plan.
22. On July 28, 2021, Huynh told Tam to purchase Score call options (Options) in her TFSA and on July 29, 2021, 184 Options were purchased for US$5,152.
23. On August 2, 2021, Huynh told Tam to purchase more Options. Another 120 Options were purchased for US$1,800 the same day.
24. In the morning of August 5, 2021, Score and Penn announced the Acquisition publicly (the Announcement). That afternoon, Huynh told Tam to sell the Options. All the Options were sold from the TFSA the next day for US$318,800.
Splitting the Profits
25. Huynh told Tam to pay his share of the profits slowly, and in cash. Tam communicated with Huynh and Pham via WhatsApp to arrange delivery of the cash. Huynh, Pham and Tam agreed to use codewords over instant messaging to arrange payments. The codeword that was most frequently used was "toys", with one toy referring to $10,000.
26. Huynh and Pham received $270,000 in cash from Tam.
27. On December 12, 2021, Huynh and Pham met Tam in person. During this meeting, Huynh gave Tam a set of written instructions to use part of his share of the profit that remained in Tam's TFSA towards purchasing other securities. Huynh told Tam to delete his contact information from her phone and gave Tam the name and contact information of a lawyer to call if anyone asked questions about the Score trades.
28. The Commission alleges the following breaches of Ontario securities law:
a) Huynh, while in a special relationship with an issuer, purchased or sold securities of the issuer with the knowledge of a material fact or material change with respect to the issuer that had not been generally disclosed, contrary to s. 76(1) of the Securities Act, RSO 1990, c S.5;
b) Huynh, while in a special relationship with an issuer informed another person, namely Tam, outside the necessary course of business of a material fact or material change with respect to the issuer, before the material fact or material change had been generally disclosed, contrary to s. 76(2) of the Act;
29. In addition, Pham (i) knew about the Acquisition prior to the Announcement, (ii) knew that Huynh and Tam entered into an insider trading scheme to trade in Score securities, and (iii) accepted the benefits of the insider trading scheme. Such conduct was contrary to the public interest.
30. These allegations may be amended and further allegations may be added as counsel may advise and the Tribunal may permit.
31. The Commission requests that the Tribunal make the following orders against the respondents:
As against Huynh and Pham:
a) that they cease trading in any securities or derivatives permanently or for such period as is specified by the Tribunal under paragraph (2) of s. 127(1) of the Act;
b) that they be prohibited from acquiring any securities permanently or for the period specified by the Tribunal under paragraph (2.1) of s. 127(1) of the Act;
c) that any exemption contained in Ontario securities law do not apply to them permanently or for such period as is specified by the Tribunal under paragraph (3) of s. 127(1) of the Act;
d) that they be reprimanded under paragraph (6) of s. 127(1) of the Act;
e) that they resign any position they may hold as director or officer of any issuer under paragraph (7) of s. 127(1) of the Act;
f) that they be prohibited from acting as a director or officer of any issuer permanently, or for such period as is specified by the Tribunal under paragraph (8) of s. 127(1) of the Act;
g) that they resign any position they may hold as a director or officer of any registrant under paragraph (8.1) of s. 127(1) of the Act;
h) that they be prohibited from acting as a director or officer of any registrant permanently, or for such period as is specified by the Tribunal under paragraph (8.2) of s. 127(1) of the Act;
i) that they be prohibited from becoming or acting as a registrant or promoter permanently, or for such period as is specified by the Tribunal under paragraph (8.5) of s. 127(1) of the Act;
j) that they pay costs of the investigation and hearing, under s. 127.1 of the Act; and
k) such other order as the Tribunal may consider appropriate in the public interest.
As against Huynh:
l) that he pay an administrative penalty of not more than $5 million for each failure to comply with Ontario securities law under paragraph (9) of s. 127(1) of the Act;
m) that he disgorge to the Commission any amounts obtained as a result of non-compliance with Ontario securities law, under paragraph (10) of s. 127(1) of the Act.
DATED this 23rd day of September, 2025 |
|
ONTARIO SECURITIES COMMISSION |
|
20 Queen Street West, 22nd Floor |
|
Toronto, ON M5H 3S8 |
|
Sakina Babwani |
|
Litigation Counsel |
|
sbabwani@osc.gov.on.ca |
|
Tel: (416) 263-3763 |
|
Adam Gotfried |
|
Senior Litigation Counsel |
|
agotfried@osc.gov.on.ca |
|
Tel: (416) 263-7680 |
|
{1} Penn announced it changed its name to PENN Entertainment, Inc on August 4, 2022
{2} All references to currencies in this Settlement Agreement are references to Canadian dollars, unless otherwise indicated.
Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
September 23, 2025
TORONTO -- The Tribunal issued a Notice of Hearing for a hearing to consider whether it is in the public interest to approve a Settlement Agreement entered into by the Commission, Huy Le Huynh and Thi Anh Nguyet Pham in the above-named matter.
The hearing will be held on September 26, 2025, at 10:00 a.m. by videoconference.
Members of the public may observe the hearing by videoconference, by selecting the "View by Zoom" link on the Tribunal's hearing schedule, at capitalmarketstribunal.ca/en/hearing-schedule.
A copy of the Notice of Hearing dated September 23, 2025, and the Application for Enforcement Proceeding dated September 23, 2025 are available at capitalmarketstribunal.ca.
Subscribe to notices and other alerts from the Capital Markets Tribunal:
For Media Inquiries:
For General Inquiries:
Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
September 26, 2025
TORONTO -- Following a hearing held today, the Tribunal issued an Order in the above-named matter approving the Settlement Agreement reached between the Commission, Huy Le Huynh and Thi Anh Nguyet Pham.
A copy of the Order dated September 26, 2025, and Settlement Agreement dated September 23, 2025, are available at capitalmarketstribunal.ca.
Subscribe to notices and other alerts from the Capital Markets Tribunal:
For Media Inquiries:
For General Inquiries:
Ontario Securities Commission and Brian Arthur Kitts
FOR IMMEDIATE RELEASE
September 26, 2025
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Application for Enforcement Proceeding dated September 18, 2025, and Order dated September 26, 2025 are available at capitalmarketstribunal.ca.
Subscribe to notices and other alerts from the Capital Markets Tribunal:
For Media Inquiries:
For General Inquiries:
Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
September 30, 2025
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Order dated September 30, 2025 is available at capitalmarketstribunal.ca.
Subscribe to notices and other alerts from the Capital Markets Tribunal:
For Media Inquiries:
For General Inquiries:
Ontario Securities Commission et al. -- ss. 127(1), 127.1
BETWEEN:
File No. 2025-16
Adjudicators: |
James Douglas (chair of the panel) |
Cathy Singer |
|
Jane Waechter |
September 26, 2025
(Subsection 127(1) and section 127.1 of theSecurities Act, RSO 1990, c S.5)
WHEREAS on September 26, 2025, the Capital Markets Tribunal held a hearing by videoconference to consider the Joint Request for a Settlement Hearing filed by the Ontario Securities Commission and Huy Le Huynh (Huynh) and Thi Anh Nguyet Pham (Pham) for approval of a settlement agreement dated September 23, 2025 (the Settlement Agreement);
ON READING the Application for Enforcement Proceeding dated September 23, 2025, the Joint Request for a Settlement Hearing dated September 23, 2025, including the Settlement Agreement, the written submissions of the Commission and on hearing the submissions of the representatives for the parties, and on being advised by the Commission that it has received payment of all amounts in accordance with the terms of the Settlement Agreement;
IT IS ORDERED, for reasons to follow, that:
1. the Settlement Agreement is approved;
2. with respect to Huynh:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Huynh cease for a period of 7 years, except that he may trade:
i. mutual funds, exchange-traded funds, government bonds and/or guaranteed investment certificates (GICs) for the account of any registered retirement savings plan (RRSP), registered education savings plan (RESP), registered retirement income fund (RRIF) and TFSA, as defined in the Income Tax Act, RSC 1985, c 1 as amended (the Income Tax Act), in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Huynh must have given a copy of this Order.
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Huynh be prohibited for a period of 7 years, except that he may acquire:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Huynh must have given a copy of this Order.
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Huynh for a period of 7 years;
d. pursuant to paragraph 7 of subsection 127(1) of the Act, Huynh immediately resign any position that he holds as a director or officer of an issuer;
e. pursuant to paragraph 8 of subsection 127(1) of the Act, Huynh be prohibited from becoming or acting as a director or officer of any issuer for a period of 7 years;
f. pursuant to paragraph 8.1 of subsection 127(1) of the Act, Huynh immediately resign any position that he holds as a director or officer of a registrant;
g. pursuant to paragraph 8.2 of subsection 127(1) of the Act, Huynh be prohibited from becoming or acting as a director or officer of a registrant for a period of 7 years;
h. pursuant to paragraph 9 of subsection 127(1) of the Act, Huynh shall pay to the Commission an administrative penalty in the amount of $325,000;
i. pursuant to paragraph 10 of subsection 127(1) of the Act, Huynh shall disgorge to the Commission the amount of $270,000;
j. pursuant to subsection 127.1(1) of the Act, Huynh shall pay to the Commission costs of the investigation in the amount of $40,000;
3. with respect to Pham:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Pham cease for a period of 3 years, except that she may trade:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Pham must have given a copy of this Order.
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Pham shall be prohibited for a period of 3 years, except that she may acquire:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Pham must have given a copy of this Order.
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Pham for a period of 3 years;
d. pursuant to paragraph 8 of subsection 127(1) of the Act, Pham be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of 3 years;
e. pursuant to paragraph 8.2 of subsection 127(1) of the Act, Pham be prohibited from becoming or acting as a director or officer of a registrant for a period of 3 years; and f. pursuant to subsection 127.1(1) of the Act, Pham pay to the Commission costs of the investigation in the amount of $10,000.
1. This case involves an insider trading scheme conceived by Huy Le (Alvin) Huynh.
2. In 2021, Huynh was a VP of Finance at Score Media & Gaming Inc. (Score). In the course of his employment, Huynh learned that Score would be acquired. Huynh told his spouse, Thi Anh Nguyet (Nancy) Pham, about the acquisition. Huynh knew that neither he nor Pham could trade in Score securities because the acquisition had not been publicly disclosed. Huynh enlisted Pham's friend, Jessica Tam, to profit from his early knowledge of the transaction by using Tam as an intermediary to purchase and sell Score securities through Tam's TFSA.
3. Huynh told Tam about the acquisition and gave Tam cash to deposit in her brokerage account. Huynh would tell Tam what trades to make in Score securities, and they would split the profits, with Huynh keeping the majority. Pham was generally aware that Huynh and Tam planned to trade in Score securities.
4. In late July and early August 2021, on Huynh's advice and instructions, Tam purchased 304 Score call options for less than US$7,000 through Tam's TFSA. The acquisition was announced publicly on August 5, 2021. The next day, Huynh told Tam to sell all 304 Score call options in Tam's TFSA for US$318,800, resulting in trading profits of approximately US$311,000.
5. Huynh tried to cover his tracks. After the trades were made, Huynh gave Tam instructions on what to do if anyone asked questions about the trades and gave her the contact information for a lawyer. Huynh told Tam to give him his share of the profits slowly, and in cash. Huynh, Pham and Tam arranged cash payments using codewords over instant messaging. Tam paid Huynh and Pham $270,000 in cash.
6. Insider trading and tipping are a scourge on capital markets. Advantages gained from undisclosed inside information, like those gained by the respondents are unfair to counterparties. They erode the public's trust in the efficiency and integrity of our capital markets. All Ontarians pay the social costs of the respondents' misconduct.
7. Huynh has cooperated with the Commission's investigation and has admitted to his role in the insider trading scheme. Pham has also cooperated with the Commission's investigation and has admitted she engaged in conduct contrary to the public interest.
8. The parties will jointly file a request that the Capital Markets Tribunal (the Tribunal) issue a Notice of Hearing to announce that it will hold a hearing (the Settlement Hearing) to consider whether, pursuant to sections 127 and 127.1 of the Securities Act, RSO 1990, c S.5 (the Act), it is in the public interest for the Tribunal to make certain orders against Huynh and Pham.
9. The parties recommend settlement of the Proceeding against the respondents in accordance with the terms and conditions set out in this agreement (the Settlement Agreement). The respondents consent to the making of an order (the Order) substantially in the form attached as Schedule "A" to this Settlement Agreement based on the facts set out herein.
10. For the purposes of the Proceeding, and any other regulatory proceeding commenced by the Commission or another securities regulatory authority, the respondents agree with the facts set out in Part III of this Settlement Agreement and the conclusions in Part IV and V of this Settlement Agreement.
A. Insider Trading
11. Huynh and Pham are both residents of Mississauga, Ontario. They got married in 2017.
12. Huynh became a Chartered Professional Accountant (CPA) in 2010. At all material times, Huynh was employed as a VP Finance at Score, a digital media sports company based in Toronto, Ontario, that was publicly listed on the TSX and Nasdaq exchanges.
13. Pham became a CPA in 2018. At all material times, Pham was employed by Bell Canada. Pham was a finance manager at Bell Canada when she took parental leave in February 2021.
14. On or before July 3, 2021, Huynh learned, in the course of his employment, that Score was to be acquired by Penn National Gaming, Inc.{1} (Penn), a US-based provider of integrated entertainment, sports content, and casino gaming experiences (the Acquisition) for approximately US$2 billion in cash and stock.
15. The Acquisition was material for Score and was not generally disclosed to the public until the morning of August 5, 2021.
16. Huynh told Pham about the Acquisition before it was generally disclosed to the public.
17. Huynh knew that neither he nor Pham could purchase or sell Score securities until the Acquisition was announced publicly. Huynh enlisted Pham's friend, Tam, to profit from his knowledge of the Acquisition by using Tam as an intermediary to purchase Score securities through her TFSA.
18. At all material times, Tam was an Ontario resident. She and Pham had been friends since high-school and regularly communicated over instant messaging. Tam also knew Huynh and communicated with him, including about matters related to investing.
19. On July 14, 2021, Pham invited Tam to come over on July 25, 2021, so Huynh could talk to Tam about "some investment thing".
20. On July 22, 2021, Tam opened a tax-free savings account (TFSA) with Interactive Brokers.
21. At some point in July 2021, Tam and Huynh met at a playground where they discussed options trading in general.
22. On July 25, 2021, Huynh met Tam at his house. Tam knew that Huynh worked in finance at Score. At this meeting, Huynh gave Tam material non-public information about the Acquisition.
23. Huynh presented Tam with an opportunity to invest with him in Tam's TFSA, which he described as an "investment arrangement." Huynh gave Tam $10,000{2} to deposit in her TFSA. Huynh would provide Tam with trading instructions, either in person or via telephone, and Tam would make the trades in her TFSA. Huynh proposed that the profits of the insider trading scheme be split with 80% for Huynh and Pham, and 20% for Tam.
24. Tam agreed with Huynh's proposal. Pham was generally aware that Huynh and Tam had a plan to trade in Score, but she was not aware of the specifics of that plan.
25. On July 28, 2021, Huynh told Tam to purchase Score call options (Options) in her TFSA, and on July 29, 2021, 184 Options were purchased in the TFSA for US$5,152.
26. On August 2, 2021, Huynh told Tam to purchase more Options. Another 120 Options were purchased in the TFSA for US$1,800 the same day.
27. In the morning of August 5, 2021, Score and Penn announced the Acquisition publicly (the Announcement). That afternoon, Huynh told Tam to sell the Options. All the Options were sold from the TFSA the next day for US$318,800.
B. Splitting the Profits
28. Huynh told Tam to pay his share of the profits slowly, and in cash. Tam communicated with Huynh and Pham via WhatsApp to arrange delivery of the cash. Huynh, Pham and Tam used codewords over instant messaging to arrange payments. The codeword that was most frequently used was "toys", with one toy referring to $10,000.
29. Huynh and Pham received $270,000 in cash from Tam.
30. On December 12, 2021, Huynh and Pham met Tam in person. During this meeting, Huynh gave Tam a set of written instructions to use part of his share of the profit that remained in Tam's TFSA towards purchasing other securities. Huynh told Tam to delete his contact information from her phone and gave Tam the name and contact information of a lawyer to call if anyone asked questions about the Score trades.
C. Mitigating Factors
31. The respondents have accepted full responsibility for their conduct.
32. Huynh has admitted to his role in the insider trading scheme.
33. Pham has admitted that she engaged in conduct contrary to the public interest in relation to the trading.
34. The respondents cooperated during the Commission's investigation. They have been granted credit for cooperation pursuant to the OSC Staff Notice 15-702: Revised Credit for Cooperation Program.
35. The respondents have no history of prior misconduct with any securities regulatory authority.
36. The respondent, Huy Le (Alvin) Huynh, acknowledges and admits that, in 2021, he:
(a) while in a special relationship with an issuer, purchased or sold securities of the issuer with the knowledge of a material fact or material change with respect to the issuer that had not been generally disclosed, contrary to s. 76(1) of the Act.
(b) while in a special relationship with an issuer, informed another person, namely Tam, outside the necessary course of business of a material fact or material change with respect to the issuer, before the material fact or material change had been generally disclosed, contrary to s. 76(2) of the Act.
37. The respondent, Thi Anh Nguyet (Nancy) Pham, acknowledges and admits that, in 2021, she (i) knew about the Acquisition prior to the Announcement, (ii) knew that Huynh and Tam made a plan to trade in Score securities, and (iii) accepted the benefits of Huynh and Tam's insider trading. Such conduct was contrary to the public interest.
38. The respondents agree to the terms of settlement set forth below.
39. The respondents consent to the Order in the form attached as Schedule "A", pursuant to which it is ordered that:
(a) the Settlement Agreement is approved;
Huynh:
(b) trading in any securities or derivatives by Huynh cease for a period of 7 years commencing on the date of the Order, pursuant to paragraph 2 of subsection 127(1) of the Act, except that Huynh shall be permitted to trade:
(i) mutual funds, exchange-traded funds, government bonds and/or guaranteed investment certificates (GICs) for the account of any registered retirement savings plan (RRSP), registered education savings plan (RESP), registered retirement income fund (RRIF) and TFSA, as defined in the Income Tax Act, RSC 1985, c 1 as amended (the Income Tax Act), in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children is the beneficiary; and
(ii) solely through a registered dealer in Ontario, to whom Huynh must have given a copy of the Order.
(c) the acquisition of any securities by Huynh be prohibited for a period of 7 years commencing on the date of the Order, pursuant to paragraph 2.1 of subsection 127(1) of the Act, except that Huynh shall be permitted to acquire:
(i) mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children is the beneficiary; and
(ii) solely through a registered dealer in Ontario, to whom Huynh must have given a copy of the Order.
(d) any exemptions contained in Ontario securities law do not apply to Huynh for a period of 7 years commencing on the date of the Order, pursuant to paragraph 3 of subsection 127(1) of the Act;
(e) Huynh immediately resign any position that he holds as a director or officer of an issuer, pursuant to paragraph 7 of subsection 127(1) of the Act;
(f) Huynh immediately resign any position that he holds as a director or officer of a registrant, pursuant to paragraph 8.1 of subsection 127(1) of the Act;
(g) Huynh be prohibited from becoming or acting as a director or officer of any issuer for a period of 7 years commencing on the date of the Order, pursuant to paragraph 8 of subsection 127(1) of the Act;
(h) Huynh be prohibited from becoming or acting as a director or officer of any registrant for a period of 7 years commencing on the date of the Order, pursuant to paragraph 8.2 of subsection 127(1) of the Act;
(i) Huynh pay an administrative penalty in the amount of $325,000, pursuant to paragraph 9 of subsection 127(1) of the Act;
(j) Huynh disgorge to the Commission the amount of $270,000, pursuant to paragraph 10 of subsection 127(1) of the Act;
(k) Huynh pay to the Commission costs of the investigation in the amount of $40,000, pursuant to subsection 127.1(1) of the Act; and
(l) the amounts set out in subparagraphs (i), (j) and (k) above be paid in full to the Commission by wire transfer before the Tribunal conducts a public hearing to approve this Settlement Agreement.
Pham
(m) trading in any securities or derivatives by Pham cease for a period of 3 years commencing on the date of the Order, pursuant to paragraph 2 of subsection 127(1) of the Act, except that Ms. Pham shall be permitted to trade:
(i) mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children is the beneficiary; and
(ii) solely through a registered dealer in Ontario, to whom Pham must have given a copy of the Order.
(n) the acquisition of any securities by Pham be prohibited for a period of 3 years commencing on the date of the Order, pursuant to paragraph 2.1 of subsection 127(1) of the Act, except that Pham shall be permitted to acquire:
(i) mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children is the beneficiary; and
(ii) solely through a registered dealer in Ontario, to whom Pham must have given a copy of the Order.
(o) any exemptions contained in Ontario securities law do not apply to Pham for a period of 3 years commencing on the date of the Order, pursuant to paragraph 3 of subsection 127(1) of the Act;
(p) Pham be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of 3 years commencing on the date of the Order, pursuant to paragraph 8 of subsection 127(1) of the Act;
(q) Pham be prohibited from becoming or acting as a director or officer of any registrant for a period of 3 years commencing on the date of the Order, pursuant to paragraph 8.2 of subsection 127(1) of the Act;
(r) Pham pay to the Commission costs of the investigation in the amount of $10,000, pursuant to subsection 127.1(1) of the Act; and
(s) the amount set out in subparagraph(r) above be paid in full to the Commission by wire transfer before the Tribunal conducts a public hearing to approve this Settlement Agreement.
40. The respondents acknowledge that this Settlement Agreement and the Order may form the basis for orders of parallel effect in other jurisdictions in Canada. The securities laws of some other Canadian jurisdictions allow orders made in this matter to take effect in those other jurisdictions automatically, without further notice to the respondents. The respondents should contact the securities regulator of any other jurisdiction in which the respondents intend to engage in any securities or derivatives-related activities, prior to undertaking such activities.
41. If the Tribunal approves this Settlement Agreement, no enforcement proceedings will be continued against the respondents under Ontario securities law based on the misconduct described in Part III of this Settlement Agreement, unless the respondents fail to comply with any term in this Settlement Agreement, in which case enforcement proceedings may be brought or continued under Ontario securities law against the respondents that may be based on, among other things, the facts set out in Part III of this Settlement Agreement as well as the breach of this Settlement Agreement.
42. The respondents acknowledge that if the Tribunal approves this Settlement Agreement and Huynh or Pham fail to comply with any term in it, proceedings may be brought in order to, among other things, recover the amounts set out in subparagraphs 38 (i), (j), (k), and (r) above.
43. The respondents waive any defences to a proceeding referenced in paragraphs 40 or 41 above that are based on the limitation period in the Act, provided that no such proceeding shall be commenced later than six years from the date of the occurrence of the last failure to comply with this Settlement Agreement.
44. The parties will seek approval of this Settlement Agreement at the Settlement Hearing before the Tribunal, which shall be held on a date determined by the Tribunal's Governance and Tribunal Secretariat in accordance with this Settlement Agreement and the Tribunal's Rules of Procedure.
45. The respondents will attend the Settlement Hearing in person or by video conference.
46. The parties confirm that this Settlement Agreement sets forth all of the agreed facts that will be submitted at the Settlement Hearing, unless the parties agree that additional facts should be submitted at the Settlement Hearing.
47. If the Tribunal approves this Settlement Agreement:
(a) the respondents irrevocably waive all rights to a full hearing, judicial review or appeal of this matter under the Act; and
(b) none of the parties will make any public statement that is inconsistent with this Settlement Agreement or with any additional agreed facts submitted at the Settlement Hearing.
48. Whether or not the Tribunal approves this Settlement Agreement, the respondents will not use, in any proceeding, this Settlement Agreement or the negotiation or process of approval of this Settlement Agreement as the basis for any attack on the Commission or the Tribunal's jurisdiction, alleged bias, alleged unfairness or any other remedies or challenges that may be available.
49. If the Tribunal does not approve this Settlement Agreement or does not make an order substantially in the form of the Order attached as Schedule "A" to this Settlement Agreement:
(a) this Settlement Agreement and all discussions and negotiations between the parties before the Settlement Hearing will be without prejudice to any party; and
(b) the parties will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing on the merits of the allegations contained in an Application for Enforcement Proceeding based on the conduct described herein. Any such proceedings, remedies and challenges will not be affected by this Settlement Agreement, or by any discussions or negotiations relating to this Settlement Agreement.
50. The parties will keep the terms of this Settlement Agreement confidential until the Settlement Hearing, except as is necessary to make submissions at the Settlement Hearing. If, for whatever reason, the Tribunal does not approve the Settlement Agreement, the terms of the Settlement Agreement shall remain confidential indefinitely, unless the parties otherwise agree in writing or if required by law.
51. This Settlement Agreement may be signed in one or more counterparts which together constitute a binding agreement.
52. A facsimile copy or other electronic copy of any signature will be as effective as an original signature.
DATED at Toronto, Ontario this 22nd day of September, 2025.
"Thi Anh Nguyet Pham" |
"Huy Le Huynh" |
___________________________ |
___________________________ |
Witness: Thi Anh Nguyet Pham |
HUY LE (ALVIN) HUYNH |
DATED at Toronto, Ontario this 22nd day of September, 2025.
"Huy Le Huynh" |
"Thi Anh Nguyet Pham" |
___________________________ |
___________________________ |
Witness: Huy Le Huynh |
THI ANH NGUYET (NANCY) PHAM |
DATED at Toronto, Ontario, this 23rd day of September, 2025.
File No. XX
Adjudicators: |
James Douglas (chair of the panel) |
Cathy Singer |
|
Jane Waechter |
September XX, 2025
(Subsection 127(1) and section 127.1 of theSecurities Act, RSO 1990, c S.5)
WHEREAS on [date], the Capital Markets Tribunal held a hearing by videoconference to consider the Joint Request for a Settlement Hearing filed by the Ontario Securities Commission and Huy Le (Alvin) Huynh (Huynh) and Thi Anh Nguyet (Nancy) Pham (Pham) for approval of a settlement agreement dated [date] (the Settlement Agreement);
ON READING the Application for Enforcement Proceeding dated [date], the Joint Request for a Settlement Hearing dated [date], including the Settlement Agreement, the written submissions of the Commission and on hearing the submissions of the representatives for the parties, and on being advised by the Commission that it has received payment of all amounts in accordance with the terms of the Settlement Agreement;
IT IS ORDERED THAT:
1. The Settlement Agreement is approved;
2. With respect to Huynh:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Huynh cease for a period of 7 years, except that he may trade:
i. mutual funds, exchange-traded funds, government bonds and/or guaranteed investment certificates (GICs) for the account of any registered retirement savings plan (RRSP), registered education savings plan (RESP), registered retirement income fund (RRIF) and TFSA, as defined in the Income Tax Act, RSC 1985, c 1 as amended (the Income Tax Act), in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Huynh must have given a copy of this Order.
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Huynh be prohibited for a period of 7 years, except that he may acquire:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Huynh has sole legal and beneficial ownership or, for an RESP, in which one or both of Huynh's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Huynh must have given a copy of this Order.
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Huynh for a period of 7 years;
d. pursuant to paragraph 7 of subsection 127(1) of the Act, Huynh immediately resign any position that he holds as a director or officer of an issuer;
e. pursuant to paragraph 8 of subsection 127(1) of the Act, Huynh be prohibited from becoming or acting as a director or officer of any issuer for a period of 7 years;
f. pursuant to paragraph 8.1 of subsection 127(1) of the Act, Huynh immediately resign any position that he holds as a director or officer of a registrant;
g. pursuant to paragraph 8.2 of subsection 127(1) of the Act, Huynh be prohibited from becoming or acting as a director or officer of a registrant for a period of 7 years;
h. pursuant to paragraph 9 of subsection 127(1) of the Act, Huynh shall pay to the Commission an administrative penalty in the amount of $325,000;
i. pursuant to paragraph 10 of subsection 127(1) of the Act, Huynh shall disgorge to the Commission the amount of $270,000;
j. pursuant to subsection 127.1(1) of the Act, Huynh shall pay to the Commission costs of the investigation in the amount of $40,000;
3. With respect to Pham:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Pham cease for a period of 3 years, except that she may trade:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Pham must have given a copy of this Order.
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Pham shall be prohibited for a period of 3 years, except that she may acquire:
i. mutual funds, exchange-traded funds, government bonds and/or GICs for the account of any RRSP, RESP, RRIF and TFSA, as defined in the Income Tax Act, in which Pham has sole legal and beneficial ownership or, for an RESP, in which one or both of Pham's children are the beneficiaries; and
ii. solely through a registered dealer in Ontario, to whom Pham must have given a copy of this Order.
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Pham for a period of 3 years;
d. pursuant to paragraph 8 of subsection 127(1) of the Act, Pham be prohibited from becoming or acting as a director or officer of any reporting issuer for a period of 3 years;
e. pursuant to paragraph 8.2 of subsection 127(1) of the Act, Pham be prohibited from becoming or acting as a director or officer of a$s:ny$es: registrant for a period of 3 years; and f. pursuant to subsection 127.1(1) of the Act, Pham pay to the Commission costs of the investigation in the amount of $10,000.
________________________________ |
|
James Douglas |
|
________________________________ |
________________________________ |
Cathy Singer |
Jane Waechter |
{1} Penn announced it changed its name to PENN Entertainment, Inc on August 4, 2022
{2} All references to currencies in this Settlement Agreement are references to Canadian dollars, unless otherwise indicated.
Ontario Securities Commission and Brian Arthur Kitts -- ss. 127(1), 127(4.0.2)
BETWEEN:
File No. 2025-20
Adjudicator: |
Geoffrey D. Creighton (chair of the panel) |
September 26, 2025
WHEREAS the Capital Markets Tribunal held a hearing in writing to consider an application brought by the Ontario Securities Commission for an order imposing sanctions against the respondent, Brian Arthur Kitts, without giving the respondent an opportunity to be heard, pursuant to subsections 127(1) and 127(4.0.2) of the Securities Act, (the Act);
ON READING the materials filed by the Commission, and the Decision of the Alberta Securities Commission;
IT IS ORDERED THAT:
1. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by the respondent shall cease permanently;
2. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the respondent is permanently prohibited from acquiring any securities;
3. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to the respondent permanently;
4. pursuant to paragraphs 7, 8.1, and 8.3 of subsection 127(1) of the Act, the respondent resign all positions that he holds as a director or officer of any issuer, registrant, or investment fund manager;
5. pursuant to paragraphs 8, 8.2, and 8.4 of subsection 127(1) of the Act, the respondent is permanently prohibited from becoming or acting as a director or officer of any issuer, registrant, or investment fund manager; and
6. pursuant to paragraph 8.5 of subsection 127(1) of the Act, the respondent is permanently prohibited from becoming or acting as a registrant, an investment fund manager or a promoter.
BETWEEN:
Applicant
AND
Respondent
(Subsections 127(1) and 127(4.0.2) of the Securities Act, RSO 1990, c S.5)
1. The Applicant, the Ontario Securities Commission (the Commission), requests that the Capital Markets Tribunal (the Tribunal) make an order in the public interest against the Respondent reciprocating an order made by the Alberta Securities Commission (the ASC), without providing the Respondent an opportunity to be heard.
2. The ASC found that the Respondent, Brian Arthur Kitts (Kitts), and his company, Vesta Capcorp Inc. (Vesta), engaged in a course of conduct relating to securities that they knew perpetrated a fraud on investors, contrary to Alberta securities legislation. Namely, the ASC found that Kitts and Vesta raised money from investors through the issuance of promissory notes, which were securities, that promised to pay principal and "profit sharing". However, they misrepresented to prospective investors that funds invested with Vesta would be used to provide short-term financing to real estate industry participants, when in reality, Kitts and Vesta diverted funds to unidentified businesses, misappropriated funds to the personal use of Kitts and his spouse, and used funds to repay principal and imaginary profits to existing investors.
3. The sanctions imposed by the ASC against the Respondent included permanent trading, director and officer, and other market participation bans.
4. The Tribunal has jurisdiction to make an order in the public interest under ss. 127(1) and 127(4.0.2) of the Securities Act, RSO 1990, c S.5 (the Act), reciprocating an order made by a securities regulatory authority of another province that imposes sanctions, conditions, restrictions or requirements on a person or company.
5. The order requested herein is in the public interest. It is necessary to restrain potential future misconduct by the Respondent that exposes Ontario investors to unacceptable risks and to deter others from engaging in fraudulent conduct, including the misappropriation of investor funds and the operation of a Ponzi scheme.
6. On June 3, 2019, the ASC panel released its written decision following a 7-day merits hearing. Kitts sporadically participated in the hearing by telephone, did not present any evidence in his defence, and, after the hearing of evidence, failed to provide written submissions or make oral submissions.
7. In its merits decision, the ASC panel held that the promissory notes issued by Vesta were "securities" within the meaning of s. 1(ggg) of the Alberta Securities Act, RSA 2000, c S-4 (the Alberta Act), and that Kitts and Vesta engaged in a course of conduct relating to securities that they knew perpatrated a fraud on investors, contrary to section 93(b) of the Alberta Act.{1}
8. Following issuance of the merits decision, the ASC proceeding moved into a second phase to determine what orders ought to be made against Kitts and Vesta. Neither Kitts nor Vesta submitted any evidence or written submissions.
9. On November 12, 2019, the ASC panel released its sanctions decision. The ASC panel imposed the following sanctions against Kitts:
(a) pursuant to ss. 198(1)(b) and (c) of the Alberta Act, Kitts must permanently cease trading in or purchasing securities or derivatives, and all of the exemptions contained in Alberta securities laws do not apply to Kitts;
(b) pursuant to ss. 198(1)(d) and (e) of the Alberta Act,
(i) Kitts must resign all positions he holds as a director or officer of any issuer, registrant, investment fund manager, recognized exchange, recognized self-regulatory organization, recognized clearing agency, recognized trade repository, designated rating organization or designated benchmark administrator; and
(ii) Kitts is permanently prohibited from becoming or acting as a director or officer of any issuer or other person or company that is authorized to issue securities, or of a registrant, investment fund manager, recognized exchange, recognized self-regulatory organization, recognized clearing agency, recognized trade repository, designated rating organization or designated benchmark administrator;
(c) pursuant to s. 198(1)(c.1), (e.1), (e.2) and (e.3) of the Alberta Act, Kitts is permanently prohibited from engaging in investor relations activities, from advising in securities or derivatives, from becoming or acting as a registrant, investment fund manager or promoter, and from acting in a management or consultative capacity in connection with activities in the securities market;
(d) pursuant to s. 198(1)(i) of the Alberta Act, Kitts must pay, jointly and severally with Vesta, to the ASC the amount of $1,960,457 obtained as a result of non-compliance with Alberta securities laws;
(e) pursuant to s. 199 of the Alberta Act, Kitts must pay, jointly and severally with Vesta, to the ASC an administrative penalty in the amount of $600,000; and
(f) pursuant to s. 202 of the Alberta Act, Kitts must pay, jointly and severally with Vesta, costs to the ASC in the amount of $150,000.
10. The Commission relies on the following findings made by the ASC panel in its merits and sanctions decisions (together, the ASC Decision):
11. Vesta was a federally incorporated company throughout the relevant time period from February 20, 2014 through to June 30, 2015 (the Relevant Period). Vesta was registered in Alberta as an extra-provincial corporation in September 2014, but was struck from Alberta's corporate registry on March 2, 2017.
12. The Respondent, Kitts, was the sole director, president, secretary, and guiding mind of Vesta. He appeared to sign all documents on behalf of Vesta, including promissory notes issued to investors, and he had sole signing authority for Vesta's Canadian dollar and US dollar bank accounts.
13. During the Relevant Period, Vesta raised approximately CAD $4.3 million and USD $850,000 from approximately 38 confirmed investors. Vesta also received more than CAD $1.26 million and USD $87,000 from an additional 27 sources identified as "Possible Investors."
14. Vesta raised money from investors by issuing short-term promissory notes (the Notes), each with a term typically ranging from 15 to 90 days and promising to repay the principal sum along with either "fees and profit sharing" or "profit sharing" at a 20% monthly rate of return.
15. Notes were generally funded in one of the following ways:
(a) New capital;
(b) "Roll over" funds -- the principal amounts and/or the supposed "profits" from a maturing Note;
(c) Referral fees or commissions owed by Vesta to referral agents or existing investors for introducing others to the company; or
(d) Any combination of the above.
16. Through referral agents, emails, telephone conversations, in-person meetings, and PowerPoint presentations, Kitts represented to prospective investors that their funds would be used by Vesta to provide short-term financing to individuals or entities in the real estate industry, and that they would receive their principal and profit-sharing once Vesta's real estate client repaid the money on the close of a pending real estate transaction. Investors were led to believe that funds from each Note would go to a specific project, that there was a "guaranteed exit strategy" and that Vesta had an operating history of no defaults to investors and average returns of 15% per month.
17. In reality, Vesta was not running any legitimate business. It was not financing real estate developments or sales transactions in a manner consistent with representations to investors, nor was it receiving money from real estate industry participants.
18. Instead, Vesta investor funds were diverted to unidentified businesses that were not within the reasonable expectation of Vesta investors, misappropriated for the personal use of Kitts and his spouse, and used to repay principal and imaginary profits to existing investors in a manner consistent with a Ponzi scheme. In particular, during the Relevant Period:
(a) Vesta transferred CAD $162,760 and USD $226,278 to "Clutch Sportz LLC", and CAD $46,113 and USD $485,495 to "Cock Diesel, LLC", a company in which Kitts had a concealed ownership interest;
(b) At least CAD $900,000 were diverted for the personal use of Kitts and his spouse; and
(c) Approximately CAD $2.8 million and USD $450,102 were paid to Vesta investors, and approximately CAD $700,000 and USD $15,075 were paid to "possible investors".
19. By May 2015, Vesta was unable to make payments to most investors within the promised timeframes.
20. In response to payment requests from investors with maturing Notes, Kitts often represented that he had (unilaterally) reinvested their principal and/or purported profits into new Notes, either because the funds were not being used or to cover a shortage in a "float" that he used to "fund new opportunities".
21. Ultimately, Vesta investors experienced significant financial losses.
22. Kitts had a pattern of recidivist securities misconduct.
23. During the Relevant Period, Kitts had pled no contest to criminal charges relating to securities fraud and theft in the State of Utah, and he had been sanctioned by the Utah Securities Commission for securities-related infractions. He has since been sentenced to imprisonment on four counts of securities fraud and theft.
24. Kitts absconded and thereafter continued his fraudulent capital-market activity in Alberta in the face of regulatory sanctions and criminal proceedings elsewhere, thus flouting Alberta securities laws.
25. The ASC held that the Notes documented receipt of principal amounts paid by a Vesta investor in exchange for Vesta's promise to repay that principal amount and to pay "profit sharing" to the investor at a future date. Thus, the Notes constituted either "evidence of indebtedness" or an "agreement under which money received will be paid" and were therefore "securities" within the meaning of s. 1(ggg) of the Alberta Act.
26. The ASC also held that Kitts and Vesta engaged in a course of conduct relating to securities that they knew perpetrated a fraud, contrary to s. 93(b) of the Alberta Act, and that Kitts authorized and permitted Vesta's misconduct:
(a) Kitts and Vesta's actions during the Relevant Period consituted prohibited acts -- deceit, falsehood or other fraudulent means -- that placed investors' pecuniary interests at risk; and
(b) Kitts, and by extension Vesta, had subjective knowledge that investors' pecuniary interests were placed at risk through their prohibited acts. Kitts orchestrated the scheme, knew that the investment opportunities he presented were fictitious, and misappropriated investor funds for unauthorized uses.
27. Kitts posed a pronounced risk to the public and was deserving of significant sanctions that will prevent him from future participation in the capital market. The ASC therefore imposed permanent market access bans and significant monetary sanctions against Kitts.
28. The Notes offered by Kitts and Vesta are securities under the Act.
29. Pursuant to paragraph 2 of subsection 127(4.0.2) of the Act, the Tribunal may make any of the orders described in paragraphs 1 to 8.5 of subsection 127(1) of the Act against the Respondent, without giving the Respondent an opportunity to be heard, where the Respondent is subject to an order made by a securities regulatory authority of another province or territory in Canada, imposing sanctions, conditions, restrictions or requirements.
30. The ASC, which is a "securities regulatory authority of another province or territory in Canada", as defined in subsection 127(10) of the Act, issued an order imposing sanctions against the Respondent within the meaning of s. 127(4.0.2).
31. Section 127(4.0.4) of the Act expressly allows the Tribunal to make an order under s.127(4.0.2) even though the ASC Decision predates the coming into force of s. 127(4.0.2).
32. It is in the public interest to make the requested order. Kitts poses a risk to Ontario investors. The requested order is necessary to protect the investing public and safeguard the integrity of Ontario's capital markets.
33. The Commission requests that the Tribunal make the following order against Kitts:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by the Respondent shall cease permanently;
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the Respondent is permanently prohibited from acquiring any securities;
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to the Respondent permanently;
d. pursuant to paragraphs 7, 8.1, and 8.3 of subsection 127(1) of the Act, the Respondent shall resign any positions that he holds as a director or officer of any issuer, registrant, or investment fund manager;
e. pursuant to paragraphs 8, 8.2, and 8.4 of subsection 127(1) of the Act, the Respondent is permanently prohibited from becoming or acting as a director or officer of any issuer, registrant, or investment fund manager;
f. pursuant to paragraph 8.5 of subsection 127(1) of the Act, The Respondent is permanently prohibited from becoming or acting as a registrant, an investment fund manager or a promoter; and
g. such other order or orders as the Tribunal considers appropriate.
September 18, 2025 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
|
Toronto, ON |
|
M5H 3S8 |
|
Christine Gorgi |
|
Litigation Counsel |
|
Enforcement Division |
|
LSO# 85216P |
|
Tel: (416) 263-7717 |
|
Email: cgorgi@osc.gov.on.ca |
|
{1} Now, section 93(1)(b) of the Alberta Act.
Ontario Securities Commission et al.
File No. 2025-15
Adjudicator: |
Geoffrey D. Creighton |
September 30, 2025
WHEREAS on September 30, 2025, the Capital Markets Tribunal held a hearing by videoconference;
ON READING the materials filed by the Ontario Securities Commission, and on hearing the submissions of the representatives for the Commission and for the respondents;
IT IS ORDERED THAT:
1. by 4:30 PM on October 30, 2025, the Commission shall disclose to the respondents the non-privileged, relevant documents and things in the Commission's possession or control;
2. by 4:30 PM on January 16, 2026, the respondents shall serve and file a motion, if any, regarding the Commission's disclosure or seeking disclosure of additional documents;
3. by 4:30 PM on January 21, 2026, the Commission shall:
a. serve and file a witness list;
b. serve a summary of each witness's expected testimony, and
c. indicate any intention to call an expert witness, including providing the expert's name and the issues on which the expert will give evidence; and
4. a further case management hearing in this matter is scheduled for January 28, 2026, at 10:00 AM, by videoconference, or on such other date and time as may be agreed to by the parties and set by the Governance & Tribunal Secretariat.
Tantalex Lithium Resources Corporation
Application for partial revocation of a cease trade order -- issuer cease traded due to failure to file with the Commission audited annual financial statements, related management's discussion and analysis and certification of the foregoing filings, as required by Ontario securities law -- issuer has applied for partial revocation of the cease trade order to permit the issuer to proceed with a private placement to accredited investors -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents and pay related fees -- partial revocation granted subject to conditions.
Securities Act, R.S.O. 1990, c.S.5, as am., s. 144.
1. Tantalex Lithium Resources Corporation (the Issuer) is subject to a failure-to-file cease trade order (the FFCTO) issued by the Ontario Securities Commission (the Principal Regulator) on July 7, 2025.
2. The Issuer has applied to the Principal Regulator for a partial revocation order of the FFCTO.
Terms defined in National Instrument 14-101 Definitions or in National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions have the same meaning if used in this order, unless otherwise defined.
This decision is based on the following facts represented by the Issuer:
1. The Issuer was incorporated under the Business Corporations Act (British Columbia) on September 28, 2009.
2. The head office of the Issuer is located at 1410-120 Adelaide St. West, Toronto, Ontario, M5H 1T1, Canada.
3. The Issuer is a reporting issuer under the securities legislation of the provinces of Alberta, British Columbia, and Ontario and is not a reporting issuer or equivalent under the securities legislation of any other jurisdiction in Canada.
4. The Issuer's authorized capital consists of an unlimited number of common shares (the Common Shares) without par value, of which a total of 907,011,459 Common Shares are issued and outstanding.
5. The Common Shares of the Issuer are listed on the Canadian Securities Exchange (CSE) under the symbol "TTX", on the Frankfurt Stock Exchange under the symbol "DW8" and on the US OTCQB Venture Market under the symbol "TTLXF". The securities of the Issuer are not listed or quoted on any other exchange or marketplace in Canada or elsewhere.
6. In connection with the FFCTO, on July 8, 2025, the Common Shares were suspended from trading on the CSE.
7. The FFCTO was issued as a result of the Issuer's failure to file the following continuous disclosure documents as required by Ontario securities law:
(i) audited annual financial statements for the year ended February 28, 2025, as required by National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102),
(ii) management's discussion and analysis (MD&A) relating to the audited annual financial statements for the year ended February 28, 2025, as required by NI 51-102, and
(iii) certification of the foregoing filings, as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109)
(collectively, the Required Documents).
8. Subsequent to the failure to file the Required Documents, the Issuer also failed to file the following documents:
(i) interim unaudited financial statements for the interim period ended May 31, 2025, as required by NI 51-102,
(ii) MD&A relating to the financial statements for the interim period ended May 31, 2025, as required by NI 51-102, and
(iii) certification of the foregoing filings, as required by NI 52-109
(together with the Required Documents, the Required Continuous Disclosure).
9. The Issuer is seeking a partial revocation of the FFCTO in order to permit it to conduct a private placement offering of up to 232,860,667 Common Shares at C$0.015 each (based on the last previous closing price while the Issuer was still actively trading) for a total of C$3,492,910 (USD$2,531,224) (the Offering).
10. The Offering will be conducted on a prospectus exempt basis with investors resident in Canada in reliance on, and in accordance with the accredited investor exemption in section 73.3 of the Securities Act (Ontario) or section 2.3 of National Instrument 45-106 Prospectus Exemptions, as applicable.
11. The Offering will be completed in accordance with all applicable laws.
12. Other than the failure to file the Required Continuous Disclosure and pay any related filing fees, participation fees and late fees, the Issuer is not in default of any of the requirements of applicable securities legislation in any jurisdiction of Canada. The Issuer is not in default of the FFCTO. The Issuer's SEDAR+ and SEDI profiles are up to date.
13. The Issuer is seeking a partial revocation of the FFCTO to conduct the Offering in order to obtain sufficient funds to prepare and file the Required Continuous Disclosure and provide it with sufficient working capital to fund the expenses as outlined below in order to continue its operations, until it can subsequently apply for a full revocation of the FFCTO.
14. The Issuer intends to allocate the proceeds from the Offering as follows:
Description |
Estimated Amounts (CA$) |
|
|
Legal Fees, including costs associated with applying for a full revocation order of the FFCTO |
$50,000 |
|
|
Accounting and Audit Fees, including costs associated with preparing and filing the Required Continuous Disclosure |
$180,000 |
|
|
Regulatory, Late Filing and Participation Fees |
$45,000 |
|
|
Transfer Agent and Registrar Fees |
$30,000 |
|
|
Democratic Republic of Congo (DRC) Immediate Contingencies |
$3,187,910 |
|
|
Total |
$3,492,910 |
15. Subsequent to this partial revocation order being granted and within a reasonable time following the completion of the Offering, the Issuer intends to apply for and obtain a full revocation of the FFCTO by filing the Required Continuous Disclosure, paying all outstanding fees and correcting any other continuous disclosure deficiencies that may subsequently arise.
16. The Issuer has provided an undertaking to the Principal Regulator to file the Required Continuous Disclosure and to pay all outstanding fees within ninety (90) days following the completion of the Offering.
17. As the Offering would involve a trade of securities, the Offering cannot be completed without the partial revocation of the FFCTO.
18. The Issuer reasonably expects that the proceeds raised in the Offering will be sufficient to bring its continuous disclosure obligations up to date and to apply for a full revocation of the FFCTO and pay all outstanding related fees.
19. Upon issuance of this partial revocation order, the Issuer will issue a press release announcing this partial revocation order and the intention to complete the Offering. Upon completion of the Offering, the Issuer will issue a press release and file a material change report. As other material events transpire, the Issuer will issue appropriate press releases and file material change reports as applicable.
20. Since the issuance of the FFCTO, there have not been any material changes in the business, operations or affairs of the Issuer that have not been disclosed to the public.
21. The Principal Regulator is satisfied that a partial revocation order of the FFCTO meets the test set out in the Legislation for the Principal Regulator to make the decision.
22. The decision of the Principal Regulator under the Legislation is that the FFCTO is partially revoked solely to permit the trades in securities of the Issuer (including for greater certainty, acts in furtherance of trades in securities of the Issuer) that are necessary for and are in connection with the Offering, provided that:
(a) prior to completion of the Offering, the Issuer will:
(i) provide to each participant in the Offering (a Participant) a copy of the FFCTO,
(ii) provide to each Participant a copy of this partial revocation order, and
(iii) obtain from each Participant a signed and dated acknowledgement, which clearly states that all of the Issuer's securities, including the securities issued in connection with the Offering, will remain subject to the FFCTO until a full revocation order is granted and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future;
(b) the Issuer will make available a copy of the written acknowledgements referred to in paragraph 22(a)(iii) above to staff of the Principal Regulator on request;
(c) this partial revocation order only varies the FFCTO and does not provide an exemption from the prospectus requirement; and
(d) this partial revocation order will terminate on the earlier of:
(i) the completion of the Offering, and
(ii) 60 days from the date hereof.
DATED at Toronto, Ontario on this 19th day of September, 2025.
OSC File #: 2025/0540
Multilateral Instrument 11-102 Passport System and National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Securities Act s. 88 Cease to be a reporting issuer in BC -- The securities of the issuer are beneficially owned by not more than 50 persons and are not traded through any exchange or market -- The issuer is not an OTC reporting issuer; the securities of the issuer are beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders worldwide; no securities of the issuer are traded on a market in Canada or another country; the issuer is not in default of securities legislation except it has not filed certain continuous disclosure documents.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.B.C. 1996, c. 418, s. 88.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
2025 BCSECCOM 420
September 19, 2025
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application,
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta and Saskatchewan, and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
¶ 2 Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
¶ 3 This order is based on the following facts represented by the Filer:
1. the Filer is a reporting issuer under the laws of British Columbia, Ontario, Alberta and Saskatchewan;
2. the Filer is incorporated under, and is governed by, the Business Corporations Act (British Columbia) (the BCBA);
3. the Filer's head office is in Vancouver, British Columbia;
4. pursuant to a statutory plan of arrangement under Division 5 of Part 9 of the BCBA, effective July 9, 2025, Triple Flag Precious Metals Corp. (the Purchaser) beneficially acquired all of the issued and outstanding common shares of the Filer (the Filer Shares), all upon the terms and conditions of the arrangement agreement dated April 21, 2025 between the Filer and the Purchaser (the Arrangement);
5. immediately upon the completion of the Arrangement, the Filer became a wholly-owned subsidiary of the Purchaser;
6. the Filer Shares have been delisted from the TSX Venture Exchange effective as of the close of business on July 10, 2025;
7. the Filer has no intention to seek public financing by way of an offering of securities;
8. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
9. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
10. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
11. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer;
12. the Filer is not in default of securities legislation in any jurisdiction other than its obligation to file on or before August 29, 2025 its interim financial statements and related management's discussion and analysis for the six month period ended June 30, 2025, as required under National Instrument 51-102 Continuous Disclosure Obligations and the related certificates as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Filings);
13. the requirements to file the Filings did not arise until after completion of the Arrangement;
14. the Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) as it is in default for failure to file the Filings; and
15. but for the fact that the Filer failed to file the Filings, the Filer would be eligible for the simplified procedure under NP 11-206.
¶ 4 Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2025/0519
Multilateral Instrument 11-102 Passport System and National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Securities Act s. 88 Cease to be a reporting issuer in BC -- The securities of the issuer are beneficially owned by not more than 50 persons and are not traded through any exchange or market -- The issuer is not an OTC reporting issuer; the securities of the issuer are beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders worldwide; no securities of the issuer are traded on a market in Canada or another country; the issuer is not in default of securities legislation except it has not filed certain continuous disclosure documents.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.B.C. 1996, c. 418, s. 88.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
2025 BCSECCOM 419
September 19, 2025
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) theBritish Columbia Securities Commission is the principal regulator for this application,
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102Passport System (MI 11-102) is intended to be relied upon in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Saskatchewan,and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
¶ 2 Terms defined in National Instrument 14-101Definitions, and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
¶ 3 This order is based on the following facts represented by the Filer:
1. the Filer is a reporting issuer under the laws of British Columbia, Ontario, Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Saskatchewan;
2. the Filer was incorporated under, and is governed by, the Business Corporations Act (British Columbia);
3. the Filer's head office is located in Vancouver, British Columbia; pursuant to a plan of arrangement under the Business Corporations Act (British Columbia), Torex Gold Resources Inc. (Torex) acquired all of the issued and outstanding common shares of the Filer (the Filer Shares), all in accordance with the terms of the arrangement agreement dated June 22, 2025 between the Filer and Torex (the Arrangement);
4. on August 11, 2025, at the special meeting of securityholders of the Filer (the Meeting), the securityholders of the Filer approved the Arrangement by (i) 96.068% of the votes cast by shareholders of the Filer present in person or represented by proxy at the Meeting, (ii) 97.067% of the votes cast by shareholders and the holders of warrants, options and restricted share units present in person or represented by proxy at the Meeting, and (iii) 95.133% of the Shareholders present in person or represented by proxy at the Meeting, excluding, for this purpose, votes attached to shares held by persons whose votes are required to be excluded in accordance with Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions;
5. pursuant to the Arrangement which was completed on August 20, 2025, Torex acquired all of the issued and outstanding common shares of the Filer, and all warrants, options and restricted share units of the Filer were transferred to the Filer and immediately cancelled in accordance with the terms of the Arrangement;
6. immediately upon completion of the Arrangement, the Filer became a wholly-owned subsidiary of Torex;
7. the Filer Shares have been delisted from the TSX Venture Exchange and the OTCQB effective as of the close of trading on August 21, 2025;
8. the Filer has no intention to seek public financing by way of an offering of securities;
9. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
10. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
11. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
12. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer;
13. the Filer is not in default of securities legislation in any jurisdiction other than its obligation to file on or before August 29, 2025 its interim financial statements and related management's discussion and analysis for the interim period ended June 30, 2025, as required under National Instrument 51-102 Continuous Disclosure Obligations and the related certificates as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Filings);
14. the requirements to file the Filings did not arise until after the completion of the Arrangement; and
15. the Filer is not eligible to use the simplified procedure under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications (NP 11-206) as it is in default for failure to file the Filings; and
16. except for the fact that the Filer failed to file the Filings, the Filer would be eligible for the simplified procedure under NP 11-206.
¶ 4 Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2025/0514
National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- Section 144 of the Securities Act (Ontario) -- application for a partial revocation of a cease trade order -- issuer cease traded due to failure to file audited annual financial statements, annual MD&A and certification of annual filings -- issuer has applied for a partial revocation of the cease trade order to permit the issuer to proceed with a private placement under prospectus exemptions -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents and pay related fees -- partial revocation granted solely to allow the issuer to complete the private placement transaction.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127, 144.
Citation: Re Bluewater Acquisition Corp., 2025 ABASC 125
September 23, 2025
1. Bluewater Acquisition Corp. (the Issuer) is subject to a failure-to-file cease trade order (the FFCTO) issued by the regulator or securities regulatory authority in each of Alberta (the Principal Regulator) and Ontario (each a Decision Maker) respectively on October 24, 2022.
2. The Issuer has applied to each of the Decision Makers for a partial revocation order of the FFCTO.
3. This order is the order of the Principal Regulator and evidences the decision of the Decision Maker in Ontario.
4. Terms defined in National Instrument 14-101 Definitions or in National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions have the same meaning if used in this order, unless otherwise defined.
5. This decision is based on the following facts represented by the Issuer:
(a) The Issuer was incorporated pursuant to the Canada Business Corporations Act on March 9, 2018.
(b) The Issuer's head office is located in Alberta.
(c) The Issuer is a reporting issuer in British Columbia, Alberta and Ontario.
(d) The Issuer has an authorized share capital of an unlimited number of common shares (the Common Shares) and an unlimited number of preferred shares, of which 7,716,500 Common Shares are issued and outstanding.
(e) The Issuer's Common Shares are listed for trading on the TSX Venture Exchange (the TSXV).
(f) On October 24, 2022, the Decision Makers issued the FFCTO in response to the Issuer's failure to file its annual audited financial statements, annual management's discussion and analysis and certification of the annual filings for the year ended May 31, 2022 (the Required Filings).
(g) The Issuer has been unable to file the Required Filings due to financial hardship caused by utilizing its cash reserves on the identification and evaluation of assets and businesses with a view to completing a Qualifying Transaction.
(h) The TSXV suspended trading in the Issuer's Common Shares on October 25, 2022.
(i) Aside from its failure to file the Required Filings and subsequent periodic disclosure, the Issuer is not otherwise in default of securities legislation in Alberta or Ontario and the Issuer's SEDAR+ and SEDI profiles are up to date.
(j) The Issuer has no outstanding convertible or debt securities.
(k) The Issuer seeks to vary the FFCTO to permit the Issuer to, on a private placement basis under the accredited investor exemption in section 2.3 of National Instrument 45-106 Prospectus Exemptions, convert debt to equity and issue units at a price of $0.03 per unit, each unit being composed of one (1) Common Share and one (1) common share purchase warrant (Warrant) at an exercise price of $0.03 per Common Share (each, a Unit), for aggregate maximum proceeds of $570,000 (the Proposed Transaction). The terms of the Warrants will prohibit the exercise of the Warrants while the FFCTO remains in effect.
(l) The Issuer reasonably expects the proceeds from the Proposed Transaction will be used in a manner consistent with the below table:
Legal and filing fees associated with preparation of continuous disclosure documents, Proposed transaction materials and applications for partial and full revocation of CTO and reinstatement or listing on an Exchange:
$151,036.51
Accounting and auditing fees associated with preparation of continuous disclosure documents:
$ 66,383.75
Legacy accounts payable, including accounting and legal fees, consulting fees and outstanding transfer agent fees:
$ 352,579.74
Total
$ 570,000
(m) The Issuer reasonably expects that the proceeds raised from the Proposed Transaction will be sufficient to bring its continuous disclosure up to date, to pay all outstanding fees and penalties, and to apply for a full revocation of the FFCTO.
(n) Within a reasonable amount of time following the completion of the Proposed Transaction, the Issuer intends to apply to each of the Decision Makers for a full revocation of the FFCTO.
(o) The Issuer hereby undertakes to provide to each participant in the Proposed Transaction:
(i) a copy of the FFCTO;
(ii) a copy of this partial revocation order; and
(iii) written notice from the Issuer, to be acknowledged by each participant in writing, that all of the Issuer's securities, including the securities issued to such participant in connection with the Proposed Transaction and the Common Shares issuable upon exercise of the Warrants, will remain subject to the FFCTO until such time as a full revocation order is granted, the issuance of which is not certain.
(p) Under the Proposed Transaction, the Issuer intends to: i) approve the assignment of certain of the Issuer's debt from existing creditors to a new investment group; ii) convert the assigned debt and other existing debt to Units by private placement of up to 19,000,000 Common Shares to be issued and a further 19,000,000 reserved for issuance for the exercise of the Warrants, at a conversion price of $0.03 per Unit.
(q) To the Issuer's knowledge, no participant in the Proposed Transaction is an insider or a related party (as such term is defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions) of the Issuer.
(r) The Issuer hereby undertakes to provide upon request to the Principal Regulator signed and dated written acknowledgements referred to in paragraph 3(o) above.
(s) The conversion price and the purchase price of $0.03 per Unit was determined based on the last quoted trading price of the Issuer's shares on the TSXV prior to the TSXV's suspension of trading of the Issuer's Common Shares on October 25, 2022. The board of directors of the Issuer has determined that this price represents a fair value of the Issuer's Units.
6. Each of the Decision Makers is satisfied that a partial revocation order of the FFCTO meets the test set out in the Legislation for the Decision Maker to make the decision.
7. The decision of the Decision Makers under the Legislation is that the FFCTO is partially revoked solely to permit the Proposed Transaction.
23 September 2025
OSC File #: 2025/0632
ROCKLINC Investment Partners Inc.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from requirement in section 59 of the Securities Act (Ontario) to include an underwriter's certificate in a prospectus of an exchange-traded securities of mutual fund -- relief from take-over bid requirements of NI 62-104 in respect of normal-course purchases of securities of an exchange-traded securities of mutual fund.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 59(1) and 147.
National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.
September 23, 2025
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of Rocklinc Principled Equity ETF (the Proposed ETF) and any additional exchange-traded mutual funds (the Future ETFs, and together with the Proposed ETF, the ETFs, and each an ETF) established in the future for which the Filer is the manager, for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that exempts:
(a) the Filer and each ETF from the requirement in subsection 5.9(1) of National Instrument 41-101 General Prospectus Requirements (NI 41-101) and subsection 59(1) of the Securities Act (Ontario) to include a certificate of an underwriter in an ETF's prospectus (the Underwriter's Certificate Requirement); and
(b) a person or company purchasing ETF Securities (as defined below) in the normal course through the facilities of the TSX (as defined below) or another Marketplace (as defined below) from the Take-Over Bid Requirements (as defined below)
(collectively, the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Funds in each of the other provinces and territories of Canada (together with Ontario, the Canadian Jurisdictions).
Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 81-102 have the same meaning if used in this application, unless otherwise defined. Additionally, the following terms have the following meanings:
Affiliate Dealer means a registered dealer that is an affiliate of an Authorized Dealer or Designated Broker and that participates in the re-sale of Creation Units (as defined below) from time to time.
Authorized Dealer means a registered dealer that has entered, or intends to enter, into an agreement with the manager of an ETF authorizing the dealer to subscribe for, purchase and redeem Creation Units from one or more ETFs on a continuous basis from time to time.
Basket of Securities means, in relation to the ETF Securities of an ETF, a group of securities or assets representing the constituents of the ETF.
Designated Broker means a registered dealer that has entered, or intends to enter, into an agreement with the manager of an ETF to perform certain duties in relation to the ETF, including the posting of a liquid two-way market for the trading of the ETF Securities on the TSX or another Marketplace.
ETF Facts means a prescribed summary disclosure document required in respect of one or more classes or series of ETF Securities being distributed under a prospectus.
ETF Security means a listed security of an ETF.
Marketplace means a "marketplace" as defined in National Instrument 21-101 Marketplace Operations that is located in Canada.
NI 81-102 means National Instrument 81-102 Investment Funds.
Other Dealer means a registered dealer that is not an Authorized Dealer, Designated Broker or Affiliate Dealer.
Prescribed Number of ETF Securities means the number of ETF Securities determined by the Filer from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.
Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the Legislation applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.
Securityholders means beneficial or registered holders of ETF Securities.
Take-Over Bid Requirements means the requirements of National Instrument 62-104 Take-Over Bids and Issuer Bids relating to take-over bids, including the requirement to file a report of a take-over bid and to pay the accompanying fee, in each Jurisdiction.
TSX means the Toronto Stock Exchange.
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation incorporated under the laws of the Province of Ontario, with its head office located in Burlington, Ontario.
2. The Filer is registered as: (i) a portfolio manager and exempt market dealer in each of the Provinces of Canada; and (ii) an investment fund manager in Newfoundland and Labrador, Ontario and Québec.
3. The Filer is, or will be, the investment fund manager of the ETFs. The Filer has applied, or will apply, to list the ETF Securities on the TSX or another Marketplace.
4. The Filer is not in default of securities legislation in any of the Jurisdictions.
The ETFs
5. The Proposed ETF will be a mutual fund structured as a trust that is governed by the laws of the Province of Ontario. The Future ETFs will be either trusts or corporations or classes thereof governed by the laws of a Jurisdiction. Each ETF will be a reporting issuer in the Jurisdiction(s) in which its securities are distributed.
6. Subject to any exemptions that have been, or may be, granted by the applicable securities regulatory authorities, each ETF will be an open-ended mutual fund subject to NI 81-102 and Securityholders of each ETF will have the right to vote at a meeting of Securityholders in respect of matters prescribed by NI 81-102.
7. On August 27, 2025, the Filer filed a preliminary long form prospectus in respect of the Proposed ETF with the securities regulatory authorities in each of the Jurisdictions. A receipt for the preliminary prospectus was issued on September 2, 2025.
8. The ETF Securities will be (subject to satisfying the listing requirements of the applicable exchange) listed on the TSX or another Marketplace.
9. The Filer has applied to list the ETF Securities of the Proposed ETF on the TSX. The Filer will not file a final long form prospectus for an ETF until the TSX or another applicable Marketplace has conditionally approved the listing of the ETF Securities.
10. The Filer will file a final long form prospectus prepared and filed in accordance with NI 41-101, subject to any exemptions that may be granted by the applicable securities regulatory authorities.
11. ETF Securities will be distributed on a continuous basis in one or more of the Jurisdictions under a prospectus. ETF Securities may generally only be subscribed for or purchased directly from the ETFs (Creation Units) by Authorized Dealers or Designated Brokers. Generally, subscriptions or purchases may only be placed for a Prescribed Number of ETF Securities (or a multiple thereof) on any day when there is a trading session on the TSX or other Marketplace. Authorized Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of ETF Securities on the TSX or another Marketplace.
12. In addition to subscribing for and re-selling Creation Units, Authorized Dealers, Designated Brokers and Affiliate Dealers will also generally be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market. Other Dealers may also be engaged in purchasing and selling ETF Securities of the same class or series as the Creation Units in the secondary market despite not being an Authorized Dealer, Designated Broker or Affiliate Dealer.
13. Each Designated Broker or Authorized Dealer that subscribes for Creation Units must deliver, in respect of each Prescribed Number of ETF Securities to be issued, a Basket of Securities and/or cash in an amount sufficient so that the value of the Basket of Securities and/or cash delivered is equal to the net asset value of the ETF Securities subscribed for next determined following the receipt of the subscription order. In the discretion of the Filer, the ETFs may also accept subscriptions for Creation Units in cash only, in securities other than Baskets of Securities and/or in a combination of cash and securities other than Baskets of Securities, in an amount equal to the net asset value of the ETF Securities subscribed for next determined following the receipt of the subscription order.
14. Upon notice given by the Filer from time to time and, in any event, not more than once quarterly, a Designated Broker may be contractually required to subscribe for Creation Units of an ETF for cash in an amount not to exceed a specified percentage of the net asset value of the ETF or such other amount established by the Filer.
15. Designated Brokers and Authorized Dealers will not receive any fees or commissions in connection with the issuance of Creation Units to them. On the issuance of Creation Units, the Filer or an ETF may, in the Filer's discretion, charge a fee to a Designated Broker or an Authorized Dealer to offset the expenses incurred in issuing the Creation Units.
16. Each ETF will appoint, at any given time, a Designated Broker to perform certain other functions, which include standing in the market with a bid and ask price for ETF Securities for the purpose of maintaining liquidity for the ETF Securities.
17. Except for Authorized Dealer and Designated Broker subscriptions for Creation Units, as described above, and other distributions that are exempt from the Prospectus Delivery Requirement under the Legislation, ETF Securities generally will not be able to be purchased directly from an ETF. Investors are generally expected to purchase and sell ETF Securities, directly or indirectly, through dealers executing trades through the facilities of the TSX or another Marketplace. ETF Securities may also be issued directly to Securityholders upon a reinvestment of distributions of income or capital gains.
18. Securityholders that are not Designated Brokers or Authorized Dealers that wish to dispose of their ETF Securities may generally do so by selling their ETF Securities on the TSX or other Marketplace, through a registered dealer, subject only to customary brokerage commissions. A Securityholder that holds a Prescribed Number of ETF Securities or multiple thereof may exchange such ETF Securities for Baskets of Securities and/or cash in the discretion of the Filer. Securityholders may also redeem ETF Securities for cash at a redemption price equal to 95% of the closing price of the ETF Securities on the TSX or other Marketplace on the date of redemption, subject to a maximum redemption price of the applicable net asset value per ETF Security.
Underwriter's Certificate Requirement
19. Authorized Dealers and Designated Brokers will not provide the same services in connection with a distribution of Creation Units as would typically be provided by an underwriter in a conventional underwriting.
20. The Filer will generally conduct its own marketing, advertising and promotion of the ETFs.
21. The Authorized Dealers and Designated Brokers will not be involved in the preparation of an ETF's prospectus, will not perform any review or any independent due diligence as to the content of an ETF's prospectus, and will not incur any marketing costs or receive any underwriting fees or commissions from the ETFs or the Filer in connection with the distribution of ETF Securities. The Authorized Dealers and Designated Brokers generally seek to profit from their ability to create and redeem ETF Securities by engaging in arbitrage trading to capture spreads between the trading prices of ETF Securities and their underlying securities and by making markets for their clients to facilitate client trading in ETF Securities.
22. In addition, neither the Filer nor the ETFs will pay any fees or commissions to the Designated Brokers and Authorized Dealers. As the Designated Brokers and Authorized Dealers will not receive any remuneration in connection with distributing ETF Securities and as the Authorized Dealers will change from time to time, it is not practical to provide an underwriter's certificate in the prospectus of the ETFs.
Take-Over Bid Requirements
23. As equity securities that will trade on the TSX or another Marketplace, it is possible for a person or company to acquire such number of ETF Securities so as to trigger the application of the Take-Over Bid Requirements. However:
(a) it will be difficult for one or more Securityholders to exercise control or direction over an ETF, as the constating documents of each ETF will provide that there can be no changes made to such ETF which do not have the support of the Filer;
(b) it will be difficult for the purchasers of ETF Securities to monitor compliance with the Take-Over Bid Requirements because the number of outstanding ETF Securities will always be in flux as a result of the ongoing issuance and redemption of ETF Securities by each ETF; and
(c) the way in which the ETF Securities will be priced deters anyone from either seeking to acquire control or offering to pay a control premium for outstanding ETF Securities because pricing for each ETF Security will generally reflect the net asset value of the ETF Securities.
24. The application of the Take-Over Bid Requirements to the ETFs would have an adverse impact on the liquidity of the ETF Securities because they could cause the Designated Brokers and other large Securityholders to cease trading ETF Securities once the Securityholder has reached the prescribed threshold at which the Take-Over Bid Requirements would apply. This, in turn, could serve to provide conventional mutual funds with a competitive advantage over the ETFs.
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 is that the Exemption Sought is granted.
Application File #: 2025/0518
SEDAR+ File #: 6328771
Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from the requirement to call a meeting of shareholders to consider proposed related party transactions and to send an information circular to such shareholders -- issuer will be purchasing assets from, and issuing securities to, a related party rendering the transactions related party transactions subject to the minority approval requirements of MI 61-101 -- issuer has received written confirmation from shareholders holding a majority of the shares eligible to be counted in determining minority approval under Part 8 of MI 61-101 that they intend to consent to the proposed transactions -- issuer disclosed the details of the proposed related party transaction in a disclosure document containing the information required by section 5.3 of MI 61-101 that was filed on SEDAR+ and provided to each shareholder from whom consent is being sought -- exemption sought granted, subject to conditions, including that no executed consents are obtained by the issuer until at least 14 days have passed from the date the relevant consenting shareholders were provided with the disclosure document and form of written consent, and the issuer does not close the transactions unless and until (i) the consenting shareholders have had at least 14 days to review the disclosure document and form of written consent, and (ii) at least 14 days have elapsed from the date that the disclosure document and form of written consent were filed on SEDAR+.
Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, ss. 5.3, 5.6, 8.1 and 9.1(2). Companion Policy 61-101CP to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, s. 3.1.
September 25, 2025
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") exempting the Filer from the requirement in subsection 5.3(2) of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") to call a meeting of holders of Common Shares (as defined below) to consider the Proposed Transactions (as defined below) and to send an information circular to holders of Common Shares (the "Exemption Sought").
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) 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 Alberta, Manitoba, and New Brunswick.
Terms defined in National Instrument 14-101 Definitions, MI 11-102, and MI 61-101 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 company existing under the laws of British Columbia. The head and registered office of the Filer is located at 1910 -- 925 West Georgia St., Vancouver, British Columbia V6C 3L2.
2. The Filer is currently a reporting issuer in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Nunavut, Northwest Territories, and Yukon (the "Reporting Jurisdictions"). The Filer is not in default of any requirement of securities legislation in any of the Reporting Jurisdictions.
3. The Filer's authorized capital consists of an unlimited number of common shares in the capital of the Filer (the "Common Shares"), of which 34,448,995 Common Shares are issued and outstanding as of the date hereof. Each Common Share carries the right to one vote at all meetings of shareholders of the Filer.
4. The Common Shares are listed on the TSX Venture Exchange ("TSXV") under the symbol "STA".
5. The Filer, LIRECA Resources Inc. ("LIRECA"), and Florin Resources Inc. ("Florin" and, together with LIRECA, the "Vendors") entered into a Quartz Claim (Yukon) and Mining Claim (Quebec) Purchase Agreement dated July 1, 2025 (the "Purchase Agreement"), whereby the Filer will purchase from the Vendors the Gold Strike One Project located in Yukon (the "Gold Strike One Project") and the Abitibi Property located in Québec (the "Abitibi Property") for consideration consisting of an aggregate cash payment in the amount of $2,000,000 (the "Cash Consideration") and the issuance to LIRECA of 24,745,620 Common Shares, plus any bonus payment payable by the Filer to the Vendors upon the occurrence of certain triggering events associated with public resource estimates of the Gold Strike One Project or Abitibi Property (the "Proposed Acquisition").
6. As a condition to closing the Proposed Acquisition, the Filer will enter into certain royalty agreements (the "Royalty Agreements") with 1079170 B.C. Ltd. (the "Royalty Holder"), an affiliate of the Vendors, pursuant to which the Filer will grant certain royalties to the Royalty Holder (together with the Proposed Acquisition, the "Proposed Transactions").
7. Pursuant to the terms of the Purchase Agreement, completion of the Proposed Transactions is subject to certain conditions, including receipt of Minority Approval (as defined herein).
8. Concurrent with the Proposed Transactions, the Filer intends to complete a non-brokered private placement (the "Private Placement Offering") for maximum gross proceeds of up to $5,280,000 from the sale of up to 8,800,000 units of the Filer (each, a "Unit") at a price of $0.60 per Unit. The minimum gross proceeds to be raised pursuant to the Private Placement Offering is $4,300,000, representing a sale of at least 7,166,667 Units. Each Unit will be comprised of one Common Share and one-half of one Common Share purchase warrant (each whole warrant, a "Warrant"). The Units offered pursuant to the Private Placement Offering will be distributed in reliance on the accredited investor exemption from the prospectus requirement in subsection 2.3(1) of National Instrument 45-106 Prospectus Exemptions and/or subsection 73.3(2) of the Securities Act (Ontario) or other available exemptions from the prospectus requirement. The Private Placement Offering is subject to an over-allotment right (the "Over-allotment") pursuant to which the Filer can issue up to 1,320,000 additional Units such that the aggregate gross proceeds from the Private Placement Offering would be up to $6,072,000.
9. No "related party" of the Filer (as defined in MI 61-101) will participate in the Private Placement Offering; therefore, the Private Placement Offering does not constitute a "related party transaction" under MI 61-101.
10. The Filer negotiated the Proposed Transactions after completion of the acquisition by the Filer of the Gold Strike Two Project located in Yukon (the "Gold Strike Two Project") from LIRECA on June 4, 2025, pursuant to a quartz claim purchase agreement entered into between Sanatana and LIRECA on May 5, 2025 (the "Gold Strike Two Agreement"). Specifically, the Filer and Mr. John Fiorino, principal of LIRECA and Florin, had publicly stated their intention to engage in further discussions regarding additional mineral property acquisitions amongst the parties. Under the oversight of the Filer's board of directors (the "Board"), Mr. Peter Miles, Chief Executive Officer and a director of the Filer, led the negotiations of the Proposed Transactions on behalf of the Filer, beginning around June 6, 2025 and leading up to the finalization of the terms and entry into the Purchase Agreement by the parties on July 1, 2025. Mr. Miles is not an "interested party" (as defined in MI 61-101) in respect of the Proposed Transactions.
11. At a Board meeting on June 25, 2025, the directors of the Filer met to discuss the economic terms of the Proposed Transactions and subsequently unanimously approved the Proposed Transactions by consent resolutions dated July 2, 2025, which ratified, confirmed, and approved the Purchase Agreement. In making its decision to approve the Proposed Transactions, amongst other items, the following factors were considered by the Board: (a) the Proposed Acquisition would materially increase the Filer's presence in the Rogue Plutonic Complex (Yukon), which provides the Filer with better opportunities to pursue an expanded exploration program in Yukon, while potentially realizing cost efficiencies for any exploration activities being conducted on the Gold Strike One Project and the Gold Strike Two Project; (b) the Cash Consideration would be funded through the Private Placement Offering, thereby not unduly straining the Filer's working capital or abilities to pursue planned exploration activities on the newly acquired properties; and (c) the implications of LIRECA becoming a "Control Person" (as such term is defined under the policies of the TSXV) and the value that John Fiorino, as principal of LIRECA, could bring to the Filer as a significant shareholder given his experience with mining activities in Yukon.
12. Pursuant to the Gold Strike Two Agreement, LIRECA was granted the right, but not the obligation, to nominate one director to the Board. As of the date the Purchase Agreement was entered into, LIRECA had not exercised such Board nomination right. As such, the Board consists of four directors, each of whom is independent in connection with the Proposed Transactions and the Private Placement Offering within the meaning of Part 7 of MI 61-101. Therefore, the Board did not deem it necessary to establish a special committee of independent directors to evaluate the Proposed Transactions and the Private Placement Offering.
13. The Filer's intention to complete the Proposed Transactions and Private Placement Offering was first announced on July 3, 2025. Following the execution of the Purchase Agreement on July 1, 2025, the material terms of the Proposed Transactions and the Private Placement Offering were initially described in a press release dated July 3, 2025 and then updated in a press release dated July 22, 2025 and in a material change report dated July 11, 2025 (the "MCR"). The MCR contains all additional information required by section 5.2 of MI 61-101.
14. LIRECA and its joint actors currently have beneficial ownership of, and control or direction over, 6,490,379 Common Shares and 295,000 Warrants exercisable at $0.12, representing approximately 18.84% of the issued and outstanding Common Shares on a non-diluted basis and approximately 19.53% on a partially-diluted basis.
15. Upon completion of the Proposed Transactions, LIRECA and its joint actors will have beneficial ownership of, and control or direction over, 31,235,999 Common Shares and 295,000 Warrants, representing: (a) in the event that the Private Placement Offering is fully subscribed and the Over-allotment is exercised in full, approximately 45.06% of the issued and outstanding Common Shares on a non-diluted basis and approximately 45.32% on a partially-diluted basis; and (b) in the event the minimum proceeds are raised from the Private Placement Offering, approximately 47.07% of the issued and outstanding Common Shares on a non-diluted basis and approximately 47.33% on a partially-diluted basis.
16. LIRECA is a "related party" of the Filer as it has beneficial ownership of, or control or direction over, directly or indirectly, securities of the Filer carrying more than 10% of the voting rights attached to all of the Filer's outstanding voting securities. Each of Florin and the Royalty Holder is a related party of the Filer as each is an affiliated entity of LIRECA.
17. Since each of LIRECA, Florin, and the Royalty Holder is a related party of the Filer, the Proposed Transactions constitute related party transactions pursuant to paragraphs (a) and (g) of the definition of "related party transaction" in MI 61-101 and, consequently, MI 61-101 requires that the Filer obtain a formal valuation for, and minority approval of, the Proposed Transactions, in the absence of exemptions therefrom.
18. The Proposed Transactions are exempt from the requirement to obtain a formal valuation set out in section 5.4 of MI 61-101 pursuant to paragraph 5.5(b) of MI 61-101 on the basis that no securities of the Filer are listed or quoted on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc.
19. The Proposed Transactions are subject to the minority approval requirements of section 5.6 of MI 61-101 and, accordingly, the Filer is required by section 5.6 of MI 61-101 to obtain "minority approval" (as defined in MI 61-101) of the Proposed Transactions in accordance with Part 8 of MI 61-101 (the "Minority Approval").
20. In addition to the Minority Approval, the Proposed Transactions will also require the approval of disinterested holders of Common Shares pursuant to Policy 5.2 Changes of Business and Reverse Takeovers of the TSXV Corporate Finance Manual ("Policy 5.2") on the basis that the Proposed Transactions constitute a "Reverse Takeover" (as defined in Policy 5.2). Policy 5.2 provides that such disinterested approval can be obtained by written consent, subject to obtaining the Exemption Sought and the Filer providing shareholders with a final filing statement prior to obtaining their written consent. The Filer filed a filing statement dated September 23, 2025 on SEDAR+ pertaining to the Proposed Transactions, the contents of which satisfy and comply with the requirements of Policy 5.2.
21. Subsection 5.3(2) of MI 61-101 requires that an issuer proposing to carry out a related party transaction for which minority approval is required: (a) call a meeting of holders of affected securities (as defined in MI 61-101); and (b) send an information circular to those holders.
22. As at the date hereof, 27,958,617 Common Shares, or approximately 81.16% of the issued and outstanding Common Shares, were held by shareholders that are eligible to vote for purposes of the Minority Approval required for the Proposed Transactions pursuant to subsection 8.1(2) of MI 61-101. Only the 6,490,379 Common Shares held by LIRECA and its joint actors (and any Common Shares issued to LIRECA or its joint actors upon exercise of their 295,000 Warrants) are required to be excluded for purposes of the Minority Approval.
23. The Filer has approached certain shareholders (each a "Consenting Party" and collectively, the "Consenting Parties") to request their support for the Proposed Transactions. The Filer has received written confirmation from the Consenting Parties who, as at July 15, 2025, collectively held 14,171,643 Common Shares, representing approximately 41.14% of the issued and outstanding Common Shares and approximately 50.69% of the Common Shares eligible to vote for purposes of the Minority Approval required for the Proposed Transactions, that they intend to consent to the Proposed Transactions, subject to their review and consideration of a disclosure document dated July 31, 2025 pertaining to the Proposed Transactions (the "Disclosure Document"), the contents of which satisfy and comply with the disclosure requirements set out in subsection 5.3(3) of MI 61-101. The consents will be evidenced through the execution of a form of written consent (the "Consent" and, together with the Disclosure Document, the "Transaction Documents") accompanying the Disclosure Document.
24. As the Filer believes that holders of a majority of the Common Shares eligible to be voted would vote in favour of the Proposed Transactions, the Filer wishes to obtain the Minority Approval by way of written consent as opposed to at a meeting of holders of Common Shares.
25. No Consenting Party is: (a) an "interested party" (as defined in MI 61-101) in respect of the Proposed Transactions; (b) a related party of an interested party in respect of the Proposed Transactions; or (c) a joint actor with a party referred to in (a) or (b) above in respect of the Proposed Transactions.
26. The Filer filed copies of the Transaction Documents on SEDAR+ on July 31, 2025.
27. Each Consenting Party has been provided with a copy of the Transaction Documents. The Transaction Documents set out the relevant details of the Proposed Transactions, and the Consent includes an acknowledgement from each Consenting Party that such Consenting Party has had a minimum of 14 days from the time that it received the Transaction Documents to review such documents.
28. None of the Consenting Parties is obligated to provide the Filer with an executed Consent, and each Consenting Party will make its determination on whether to provide the Filer with an executed Consent based on its review and consideration of the Transaction Documents.
29. No Consenting Party has received, or will receive, directly or indirectly, any payment, beneficial enhancement, collateral benefit, or inducement of any kind in respect of the Proposed Transaction, or in connection with agreeing to execute the Consent.
30. The Filer will not obtain executed Consents until at least 14 days have passed from the date the relevant Consenting Party received the Transaction Documents.
31. The Filer will not close the Proposed Transactions unless and until: (a) the Consenting Parties have had at least 14 days to review the Transaction Documents; and (b) at least 14 days have elapsed from the date that the Transaction Documents were filed on SEDAR+.
32. The Filer will send a copy of the Transaction Documents to any holder of Common Shares who requests a copy, free of charge.
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 provided that:
(a) the Filer receives executed copies of Consents from holders of Common Shares holding a majority of the Common Shares eligible to vote for the purposes of the Minority Approval required for the Proposed Transactions;
(b) the Filer does not obtain executed Consents until at least 14 days have passed from the date that the relevant Consenting Party was provided with the Transaction Documents;
(c) the Filer provides each Consenting Party with a copy of this decision;
(d) the Disclosure Document contains the information required pursuant to section 5.3 of MI 61-101, and also discloses that:
(i) the Filer has applied for the Exemption Sought,
(ii) the Filer intends to seek written consent from the Consenting Parties, and
(iii) if the Filer does not obtain executed Consents from holders of Common Shares holding a majority of the Common Shares eligible to vote for the purposes of the Minority Approval required for the Proposed Transactions, the Filer will call a meeting of holders of Common Shares to seek the Minority Approval and send an information circular to holders of Common Shares in accordance with MI 61-101 before proceeding with the Proposed Transactions;
(e) no Consenting Party has received, or will receive, directly or indirectly, any payment, beneficial enhancement, collateral benefit, or inducement of any kind in respect of the Proposed Transaction or in connection with agreeing to execute the Consent;
(f) the Filer does not close the Proposed Transactions unless and until: (i) the Consenting Parties have had at least 14 days to review the Transaction Documents, and (ii) at least 14 days have elapsed from the date that the Transaction Documents were filed on SEDAR+;
(g) the Filer sends a copy of the Transaction Documents to any holder of Common Shares who requests a copy, free of charge; and
(h) there are no other approvals required in respect of the Proposed Transactions which must be obtained at a meeting of holders of Common Shares.
JPMorgan Asset Management (Canada) Inc. and The Funds
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 81-102 Investment Funds -- National Instrument 41-101, Part 19 -- Underwriter's Certificate Relief -- Requirement under section 5.9 of NI 41-101 to include an underwriter's certificate in the ETF's prospectus -- The designated brokers and authorized dealers do not provide the same services in connection with a distribution of the ETF's securities as would typically be provided by an underwriter in a conventional underwriting, will not be involved in the preparation of the fund prospectus, will not perform any review or independent due diligence as to the content of the fund prospectus, and will not incur any marketing costs or receive any underwriting fees or commissions from the ETFs or the Filer in connection with the distribution of ETF securities.
National Instrument 62-104, Part 6 Take-Over Bids -- Exemption from the formal take-over bid requirements -- Take-over bid relief -- NI 62-104 for the purchases of listed securities of the ETFs in the normal course through the facilities of a marketplace in Canada -- It is not possible for one of more securityholders to exercise control or direction over the ETF, the number of outstanding ETF Securities will always be in flux as a result of the ongoing issuance and redemption of listed securities by each ETF, and there is no incentive to acquire control or offer to pay a control premium for outstanding ETF Securities because pricing for each ETF Security will generally reflect its net asset value.
An issuer wants relief from the investment restrictions contained in subsection 2.1(1) of National Instrument 81-102 Investment Funds prohibiting a mutual fund from investing more than 10% of the net assets of the fund, taken at market value at the time of the transaction, in securities of any one issuer -- The investment is in debt securities issued by a corporation or similar entity established by a government of a jurisdiction, the government of Canada, or the government of the United States; the debt securities have a rating from a designated ratings organization that is at least the same as debt securities with a similar term issued by the government that established the entity and is above a stated minimum rating threshold; the filer must take steps to appropriately liquidate the debt securities if it determines that proposed legislation poses a significant risk that the securities' rating falls below the relevant government security's rating.
An issuer wants relief from the investment restriction contained in subsection 2.1(1.1) of National Instrument 81-102 Investment Funds prohibiting an alternative mutual fund from investing more than 20% of the net assets of the fund, taken at market value at the time of the transaction, in securities of any one issuer -- The investment is in debt securities issued by a corporation or similar entity established by a government of a jurisdiction, the government of Canada, or the government of the United States; the debt securities have a rating from a designated ratings organization that is at least the same as debt securities with a similar term issued by the government that established the entity and is above a stated minimum rating threshold; the filer must take steps to appropriately liquidate the debt securities if it determines that proposed legislation poses a significant risk that the securities' rating falls below the relevant government security's rating.
An investment fund wants relief from the restriction in paragraph 2.5(2)(b) of NI 81-102 to permit the fund to purchase or hold securities in another investment fund where the other investment's fund's holdings in investment funds exceeds 10% of the other investment fund's NAV -- The relief applies to purchases and holdings by the other investment fund in securities of "money market funds" registered in the United States; the other investment fund and the money market fund must be in compliance with U.S. securities laws, including the money market fund complying with Rule 2a-7 of the U.S. Investment Company Act.
A mutual fund seeks relief from the restrictions in 2.5(2)(a) and (c) of NI 81-102 to permit the fund to invest up to its entire net asset value in a U.S ETF -- The mutual fund is the Canadian version of the underlying US ETF, the mutual fund is unlikely to achieve the same investment portfolio without investing in the underlying US ETF, the US ETF will comply with key provisions of U.S. securities law and NI 81-102, the portfolio managers for the mutual fund and underlying US ETF will have the appropriate registrations in Canada and the USA.
National Instrument 41-101 General Prospectus Requirements, ss. 5.9 and 19.1.
National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.
National Instrument 81-102 Investment Funds, ss. 2.1(1) and 2.1(1.1), 2.5(2)(a), 2.5(2)(b) and 2.5(2)(c), and 9.1.
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 59(1) and 147.
2025 BCSECCOM 418
September 17, 2025
¶ 1 The securities regulatory authority or regulator in each of the Jurisdictions has received an application from the Filer on behalf of JPMorgan US Bond Active ETF and a currency-hedged version thereof (together, Canadian JBND), JPMorgan US Core Plus Bond Active ETF and a currency-hedged version thereof (together, Canadian JCPB), JPMorgan US Income Active ETF and a currency-hedged version thereof (together, Canadian JPIE) and JPMorgan USD Ultra-Short Income Active ETF and a currency-hedged version thereof (together, Canadian JPST and together with Canadian JBND, Canadian JCPB, and Canadian JPIE, the Top Funds), each an exchange-traded mutual fund (ETF) subject to National Instrument 81-102 Investment Funds (NI 81-102) and such other ETFs as the Filer (for all purposes herein, Filer also shall include an affiliate or successor of the Filer, unless the context otherwise requires) may manage in the future (together with the Top Funds, the JPM ETFs and individually a JPM ETF) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) (I) revoking the relief dated September 11, 2024 (the Prior Relief) previously granted in the matter of JPMorgan Asset Management Canada Inc. (the Revocation) and (II) granting:
(a) an exemption for the Filer and each JPM ETF from the requirement to include a certificate of an underwriter in a JPM ETF's prospectus (the Underwriter's Certificate Requirement);
(b) an exemption for a person or company purchasing JPM ETF securities in the normal course through the facilities of a Marketplace (as defined below) from the Take Over Bid Requirements (as defined below);
(paragraphs (a) and (b) together, the JPM ETF Relief)
(c) an exemption for each JPM ETF that is a mutual fund, other than an alternative mutual fund, from subsection 2.1(1) of NI 81-102 to permit such JPM ETFs to purchase a security of an issuer, enter into a specified derivative transaction or purchase index participation units (each a Purchase) when, immediately after the Purchase, more than 10% of the net asset value (NAV) of the JPM ETF would be invested in debt obligations issued or guaranteed by either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac);
(d) an exemption for each JPM ETF that is an alternative mutual fund from subsection 2.1(1.1) of NI 81-102, in order to permit such JPM ETFs to make a Purchase when, immediately after the Purchase, more than 20% of the NAV of the JPM ETF would be invested in debt obligations issued or guaranteed by either Fannie Mae or Freddie Mac;
(paragraphs (c) and (d) together, the Fannie Mae and Freddie Mac Relief)
(e) an exemption for the Filer and the JPM ETFs from paragraph 2.5(2)(b) of NI 81-102 to permit the JPM ETFs to purchase and hold shares of one or more U.S. JPM ETFs (as defined below) that may hold more than 10% of its NAV in securities of U.S. Money Market Funds (as defined below);
(paragraph (e), the U.S. Money Market Fund Relief)
(f) an exemption for the Top Funds from subsection 2.1(1) of NI 81-102 to permit the Top Funds to purchase securities of the U.S. Underlying Funds (as defined below) even though, immediately after the transaction, more than 10% of each Top Fund's respective NAV would be invested in securities of the U.S. Underlying Funds;
(g) an exemption for the Top Funds from paragraph 2.5(2)(a) of NI 81-102 to permit the Top Funds to purchase securities of the U.S. Underlying Funds even though they are not subject to NI 81-102; and
(h) an exemption for the Top Funds from paragraph 2.5(2)(c) of NI 81-102 to permit the Top Funds to purchase securities of the U.S. Underlying Funds even though they are not reporting issuers in an Applicable Jurisdiction (as defined below).
(paragraphs (f), (g) and (h), the U.S. Underlying Fund Relief)
(collectively, the Exemption Sought)
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the British Columbia Securities Commission is the principal regulator for this application;
(b) 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 all of the provinces and territories of Canada other than the Jurisdictions (together with the Jurisdictions, the Applicable Jurisdictions); and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulator in Ontario.
¶ 2 Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 81-102 have the same meaning if used in this decision, unless otherwise defined. The following terms used in this decision have the following meanings:
Affiliate Dealer means a registered dealer that is an affiliate of an Authorized Dealer or Designated Broker and that participates in the re-sale of Creation Units (as defined below) from time to time.
Authorized Dealer means a registered dealer that has entered into an agreement with the manager of a JPM ETF authorizing the dealer to subscribe for, purchase and redeem Creation Units (as defined below) from one or more JPM ETFs on a continuous basis from time to time.
Basket of Securities means, in relation to the JPM ETF securities of a JPM ETF, a group of securities or assets representing the constituents of the JPM ETF.
Designated Broker means a registered dealer that has entered into an agreement with the manager of a JPM ETF to perform certain duties in relation to the JPM ETF, including the posting of a liquid two-way market for the trading of the JPM ETF securities on a Marketplace.
ETF Facts means a prescribed summary disclosure document required in respect of one or more classes or series of Securities being distributed under a prospectus.
Fannie and Freddie Securities means debt obligations issued or guaranteed by either Fannie Mae or Freddie Mac including, without limitation, bonds and mortgage-backed securities and Fannie or Freddie Security means any one such debt obligation.
JBND means JPMorgan Active Bond ETF, a U.S. ETF the securities of which are listed on the NYSE.
JCPB means JPMorgan Core Plus Bond ETF, a U.S. ETF the securities of which are listed on Cboe Global Markets.
JPIE means JPMorgan Income ETF, a U.S. ETF the securities of which are listed on the NYSE Arca.
JPST means JPMorgan Ultra-Short Income ETF, a U.S. ETF the securities of which are listed on the NYSE Arca.
Marketplace means a marketplace as defined in National Instrument 21-101 Marketplace Operation that is in Canada.
Minimum Rating means a credit rating of BBB- assigned by S&P Global Ratings Canada or an equivalent rating assigned by one or more other designated rating organizations.
Prescribed Number of JPM ETF Securities means the number of JPM ETF securities determined by the Filer from time to time for the purpose of subscription orders, exchanges, redemptions or for other purposes.
Prospectus Delivery Requirement means the requirement that a dealer, not acting as agent of the purchaser, who receives an order or subscription for a security offered in a distribution to which the prospectus requirement of the Legislation applies, send or deliver to the purchaser or its agent, unless the dealer has previously done so, the latest prospectus and any amendment either before entering into an agreement of purchase and sale resulting from the order or subscription, or not later than midnight on the second business day after entering into that agreement.
Securityholders means beneficial or registered holders of listed securities of a JPM ETF.
Take-Over Bid Requirements means the requirements of NI 62-104 relating to take-over bids, including the requirement to file a report of a take-over bid and to pay the accompanying fee, in each Applicable Jurisdiction.
U.S. JPM ETF means a U.S. domiciled exchange-traded fund managed by JPMIM and includes the U.S. Underlying Funds.
U.S. means the United States of America.
U.S. Government Equivalent Rating means a credit rating assigned by S&P Global Ratings Canada, or an equivalent rating assigned by one or more other designated rating organizations, to a Fannie or Freddie Security that is not less than the credit rating then assigned by such designated rating organization to the debt of the United States government of approximately the same term as the remaining term to maturity of, and denominated in the same currency as, the Fannie or Freddie Security.
U.S. Investment Company Act means the U.S. Investment Company Act of 1940, as amended from time to time.
U.S. Underlying Funds means, together, JBND, JCPB, JPIE and JPST and each successor ETF to any of these ETFs.
¶ 3 This decision is based on the following facts represented by the Filer:
The Filer
1. the Filer is a corporation formed by amalgamation pursuant to a certificate of amalgamation dated August 3, 2004, as amended by a certificate of amendment dated February 24, 2005, under the laws of Canada;
2. the Filer is registered as an investment fund manager under the securities legislation in British Columbia, Newfoundland and Labrador, Ontario and Québec and is also registered as an exempt market dealer and portfolio manager in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Québec and Saskatchewan, a commodity trading manager in Ontario and a derivatives portfolio manager in Québec; the head office of the Filer is in British Columbia;
3. the Filer is or will be the manager and portfolio manager of each of the JPM ETFs;
4. the Filer has applied, or will apply, to list the securities of each JPM ETF on a Marketplace; and
5. the Filer is not in default of the securities legislation in any of the Applicable Jurisdictions.
The JPM ETFs
6. each JPM ETF is or will be an exchange-traded fund governed by the laws of a Jurisdiction;
7. each JPM ETF distributes or will distribute its Securities pursuant to a long form prospectus prepared pursuant to National Instrument 41-101 -- General Prospectus Requirements (NI 41-101) and Form 41-101F2 -- Information Required in an Investment Fund Prospectus and is or will be governed by the applicable provisions of NI 81-102, subject to any exemptions therefrom that may be granted by the securities regulatory authorities;
8. each JPM ETF is or will be a reporting issuer in the Applicable Jurisdictions in which its securities are distributed;
9. each JPM ETF is or will be subject to National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107);
10. Securities of each JPM ETF are or will be listed on a Marketplace; and
11. the existing JPM ETFs are not in default of the securities legislation in any of the Applicable Jurisdictions.
A. JPM ETF Relief
12. the Filer has filed, or will file, a long form prospectus of each JPM ETF prepared and filed in accordance with NI 41-101, subject to any exemptions that may be granted by the applicable securities regulatory authorities;
13. JPM ETF securities are or will be distributed on a continuous basis in one or more of the Jurisdictions under a prospectus; JPM ETF securities may generally only be subscribed for or purchased directly from the JPM ETF (Creation Units) by Authorized Dealers or Designated Brokers; generally, subscriptions or purchases may only be placed for a Prescribed Number of JPM ETF Securities (or a multiple thereof) on any day when there is a trading session on a Marketplace; Authorized Dealers or Designated Brokers subscribe for Creation Units for the purpose of facilitating investor purchases of JPM ETF securities on a Marketplace;
14. in addition to subscribing for and re-selling Creation Units, Authorized Dealers, Designated Brokers and Affiliate Dealers will also generally be engaged in purchasing and selling JPM ETF securities of the same class or series as the Creation Units in the secondary market; Other Dealers may also be engaged in purchasing and selling JPM ETF securities of the same class or series as the Creation Units in the secondary market despite not being an Authorized Dealer, Designated Broker or Affiliate Dealer;
15. each Designated Broker or Authorized Dealer that subscribes for Creation Units must deliver, in respect of each Prescribed Number of JPM ETF Securities to be issued, a Basket of Securities and/or cash in an amount sufficient so that the value of the Basket of Securities and/or cash delivered is equal to the NAV of the JPM ETF securities subscribed for next determined following the receipt of the subscription order; in the discretion of the Filer, the JPM ETF may also accept subscriptions for Creation Units in cash only, in securities other than Baskets of Securities and/or in a combination of cash and securities other than Baskets of Securities, in an amount equal to the NAV of the JPM ETF securities subscribed for next determined following the receipt of the subscription order;
16. Designated Brokers and Authorized Dealers will not receive any fees or commissions from the Filer or a JPM ETF in connection with the issuance of Creation Units to them; on the issuance of Creation Units, the Filer or a JPM ETF may, in the Filer's discretion, charge a fee to a Designated Broker or an Authorized Dealer to offset the expenses incurred in issuing the Creation Units;
17. upon notice given by the Filer from time to time and, in any event, not more than once quarterly, a Designated Broker may be contractually required to subscribe for Creation Units of a JPM ETF for cash in an amount not to exceed a specified percentage of the NAV of the JPM ETF or such other amount established by the Filer;
18. each JPM ETF has appointed or will appoint, at any given time, a Designated Broker to perform certain other functions, which include standing in the market with a bid and ask price for JPM ETF securities for the purpose of maintaining liquidity for the JPM ETF securities;
19. except for Authorized Dealer and Designated Broker subscriptions for Creation Units, as described above, and other distributions that are exempt from the Prospectus Delivery Requirement under the Legislation, JPM ETF securities generally will not be able to be purchased directly from a JPM ETF; investors are generally expected to purchase and sell JPM ETF securities, directly or indirectly, through dealers executing trades through the facilities of a Marketplace; JPM ETF securities may also be issued directly to Securityholders upon a reinvestment of distributions of income or capital gains;
20. securityholders that are not Designated Brokers or Authorized Dealers that wish to dispose of their JPM ETF securities may generally do so by selling their JPM ETF securities on a Marketplace, through a registered dealer, subject only to customary brokerage commissions; a securityholder that holds a Prescribed Number of JPM ETF Securities or multiple thereof may exchange such JPM ETF securities for Baskets of Securities and/or cash in the discretion of the Filer; securityholders may also redeem JPM ETF securities for cash at a redemption price equal to 95% of the closing price of the JPM ETF securities on a Marketplace on the date of redemption, subject to a maximum redemption price of the applicable NAV per JPM ETF security;
B. Fannie Mae and Freddie Mac Relief
21. the investment objective of each JPM ETF that will rely on the Fannie Mae and Freddie Mac Relief permits, or will permit, the JPM ETF to invest a majority of its assets in fixed income securities. The ability to invest in Fannie and Freddie Securities is, or will be, an important feature of each such JPM ETF due to the size and role of Fannie Mae and Freddie Mac in the U.S. mortgage industry;
22. Fannie Mae is a financial services corporation originally established by the U.S. Congress in 1938 to provide U.S. federal government money to local banks to finance home mortgages during the Great Depression; its business includes borrowing money in the debt markets by selling bonds and providing liquidity to mortgage originators by purchasing whole loans which it then securitizes by issuing mortgage-backed securities. Fannie Mae also earns guarantee fees for assuming the credit risk on mortgage loans;
23. Freddie Mac is a financial services corporation that was created by the U.S. Congress in 1970 to expand the secondary market for mortgages in the U.S.; it was established to provide competition to Fannie Mae. Similar to Fannie Mae, the business of Freddie Mac includes buying mortgages in the secondary market, pooling them, and issuing mortgage-backed securities, as well as earning guarantee fees for assuming the credit risk on mortgage loans;
24. Fannie and Freddie Securities provide a substantial portion of the financing for residential mortgages in the U.S.;
25. originally, the obligations of Fannie Mae were explicitly guaranteed by the U.S. government. The explicit guarantee was removed as part of a reorganization of Fannie Mae in 1968. Like Fannie Mae, there is no explicit guarantee of the obligations of Freddie Mac by the U.S. government;
26. notwithstanding the absence of an explicit guarantee, most Fannie and Freddie Securities currently have a U.S. Government Equivalent Rating;
27. during the 2008 financial crisis, Fannie Mae and Freddie Mac together owned or guaranteed approximately half of the U.S.'s US$12 trillion mortgage market, many of which were at risk of defaulting on their obligations. Such a default would have increased the cost of obtaining mortgage financing from other sources, thereby exacerbating the decline in the U.S. residential real estate market, as well as negatively impacting investors (including retirement funds and money market funds) that held Fannie and Freddie Securities. As a result, on September 7, 2008, Fannie Mae and Freddie Mac were placed into conservatorship of the U.S. Federal Housing Finance Agency in order to stabilize them. Fannie Mae and Freddie Mac were expressly excluded from the bail-in regime created under Title II of the United States Dodd-Frank Wall Street Reform and Consumer Protection Act to preclude future U.S. government bailouts of large financial companies;
28. under the U.S. Investment Company Act, an investment company registered with the United States Securities and Exchange Commission (the SEC) seeking to qualify as a "diversified company" is required, among other matters, to invest at least 75% of its total assets in a manner whereby not more than 5% of the value of its total assets is invested in the securities of any single issuer (subject to certain exclusions); this restriction is analogous to the diversification requirement imposed on public investment funds in Canada by subsections 2.1(1) and 2.1(1.1) of NI 81-102; similar to paragraph 2.1(2)(a) of NI 81-102, the U.S. Investment Company Act excludes a "government security" from the 5% limit described;
29. the definition of "government security" in the U.S. Investment Company Act differs from that contained in NI 81-102 by including any security issued by a person controlled or supervised by and acting as an instrumentality of the U.S. government pursuant to authority granted by the U.S. Congress (a U.S. government instrumentality); each of Fannie Mae and Freddie Mac, currently under conservatorship, may be considered to be a U.S. government instrumentality and Fannie and Freddie Securities therefore are "government securities" under the U.S. Investment Company Act;
30. the definition of "government security" in NI 81-102 does not include U.S. government instrumentalities; accordingly, the only U.S. securities which qualify as government securities are those directly issued by, or fully and unconditionally guaranteed by, the U.S. government; Fannie and Freddie Securities do not meet this definition since their obligations are not explicitly fully and unconditionally guaranteed by the U.S. government; and
31. as a result, the restrictions in subsections 2.1(1) and 2.1(1.1) in NI 81-102 apply to each investment by a JPM ETF in Fannie and Freddie Securities.
C. U.S. Money Market Fund Relief
The U.S. JPM ETFs
32. each U.S. JPM ETF is a U.S. domiciled exchange-traded fund managed by J.P. Morgan Investment Management Inc. (JPMIM; for all purposes herein, JPMIM also shall include an affiliate or successor of JPMIM, unless the context otherwise requires), an affiliate of the Filer;
33. JPMIM is registered with the SEC under the U.S. Investment Advisers Act of 1940;
34. each U.S. JPM ETF is subject to the U.S. Investment Company Act and is an "investment fund" within the meaning of applicable Canadian securities legislation;
35. the shares of each U.S. JPM ETF are or will be offered pursuant to a prospectus filed with the SEC;
36. the shares of each U.S. JPM ETF are or will be listed on a stock exchange in the U.S.;
37. the investment strategies of each U.S. JPM ETF permit it to invest its assets in high quality, liquid short-term instruments, including securities of other investment funds;
38. pursuant to the U.S. Investment Company Act, each U.S. JPM ETF may from time to time hold more than 10% of its NAV in securities of U.S. registered money market funds advised by JPMIM or an affiliate (each, a U.S. Money Market Fund); and
39. each U.S. JPM ETF currently holds securities of U.S. Money Market Funds, namely: (a) JPMorgan U.S. Government Money Market Fund and (b) JPMorgan Prime Money Market Fund or of one or more other U.S. Money Market Funds managed by JPMIM or an affiliate.
JPMorgan U.S. Government Money Market Fund
40. JPMorgan U.S. Government Money Market Fund is a series of JPMorgan Trust II, a statutory trust existing under the laws of the State of Delaware; JPMorgan U.S. Government Money Market Fund is considered to be, and invests its assets in accordance with, the maturity, credit and liquidity requirements of a U.S. "government money market fund" under Rule 2a-7 of the U.S. Investment Company Act; the investment objective of JPMorgan U.S. Government Money Market Fund is to seek high current income with liquidity and stability of principal;
41. JPMorgan U.S. Government Money Market Fund seeks to achieve its investment objective, under normal market conditions, by investing its assets exclusively in debt securities issued or guaranteed by the U.S. government, or by U.S. government agencies or instrumentalities or government-sponsored enterprises, and repurchase agreements fully collateralized by U.S. Treasury and U.S. government securities;
42. JPMorgan U.S. Government Money Market Fund is a money market fund managed in the following manner:
(a) the fund seeks to maintain a net asset value (NAV) of $1.00 per share;
(b) the dollar-weighted average maturity of the fund will be 60 days or less and the dollar-weighted average life to maturity will be 120 days or less;
(c) the fund will only buy securities that have remaining maturities of 397 days or less or securities otherwise permitted to be purchased because of maturity shortening provisions under applicable regulation;
(d) the fund invests only in U.S. dollar-denominated securities; and
(e) the fund seeks to invest in securities that present minimal credit risk.
JPMorgan Prime Money Market Fund
43. JPMorgan Prime Money Market Fund is a series of JPMorgan Trust I, a statutory trust existing under the laws of the State of Delaware; JPMorgan Prime Money Market Fund is considered to be, and invests its assets in accordance with, the maturity, credit and liquidity requirements of, a U.S. money market fund under Rule 2a-7 of the U.S. Investment Company Act; the investment objective of JPMorgan Prime Money Market Fund is to seek current income while seeking to maintain liquidity and a low volatility of principal;
44. JPMorgan Prime Money Market Fund seeks to achieve its investment objective by investing in high quality, short-term money market instruments which are issued and payable in U.S. dollars. JPMorgan Prime Money Market Fund principally invests in:
(a) high quality commercial paper and other short-term debt securities, including floating and variable rate demand notes of U.S. and foreign corporations;
(b) debt securities issued or guaranteed by qualified U.S. and foreign banks, including certificates of deposit, time deposits and other short-term securities;
(c) securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or government-sponsored enterprises;
(d) asset-backed securities;
(e) repurchase agreements; and
(f) taxable municipal obligations.
45. JPMorgan Prime Money Market Fund is a money market fund managed in the following manner:
(a) the fund calculates its net asset value to four decimals (e.g., $1.0000) using market-based pricing and operates with a floating net asset value;
(b) the dollar-weighted average maturity of the fund will be 60 days or less and the dollar-weighted average life to maturity will be 120 days or less;
(c) the fund will only buy securities that have remaining maturities of 397 days or less or securities otherwise permitted to be purchased because of maturity shortening provisions under applicable regulation;
(d) the fund invests only in U.S. dollar-denominated securities; and
(e) the fund seeks to invest in securities that present minimal credit risk.
U.S. Money Market Funds
46. U.S. Money Market Funds are subject to the investment restrictions prescribed under Rule 2a-7 of the U.S. Investment Company Act, and other rules of the U.S. Securities and Exchange Commission, including certain restrictions relating to portfolio quality, maturity, diversification and liquidity;
47. the investment restrictions prescribed by Rule 2a-7 of the U.S. Investment Company Act are substantively similar to the requirements for money market funds under NI 81-102, subject to certain non-material differences including:
(a) as outlined above, the portfolio of a U.S. Money Market Fund must maintain a dollar-weighted average portfolio maturity appropriate to its investment objective provided that the fund must not: (i) acquire any instrument with a remaining maturity of greater than 397 calendar days or (ii) maintain a dollar-weighted average portfolio maturity that (A) exceeds 60 calendar days or (B) exceeds 120 calendar days (determined without reference to the exceptions in (i) above regarding interest rate readjustments);
(b) the advisor to a U.S. Money Market Fund must determine that any investment by the fund creates a minimal credit risk for the fund; and
(c) a U.S. Money Market Fund, in which a U.S. JPM ETF will invest, must not have less than: (i) 10% of its assets invested in cash, direct obligations of the U.S. Government, government securities under certain conditions or securities that will mature within one business day and (ii) 30% of its assets invested in cash, direct obligations of the U.S. Government, government securities under certain conditions or securities that will mature in five business days.
48. the Filer believes that any risks associated with an indirect investment in a U.S. Money Market Fund compared to a Canadian money market fund are mitigated by the fact that the U.S. Money Market Fund is subject to the U.S. Investment Company Act and oversight by the SEC and any loss that could result from an investment in a U.S. Money Market Fund by a U.S. JPM ETF will be limited to the amount invested by the U.S. JPM ETF in such U.S. Money Market Fund;
C. U.S. Underlying Fund Relief
The Top Funds
49. the Top Funds will be actively managed ETFs governed by the laws of the province of British Columbia;
50. the Filer intends to launch the Top Funds essentially as the Canadian versions of the U.S. Underlying Funds;
51. JPMIM acts as the portfolio advisor for the U.S. Underlying Funds and will act as portfolio sub-advisor to the Top Funds;
52. the investment objectives, investment strategies, investment restrictions and risk factors applicable to Canadian JBND will be substantially the same as those applicable to JBND, except that Canadian JBND will be permitted to achieve these objectives by investing substantially all of its assets in JBND shares;
53. the investment objectives, investment strategies, investment restrictions and risk factors applicable to Canadian JCPB will be substantially the same as those applicable to JCPB, except that Canadian JCPB will be permitted to achieve these objectives by investing substantially all of its assets in JCPB shares;
54. the investment objectives, investment strategies, investment restrictions and risk factors applicable to Canadian JPIE will be substantially the same as those applicable to JPIE, except that Canadian JPIE will be permitted to achieve these objectives by investing substantially all of its assets in JPIE shares;
55. the investment objectives, investment strategies, investment restrictions and risk factors applicable to Canadian JPST will be substantially the same as those applicable to JPST, except that Canadian JPST will be permitted to achieve these objectives by investing substantially all of its assets in JPST shares;
56. it is currently expected that the Filer will launch a currency hedged version and a currency unhedged version of each Top Fund, which currency hedged versions are expected to seek to hedge substantially all of their U.S. dollar currency exposure back to the Canadian dollar;
57. the portfolio managers at JPMIM currently responsible for overseeing each U.S. Underlying Fund's portfolio and investments are currently expected to be the same as the portfolio managers responsible for overseeing each Top Fund's portfolio and investments, in JPMIM's capacity as sub-advisor to the Top Funds; and
58. affiliates of JPMorgan Chase Bank, N.A., the custodian and transfer agent for the U.S. Underlying Funds, will act as the Top Funds' custodian and transfer agent;
The U.S. Underlying Funds
59. the U.S. Underlying Funds are actively managed exchange-traded funds subject to the U.S. Investment Company Act and each is an investment fund within the meaning of applicable Canadian securities legislation;
60. each of JPMIM and the U.S. Underlying Funds are regulated by the SEC; the regulatory oversight of JPMIM and the U.S. Underlying Funds by the SEC will be functionally equivalent to that of the Filer and the Top Funds, which will be primarily regulated by the BCSC;
61. the portfolio holdings of each of the U.S. Underlying Funds are available on their respective websites and are updated on a daily basis as of the close of business on the prior business day;
62. securities of each U.S. Underlying Fund are offered in their primary markets pursuant to a prospectus filed with the SEC which discloses material facts, similar to the disclosure requirements under Form 41-101F2;
63. the U.S. Underlying Funds are required to prepare a summary prospectus which provides disclosure that is substantially similar to the disclosure required to be included in the ETF Facts required by Form 41-101F4 Information Required in an ETF Facts Document;
64. the U.S. Underlying Funds are subject to continuous disclosure obligations which are substantially similar to the continuous disclosure obligations under National Instrument 81-106 Investment Fund Continuous Disclosure;
65. the U.S. Underlying Funds are required to update information of material significance in their respective prospectuses, to prepare an unaudited set of financial statements at least semi-annually, and to prepare management discussion of fund performance and an audited set of financial statements annually;
66. JPMIM owes its clients (including the U.S. Underlying Funds) a fiduciary duty under the U.S. Investment Advisers Act of 1940, which comprises a duty of care and a duty of loyalty; JPMIM must, at all times, serve the best interests of its clients, including the U.S. Underlying Funds;
67. the securities of JBND are listed and traded on the NYSE, the securities of JCPB are listed and traded on Cboe Global Markets and the securities of JPIE and JPST are listed on the NYSE Arca, each a regulated exchange in the United States; the listing requirements of the NYSE, Cboe Global Markets and NYSE Arca substantially address the same concerns as the listing requirements of Marketplaces in Canada; and
68. the markets for securities of the U.S. Underlying Funds are sufficiently liquid because the U.S. Underlying Funds are large funds, with JBND having US$1.89B in assets (as at April 30, 2025), JCPB having US$6.27B in assets (as at April 30, 2025), JPIE having US$3.39B in assets (as at April 30, 2025) and JPST having US$30.55B in assets (as at April 30, 2025); in addition, they are supported by authorized participants and market makers (each of whom are U.S. broker-dealers) which make the markets for the securities of the U.S. Underlying Funds and are incentivized to do so because of the arbitrage opportunities inherent in making such markets; accordingly, the Filer expects the Top Funds to be able to dispose of securities of the U.S. Underlying Funds through market facilities in order to raise cash, including to fund the redemption requests of their respective Securityholders from time to time;
JBND
69. the investment objective of JBND is to seek to deliver total returns from a portfolio of investment grade intermediate- and long-term bonds;
70. JBND seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its assets in bonds. JBND invests primarily in investment grade corporate bonds, U.S Treasury obligations, including treasury coupon strips and treasury principal strips, other U.S. government and agency securities, and asset-backed and mortgage-backed securities;
71. JBND's bond holdings will have intermediate to long maturities, with the average weighted maturity range falling between 4 and 12 years; JBND may shorten or lengthen its average weighted maturity if deemed appropriate for a temporary defensive purpose;
72. under normal market conditions, JBND invests at least 80% of its assets in investments that, at the time of purchase, are rated as investment grade or the unrated equivalent. While JBND may not purchase below investment grade securities, it may hold up to 5% in below investment grade securities;
73. JBND may invest in (a) investment grade corporate bonds, (b) U.S. Treasury obligations, including treasury coupon strips and treasury principal strips, (c) other U.S. government and agency securities, (d) debt securities structured as private placements, (e) restricted securities and other unregistered securities, (f) foreign securities, (g) agency mortgage-backed securities, asset-backed securities, commercial mortgage-backed securities, non-agency residential mortgage-backed securities and sub-prime mortgaged-related securities, (h) adjustable rate mortgage loans, (i) non-government foreign debt securities, (j) mortgage dollar rolls, (k) variable and floating rate securities, (l) when-issued, delayed delivery securities and forward commitments, (m) zero-coupon securities, and (n) pay-in-kind and deferred payment securities;
74. JBND has flexibility to utilize derivatives as substitutes for securities in which JBND can invest, in order to manage duration, sector and yield curve exposure, credit and spread volatility and to respond to volatile market conditions. Such derivatives may include futures contracts, options and swaps;
75. as part of its principal investment strategy and for temporary defensive purposes, any portion of JBND's total assets may be invested in cash and cash equivalents, including affiliated money market funds; and
76. as at April 30, 2025, the NAV of JBND was US$1.89B and JBND held 1,143 individual positions across 10 industries.
JCPB
77. the investment objective of JCPB is to seek to provide a high level of current income by investing primarily in a diversified portfolio of high-, medium- and low-grade debt securities;
78. JCPB seeks to achieve its investment objectives by investing, under normal circumstances, at least 80% of its assets in bonds; JCPB invests primarily in corporate bonds, U.S Treasury obligations and other U.S. government and agency securities and asset-backed, mortgage-related and mortgage-backed securities;
79. JCPB also may invest in securities rated below investment grade (i.e., high yield bonds, also called junk bonds or non-investment grade bonds) or the unrated equivalent, including from foreign and emerging markets;
80. JCPB's bond holdings will have intermediate to long maturities, with the average weighted maturity range ordinarily falling between 5 and 20 years; JCPB may shorten or lengthen its average weighted maturity if deemed appropriate for a temporary defensive purpose;
81. JCPB has flexibility to invest across the credit spectrum, which provides exposure to various credit rating categories; under normal market conditions, JCPB invests at least 70% of its assets in investments that, at the time of purchase, are rated investment grade or that are unrated but deemed to be comparable in quality; the balance of JCPB's assets are not required to meet any minimum quality rating, although JCPB will not, under normal circumstances, invest more than 30% of its assets in below investment grade securities (or the unrated equivalent); such securities also include distressed debt;
82. JCPB may invest in (a) corporate bonds, (b) U.S. Treasury obligations, (c) other U.S. government and agency securities, (d) debt securities structured as private placements, (e) restricted securities and other unregistered securities, (f) foreign securities, including securities denominated in foreign currencies (g) asset backed, mortgage-related securities, (h) mortgage-related and mortgage-backed securities (including collateralized mortgage obligations (agency and non-agency), stripped mortgage-backed securities (interest-only or principal-only), commercial mortgage-backed-securities, mortgage pass-through securities and sub-prime mortgage-related securities), (i) mortgage dollar rolls, (j) other ETFs, (k) preferred shares, (l) convertible securities including contingent convertible securities, loan participations and assignments, (m) preferred stock and common stock, and (n) municipal securities;
83. JCPB has flexibility to utilize derivatives as substitutes for securities in which JCPB can invest, in order to hedge various investments, for risk management, efficient portfolio management, and/or to increase income or gain; such derivatives may include futures contracts, options, swaps and forward contracts. JCPB may use CPI-U swaps to hedge inflation risks associated with certain debt securities it holds; JCPB may also use foreign currency derivatives such as currency forwards to hedge its non-US dollar investments back to the U.S. dollar, or to gain or adjust exposure to particular foreign securities, markets or currencies;
84. as part of its principal investment strategy and for temporary defensive purposes, any portion of JCPB's total assets may be invested in cash and cash equivalents, including affiliated money market funds; and
85. as at April 30, 2025, the NAV of JCPB was US$6.27B and JCPB held 2,652 individual positions across 16 industries.
JPIE
86. the investment objective of JPIE is to seek to provide income with a secondary objective of capital appreciation;
87. JPIE seeks to achieve its investment objectives by investing opportunistically among multiple debt markets and sectors that JPMIM believes will have high potential to produce income and have low correlations to each other in order to manage risk;
88. JPIE is not managed to a benchmark, which allows it to shift its allocations based on changing market conditions, which may result in investing in a single or in multiple markets and sectors;
89. JPIE has broad flexibility to invest in a wide variety of debt securities and instruments of any maturity; JPIE may invest in fixed and floating rate debt securities issued in both the U.S. and foreign markets, including emerging markets, and anticipates it will invest no more than 10% of its total assets in non-U.S. dollar denominated securities;
90. although JPIE has the flexibility to invest above 65% of its total assets in investments that are rated below investment grade (also known as junk bonds or high yield securities) or the unrated equivalent (which may include distressed debt), to take advantage of market opportunities, under normal market conditions, JPIE invests at least 35% of its total assets in investments that, at the time of purchase, are rated investment grade or the unrated equivalent;
91. JPIE may invest in (a) asset-backed securities, mortgage-related securities, mortgage-backed securities and sub-prime mortgaged-related securities, (b) inverse floaters and inverse interest-only securities, (c) structured investments and adjustable-rate mortgage loans, (d) securities issued by the U.S. government and its agencies and instrumentalities, (e) inflation-linked debt securities, (g) loan participations, assignments and commitments to purchase loans, and (h) convertible securities and preferred stock;
92. JPIE has flexibility to utilize derivatives, which will be used primarily for hedging, but may also be used as substitutes for securities in which JPIE can invest; such derivatives may include futures contracts, options, swaps (including interest rate and credit default swaps) and forward contracts;
93. JPIE may also invest in mortgage pass-through securities including securities eligible to be sold on the to-be-announced or TBA market (mortgage TBAs); JPIE may enter into dollar rolls, in which JPIE sells mortgage-backed securities including mortgage TBAs and at the same time contracts to buy back very similar securities on a future date; JPIE may also sell mortgage TBAs short;
94. as part of its principal investment strategy and for temporary defensive purposes, any portion of JPIE's assets may be invested in cash and cash equivalents; and
95. as at April 30, 2025, the NAV of JPIE was US$3.39B and JPIE held 1,910 individual positions across 12 industries.
JPST
96. the investment objective of JPST is to seek to provide current income while seeking to maintain a low volatility of principal;
97. under normal circumstances, JPST seeks to achieve its investment objective by investing at least 80% of its assets in investment grade, U.S. dollar denominated short-term fixed, variable and floating rate debt;
98. for purposes of JPST's 80% policy, the investment grade U.S. dollar denominated short-term fixed, variable and floating rate debt securities in which JPST will invest will carry a minimum short-term rating of P-2, A-2 or F2 or better by Moody's Investors Service Inc. (Moody's), Standard & Poor's Corporation (S&P), or Fitch Ratings (Fitch), respectively, or the equivalent by another nationally recognized statistical rating organization, or a minimum long-term rating of Baa3, BBB- or BBB- by Moody's, S&P or Fitch, respectively, or an equivalent by another nationally recognized statistical rating organization at the time of investment, or if such investments are unrated, deemed by JPMIM to be of comparable quality at the time of investment;
99. JPST also may invest in securities rated below investment grade (i.e., high yield bonds, also called junk bonds or non-investment grade bonds) or the unrated equivalent;
100. JPST may invest in (a) corporate securities, (b) asset-backed securities (including sub prime securities and collateralized loan obligations), (c) mortgage-backed securities and mortgage related securities, (d) high quality money market instruments (such as commercial paper and certificates of deposit), (e) U.S. Treasury securities (including Separate Trading of Registered Interest and Principal of Securities), (f) securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, (g) securities issued or guaranteed by foreign governments, (h) repurchase agreements, (i) when-issued securities, (j) delayed delivery securities, (k) forward commitments, (l) zero-coupon securities, and (m) privately placed securities;
101. under normal conditions, JPST will invest more than 25% of its assets in securities issued by companies in the banking industry; JPST may, however, invest less than 25% of its assets in the banking industry as a temporary defensive measure;
102. as part of its principal investment strategy and for temporary defensive purposes, any portion of JPST's total assets may be invested in cash, money market funds and cash equivalents; and
103. as at April 30, 2025, the NAV of JPST was US$30.55B and JPST held 839 individual positions across 8 industries.
Benefits of Investing in U.S. Underlying Funds
104. given the size of the U.S. Underlying Funds, they are able to invest in a wide variety of debt securities, providing exposure to multiple markets, and resulting in a well-diversified portfolio; the Filer submits that the Top Funds would require substantial initial investment in order to properly articulate their respective investment strategies through a directly held portfolio, and because they will have significantly less assets than the corresponding U.S. Underlying Fund at inception, the Filer believes that the Top Funds likely would not otherwise be able to achieve the portfolio diversification available to them by investing substantially all of their assets in the corresponding U.S. Underlying Fund;
105. furthermore, the Filer believes that it is expected that there will be pricing and efficiency benefits from the Top Funds investing in the U.S. Underlying Funds; the U.S. Underlying Funds benefit from more competitive pricing as a result of purchasing significantly larger volumes of debt securities, and therefore, by the Top Funds investing substantially all of their assets in shares of the corresponding U.S. Underlying Fund, the Filer believes that trading costs are expected to be lower for the Top Funds than the Top Funds could achieve through a directly held portfolio; and
106. given the expected benefits that the Filer believes the Top Funds can achieve through direct investment in U.S. Underlying Funds (being efficient exposure to a diversified pool of debt securities in multiple markets, with the benefit of more competitive pricing, greater liquidity and lower trading costs), Canadian JBND would like to invest up to 100% of its net assets in JBND, Canadian JCPB would like to invest up to 100% of its net asset in JCPB, Canadian JPIE would like to invest up to 100% of its net assets in JPIE, and Canadian JPST would like to invest up to 100% of its net asset in JPST.
A. JPM ETF Relief
Underwriter's Certificate Requirement
107. Authorized Dealers and Designated Brokers will not provide the same services in connection with a distribution of Creation Units as would typically be provided by an underwriter in a conventional underwriting;
108. the Filer will generally conduct its own marketing, advertising and promotion of the JPM ETFs;
109. the Authorized Dealers and Designated Brokers will not be involved in the preparation of a JPM ETF's prospectus, will not perform any review or any independent due diligence as to the content of a JPM ETF's prospectus, and will not incur any marketing costs or receive any underwriting fees or commissions from the JPM ETFs or the Filer in connection with the distribution of JPM ETF securities; the Authorized Dealers and Designated Brokers generally seek to profit from their ability to create and redeem JPM ETF securities by engaging in arbitrage trading to capture spreads between the trading prices of JPM ETF securities and their underlying securities and by making markets for their clients to facilitate client trading in JPM ETF securities;
110. in addition, neither the Filer nor the JPM ETFs will pay any fees or commissions to the Designated Brokers and Authorized Dealers; as the Designated Brokers and Authorized Dealers will not receive any remuneration from the Filer or a JPM ETF in connection with distributing JPM ETF securities and as the Authorized Dealers will change from time to time, it is not practical to provide an underwriter's certificate in the prospectus of the JPM ETFs;
Take-Over Bid Requirements
111. as equity securities that will trade on a Marketplace, it is possible for a person or company to acquire such number of JPM ETF securities so as to trigger the application of the Take-Over Bid Requirements; however:
(a) it will be difficult for one or more Securityholders to exercise control or direction over a JPM ETF, as the constating documents of each JPM ETF will provide that there can be no changes made to such JPM ETF which do not have the support of the Filer;
(b) it will be difficult for the purchasers of JPM ETF securities to monitor compliance with the Take-Over Bid Requirements because the number of outstanding JPM ETF securities will always be in flux as a result of the ongoing issuance and redemption of JPM ETF securities by each JPM ETF; and
(c) the way in which the JPM ETF securities will be priced deters anyone from either seeking to acquire control or offering to pay a control premium for outstanding JPM ETF securities because pricing for each JPM ETF security will generally reflect the NAV of the JPM ETF securities.
112. the application of the Take-Over Bid Requirements to the JPM ETFs would have an adverse impact on the liquidity of the JPM ETF securities because they could cause the Designated Brokers and other large Securityholders to cease trading JPM ETF securities once the Securityholder has reached the prescribed threshold at which the Take-Over Bid Requirements would apply; this, in turn, could serve to provide conventional mutual funds with a competitive advantage over the JPM ETFs.
B. Fannie Mae and Freddie Mac Relief
113. the Filer believes that Fannie and Freddie Securities represent a large, attractive and unique category of investment that cannot be replicated by any other issuer; for this reason, it is important to the JPM ETFs that they be entitled to maximize their opportunity to invest in Fannie and Freddie Securities;
114. the Filer believes that investments in Fannie and Freddie Securities are desirable because of their risk/return characteristics; accordingly, if the Fannie Mae and Freddie Mac Relief is granted, each JPM ETF will have the opportunity to maintain a more attractive portfolio through greater exposure to these securities;
115. JPMIM manages investment companies in the U.S. that currently hold significant amounts of Fannie and Freddie Securities, in many cases with individual investment companies investing more than 10% of their net assets in the securities of either Fannie Mae or Freddie Mac; granting the Fannie Mae and Freddie Mac Relief will enable the JPM ETFs to invest in Fannie and Freddie Securities to the same degree and proportions as their equivalent U.S. investment company counterparts managed by JPMIM;
116. the Filer intends, either directly or through sub-advisers, to research and monitor the investment attributes and trading operations for Fannie and Freddie Securities; such ongoing research and monitoring will include monitoring proposals to restructure the U.S. residential housing market that may impact the Fannie and Freddie Securities; if the U.S. Congress proposes legislation and the Filer determines in its judgement that, as a result of the announced proposed legislation, there is a significant risk that the Fannie and Freddie Securities held by the JPM ETFs could cease to have a U.S. Government Equivalent Rating or their credit ratings could decline below a Minimum Rating, the JPM ETFs will take any steps that are reasonably required to dispose of their Fannie and Freddie Securities in an orderly and timely fashion such that the Fannie and Freddie Securities held by the JPM ETFs comply with subsections 2.1(1) and 2.1(1.1) of NI 81-102;
117. the Filer, on behalf of the JPM ETFs, requests relief from the restrictions contained in subsection 2.1(1) of NI 81-102 to permit each JPM ETF that is a mutual fund, other than an alternative mutual fund, to make a Purchase when, immediately after the Purchase, more than 10% of the NAV of the JPM ETF would be invested in Fannie and Freddie Securities; and
118. the Filer, on behalf of the JPM ETFs, requests relief from the restrictions contained in subsection 2.1(1.1) of NI 81-102 to permit each JPM ETF that is an alternative mutual fund to make a Purchase when, immediately after the Purchase, more than 20% of the NAV of the JPM ETF would be invested in Fannie and Freddie Securities.
C. U.S. Money Market Fund Relief
119. each JPM ETF would be permitted to invest in shares of a U.S. JPM ETF pursuant to section 2.5(2) of NI 81-102 in reliance on the exceptions provided for in:
(a) subsection 2.5(3)(a) in respect of the shares of those U.S. JPM ETFs that meet the definition of "index participation units" under NI 81-102, or (ii) the U.S. Underlying Fund Relief in respect of the shares of the U.S. Underlying ETFs where such investment is made by the corresponding Top Fund only;
(b) subsection 2.5(5) of NI 81-102 as each Fund purchases or will purchase, shares of a U.S. JPM ETF in the secondary market; and
(c) subsection 2.5(4)(b) of NI 81-102, but for the fact that a U.S. JPM ETF may from time to time purchase or hold more than 10% of its NAV in one or more U.S. Money Market Funds, which as outlined in representation 47, may not meet all of the investment restrictions prescribed in section 2.18 of NI 81-102 and the securities of which do not qualify as "index participation units".
120. the U.S. Money Market Funds in which the U.S. JPM ETFs may invest are subject to the investment restrictions prescribed under Rule 2a-7 of the U.S. Investment Company Act, which are substantially similar to the investment restrictions applicable to a money market fund under NI 81-102;
121. additionally, the exception in Section 2.5(4)(b)(ii) would permit a JPM ETF to purchase and hold securities of a U.S. JPM ETF if such U.S. JPM ETF held more than 10% of its NAV in securities of other U.S. JPM ETFs, provided the securities of each underlying U.S. JPM ETF met the definition of index participation units under NI 81-102; however, since the bottom tier of the proposed structure is one or more U.S. Money Market Funds the securities of which do not qualify as index participation units (rather than a U.S. JPM ETF that issues index participation units), the exception to the 10% limit in Section 2.5(2)(b) of NI 81-102 is not available; this may produce an unintended result given the eligible U.S. JPM ETFs and U.S. Money Market Funds are regulated under the U.S. Investment Company Act and the U.S. Money Market Funds are generally required by the applicable U.S. Investment Company Act regulations to have a more conservative investment strategy than many U.S. JPM ETFs that would be eligible for the aforementioned exception;
122. the U.S. Money Market Funds in which the U.S. JPM ETFs may invest will be subject to the oversight of the SEC;
123. the JPM ETFs will not pay any management or incentive fees in connection with an investment in securities of the U.S. JPM ETF which to a reasonable person would duplicate a fee payable by the U.S. JPM ETF for the same service;
124. the amount of loss that could result from an investment by a JPM ETF in a U.S. JPM ETF will be limited to the amount invested by the JPM ETF in the U.S. JPM ETF;
125. the investment by a JPM ETF in a U.S. JPM ETF will be made in accordance with the fundamental investment objectives of the JPM ETF; and
126. the Filer submits that employing a fund-of-fund structure as described herein achieves efficiencies from an operational perspective and will allow the JPM ETFs to obtain exposure to the U.S. JPM ETFs on a cost-effective basis.
D. U.S. Underlying Fund Relief
127. the Filer believes that having the ability to invest up to 100% of each Top Fund's NAV in securities of the corresponding U.S. Underlying Fund would provide the Top Funds with access to investment opportunities which, as described herein, the Top Funds would not be able to access on an equivalent and cost-efficient basis, which in turn would allow the Top Funds to obtain more advantageous pricing and/or maintain significantly more diversified or tailored portfolios;
128. the Top Funds will not pay any management or incentive fees in connection with an investment in securities of the U.S. Underlying Funds, which to a reasonable person would duplicate a fee payable by the U.S. Underlying Funds for the same service;
129. the investment universe in which JPMIM selects portfolio investments for each of the U.S. Underlying Funds will be the same investment universe in which JPMIM is or will be permitted to select portfolio investments for each of the Top Funds;
130. as at April 30, 2025, the NAV of each of the U.S. Underlying Funds was US$1.89B for JBND, US$6.27B for JCPB, US$3.39B for JPIE and US$30.55B for JPST; as the U.S. Underlying Funds are expected to always have more assets than each of the respective Top Funds, JPMIM is expected to be able to take advantage of investment opportunities given its ability to transact on a larger scale (i.e., the U.S. Underlying Funds are expected to be able to obtain more advantageous pricing and/or have the ability to purchase certain securities that would not otherwise be expected to be available to the Top Funds, given their expected size); accordingly, the U.S. Underlying Fund securityholders are expected to have exposure to a portfolio of assets on a more cost-efficient basis and/or with greater diversification than the Filer believes the Top Fund securityholders would otherwise have in a directly held structure;
131. a summary of key benefits to the Top Funds in investing in securities of the U.S. Underlying Funds include:
(a) the Top Funds would have access to specialized knowledge, expertise and/or analytical resources of JPMIM;
(b) pricing, diversification and/or efficiency benefits that would otherwise not be available to the Top Funds;
(c) greater liquidity than would be achieved purchasing a directly held portfolio of fixed income instruments; and
(d) Securityholders of the Top Funds will have the ability to make their investments using Canadian dollars.
132. any risks associated with an investment in securities of the U.S. Underlying Funds are mitigated by the fact that:
(a) the U.S. Underlying Funds are subject to the U.S. Investment Company Act and oversight of by SEC, and JPMIM is subject to the U.S. Investment Advisers Act of 1940 and oversight by the SEC, and
(b) the U.S. Underlying Funds will comply with Sections 2.1 (concentration restriction), 2.2 (control restrictions), 2.3 (restrictions concerning types of investments), 2.4 (restrictions concerning illiquid assets), 2.6 (borrowing and other investment practices), except in the limited circumstances set out herein under "Compliance with Section 2.6 of NI 81-102 by the U.S. Underlying Funds", and 2.6.1 (short sales) of NI 81-102, subject to any exemptions therefrom obtained by the applicable Top Fund.
133. the amount of loss that could result from an investment by the Top Funds in securities of the U.S. Underlying Funds will be limited to the amount invested by the Top Funds in the U.S. Underlying Funds;
134. an investment by the Top Funds in securities of the U.S. Underlying Funds will represent the business judgement of responsible persons uninfluenced by considerations other than the best interests of the Top Funds;
135. the securities of the U.S. Underlying Funds will not meet the definition of index participation unit as set out in NI 81-102, because the U.S. Underlying Funds will not:
(a) hold securities that are included in a specified widely quoted index in substantially the same proportion as those securities are reflected in that index; or
(b) invest in a manner that causes the U.S. Underlying Funds to replicate the performance of an index.
Compliance with Section 2.6 of NI 81-102 by the U.S. Underlying Funds
136. each of the U.S. Underlying Funds will comply with Section 2.6 of NI 81-102, except that, in the following limited circumstances, borrowing by the U.S. Underlying Funds contrary to subparagraph 2.6(1)(a)(i) of NI 81-102 will be permitted in accordance with Section 18f of the U.S. Investment Company Act:
(a) section 18f of the U.S. Investment Company Act permits open-end investment companies to borrow from banks, provided that immediately after the borrowing, there is asset coverage of at least 300% for all borrowings; this effectively allows the U.S. Underlying Funds to borrow up to one-third of their NAV; however, borrowing is not part of the investment strategies of any of the U.S. Underlying Funds, and the U.S. Underlying Funds have only engaged in borrowing in compliance with subparagraph 2.6(1)(a)(i) of NI 81-102 since their inception;
(b) under normal market conditions, the U.S. Underlying Funds will comply with paragraph 2.6(1)(a)(i) of NI 81-102; however, in stressed market conditions, JPMIM may be required, in accordance with its fiduciary duty to the U.S. Underlying Funds, to cause a U.S. Underlying Fund to borrow above the limit set out in subparagraph 2.6(1)(a)(i) of NI 81-102, in compliance with the U.S. Investment Company Act, as a temporary measure to accommodate requests for the redemption of shares of the U.S. Underlying Fund while the U.S. Underlying Fund effects an orderly liquidation of portfolio assets, or to permit the U.S. Underlying Fund to settle portfolio transactions;
(c) the Filer submits that it is beneficial to the Top Funds for the U.S. Underlying Funds to be able borrow above the limit set out in subparagraph 2.6(1)(a)(i) of NI 81-102, in compliance with the U.S. Investment Company Act, in stressed market conditions, because it would provide increased liquidity to, and facilitate redemptions by, the Top Funds, as shareholders in the U.S. Underlying Fund, during such periods;
(d) the U.S. Underlying Funds would only engage in borrowing above the limit set out in subparagraph 2.6(1)(a)(i) of NI 81-102 in stressed market conditions and only if JPMIM determined such borrowing was necessary in the best interests of shareholders of the applicable U.S. Underlying Fund (which include the corresponding Top Fund); and
137. the Prior Relief required the U.S. Underlying Funds to comply with section 2.6 of NI 81-102 without exception; however, in order for JPMIM to satisfy its fiduciary duties to the U.S. Underlying Funds, it cannot restrict its ability to borrow in accordance with the U.S. Investment Company Act where it determines such temporary borrowing is necessary in the best interests of shareholders of the applicable U.S. Underlying Fund as a result of stressed market conditions; the Filer therefore requests the Revocation to replace the Prior Relief with the Exemption Sought.
¶ 5 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 is that:
1. the Revocation is granted;
2. the Exemption Sought from the Underwriter's Certificate Requirement is granted;
3. the Exemption Sought from the Take-Over Bid Requirement is granted;
4. The Exemption Sought in respect of the Fannie Mae and Freddie Mac Relief is granted to each JPM ETF, provided that:
(a) at the time of Purchase, the Fannie or Freddie Security has a U.S. Government Equivalent Rating and a rating not less than the Minimum Rating;
(b) the prospectus of each JPM ETF:
(i) discloses that the JPM ETF has received permission to invest more than 10% (or, in the case of an alternative mutual fund, 20%) of its net assets in each of Fannie Mae and Freddie Mac provided the Fannie and Freddie Securities maintain a U.S. Government Equivalent Rating and a rating not less than the Minimum Rating;
(ii) discloses (in the case of a prospectus or simplified prospectus, under the heading or sub-heading Investment Strategies) the maximum amount the JPM ETF may invest in Fannie and Freddie Securities; and
(iii) contains risk factors that:
(a) the U.S. government may not guarantee payment of Fannie and Freddie Securities; and
(b) describe the risks associated with the JPM ETF investing more than 10% (or, in the case of an alternative mutual fund, 20%) of its net assets in securities of Fannie Mae or Freddie Mac,
(c) if the rating of a Fannie or Freddie Security held by a JPM ETF ceases to have a U.S. Government Equivalent Rating or declines below the Minimum Rating, the JPM ETF will take the steps that are reasonably required to dispose of such Fannie or Freddie Security in an orderly and timely fashion such that the Fannie and Freddie Securities held by the JPM ETF comply with subsections 2.1(1) and 2.1(1.1) of NI 81-102; and
(d) if the U.S. Congress proposes legislation intended to impact Fannie Mae and/or Freddie Mac and the Filer determines in its judgement that, as a result of the announced proposed legislation, there is a significant risk that the Fannie and Freddie Securities held by the JPM ETFs could cease to have a U.S. Government Equivalent Rating or their credit ratings could decline below the Minimum Rating, the JPM ETFs will take the steps that are reasonably required to dispose of such Fannie and Freddie Securities in an orderly and timely fashion such that the Fannie and Freddie Securities held by the JPM ETFs comply with subsection 2.1(1) of NI 81-102 and/or 2.1(1.1) of NI 81-102, as applicable.
5. the Exemption Sought in respect of the U.S. Money Market Fund Relief is granted to each JPM ETF, provided that:
(a) the investment by a JPM ETF in securities of a U.S. JPM ETF is in accordance with the fundamental investment objectives of the JPM ETF;
(b) the U.S. JPM ETF is an exchange-traded fund subject to the U.S. Investment Company Act in good standing with the SEC;
(c) the U.S. JPM ETF will not, at the time securities of the U.S. JPM ETF are acquired by a JPM ETF, hold more than 10% of its NAV in securities of any other investment funds other than securities of one or more U.S. Money Market Funds or investment funds that issue index participation units; and
(d) the prospectus of each JPM ETF discloses, or will disclose in the next renewal of its prospectus following the date of this decision, in the investment strategy section, the fact that the JPM ETF has obtained the Exemption Sought to permit the JPM ETF to purchase and hold shares of a U.S. JPM ETF that may hold more than 10% of its NAV in securities of one or more U.S. Money Market Funds.
6. the Exemption Sought in respect of the U.S. Underlying Fund Relief is granted to each Top Fund, provided that:
(a) the investments by a Top Fund in securities of a U.S. Underlying Fund are in accordance with the investment objectives of the Top Fund;
(b) the relevant U.S. Underlying Fund is an investment company subject to the U.S. Investment Company Act in good standing with the SEC;
(c) the relevant U.S. Underlying Fund will comply with sections 2.1 (concentration restriction), 2.2 (control restrictions), 2.3 (restrictions concerning types of investments), 2.4 (restrictions concerning illiquid assets), 2.6 (borrowing and other investment practices), except in the limited circumstances set out herein under "Compliance with Section 2.6 of NI 81-102 by the U.S. Underlying Funds", and 2.6.1 (short sales) of NI 81-102, subject to any exemptions therefrom obtained by the applicable Top Fund;
(d) the portfolio manager of each Top Fund is the Filer that is registered under the Securities Act (British Columbia) as a portfolio manager and the portfolio advisor of each U.S. Underlying Fund and sub-advisor of each Top Fund is JPMIM, that is registered with the SEC under the U.S.Investment Advisers Act of 1940 and subject to oversight by the SEC;
(e) the relevant U.S. Underlying Fund will not, at the time securities of the U.S. Underlying Fund are acquired by the Top Fund, hold more than 10% of its NAV in securities of any other investment fund other than securities of a money market fund, a U.S. Money Market Fund, or a mutual fund that issues index participation units;
(f) borrowing is not part of the investment strategies of the relevant U.S. Underlying Fund; and
(g) the Top Fund will disclose in its prospectus following the date of this decision, in the investment strategy section, the fact that the Top Fund has obtained the Exemption Sought to permit investments in the U.S. Underlying Funds on the terms described in this decision.
Temporary, Permanent & Rescinding Issuer Cease Trading Orders
Company Name |
Date of Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Revoke |
|
||||
THERE IS NOTHING TO REPORT THIS WEEK. |
||||
Company Name |
Date of Order |
Date of Revocation |
|
||
THERE IS NOTHING TO REPORT THIS WEEK. |
||
Temporary, Permanent & Rescinding Management Cease Trading Orders
Company Name |
Date of Order |
Date of Lapse |
|
||
THERE IS NOTHING TO REPORT THIS WEEK. |
||
Outstanding Management & Insider Cease Trading Orders
Company Name |
Date of Order or Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Expire |
Date of Issuer Temporary Order |
|
|||||
Performance Sports Group Ltd. |
19 October 2016 |
31 October 2016 |
31 October 2016 |
__________ |
__________ |
Company Name |
Date of Order |
Date of Lapse |
|
||
Agrios Global Holdings Ltd. |
September 17, 2020 |
__________ |
|
||
Sproutly Canada, Inc. |
June 30, 2022 |
__________ |
|
||
iMining Technologies Inc. |
September 30, 2022 |
__________ |
|
||
Alkaline Fuel Cell Power Corp. |
April 4, 2023 |
__________ |
|
||
mCloud Technologies Corp. |
April 5, 2023 |
__________ |
|
||
FenixOro Gold Corp. |
July 5, 2023 |
__________ |
|
||
HAVN Life Sciences Inc. |
August 30, 2023 |
__________ |
|
||
Perk Labs Inc. |
April 4, 2024 |
__________ |
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06325524
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06327326
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- British Columbia
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06330514, 06330476, 06330401
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06339506
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06335197
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06325524
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06336377
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06324400
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06217881
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06264725
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06238618
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06289525
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Promoter(s):
Filing #06273868
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Type and Date:
Offering Price and Description:
Filing # 06341707
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Andean Precious Metals Corp.
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Filing # 06341006
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- British Columbia
Type and Date:
Offering Price and Description:
Filing # 06340825
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Manulife Financial Corporation.
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Filing # 06341041
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Ontario
Type and Date:
Offering Price and Description:
Filing # 06274285
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Nova Scotia
Type and Date:
Filing # 06338237
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- British Columbia
Type and Date:
Offering Price and Description:
Filing # 06337786
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- Saskatchewan
Type and Date:
Offering Price and Description:
Filing # 06341716
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- British Columbia
Offering Price and Description:
Filing # 06341261
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator -- British Columbia
Type and Date:
Offering Price and Description:
Filing # 06241024
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Type |
Company |
Category of Registration |
Effective Date |
|
|||
New Registration |
COLLIERS SECURITIES (CANADA) INC. |
Investment Dealer |
September 24, 2025 |
|
|||
Voluntary Surrender |
OAK BAY CAPITAL INCORPORATED |
Portfolio Manager |
September 24, 2025 |
|
|||
New Registration |
Great Pacific Mortgage & Investments Ltd. |
Exempt Market Dealer |
September 30, 2025 |
Canadian Securities Exchange -- Public Interest Rule Amendments -- Subject to Public Comment -- Proposed Amendments to CSE Listing Policies -- Notice of Approval
In accordance with the process for the Review and Approval of Rules and Information Contained in Form 21-101F1 and the Exhibits Thereto attached as Appendices to its recognition orders (the Protocol). CNSX Markets Inc. (CSE) has proposed, and the Ontario Securities Commission and British Columbia Securities Commission have approved Public Interest Rule Amendments under the Protocol (the "Amendments") to CSE Listing Policies (Policies) to introduce an approval requirement for Major Acquisitions and broaden the application of its definition in the Policies.
On July 17, 2025, CSE published Notice 2025-004 -- Proposed Amendments to CSE Listing Policies -- Notice and Request for Comments. With the implementation of these Amendments, CSE will introduce a specific approval process for a re-defined 'Major Acquisition' that is separate and apart from the process applicable to a Fundamental Change. A Listed Issuer intending to complete a Major Acquisition, based on the proposed re-definition, would need to obtain approval from the Exchange before completion of the transaction. It would exclude Major Acquisitions from the existing deemed approval process.
The comment period ended on August 16, 2025. CSE received no comments.
The Amendments will take effect immediately.
Questions about this notice may be directed to:
Cboe Canada Inc. -- Proposed Significant Change and Fee Change to Cboe Canada Inc.'s Form 21-101F1 -- Dedicated Cores -- Request for Comments
Cboe Canada Inc. (Cboe Canada or the Exchange) is publishing two proposed changes (the Significant Change subject to Public Comment and theFee Change subject to Public Comment) to Cboe Canada's Form 21-101F1 (the F1) in accordance with the Process for the Review and Approval of Rules and the Information Contained in Form 21-101F1 and the Exhibits Thereto (the Exchange Protocol), which is attached as Schedule 4 to the Exchange's recognition order, as amended. The Significant Change subject to Public Comment and the Fee Change subject to Public Comment were filed with the Ontario Securities Commission (the OSC) and are hereby being published for comment. A description of the Significant Change subject to Public Comment and of the Fee Change subject to Public Comment are set out below.{1}
The Exchange is proposing to offer Members{2} a new optional connectivity service known as Dedicated Cores. Historically, and up until the present day, on the Cboe Canada exchange, Central Processing Units (CPU Cores) have been shared by Members' logical order entry ports (i.e., multiple logical ports that are respectively associated with multiple Member firms may connect to a single CPU Core at any given time during the trading day). The introduction of Dedicated Cores will allow a Member to assign its selected individual Binary Order Entry (BOE) logical order entry ports{3} to a single dedicated CPU Core (or Dedicated Core).{4} Use of Dedicated Cores can provide reduced latency, enhanced throughput, and improved performance, since a Member using a Dedicated Core is utilizing the full processing power of that CPU Core, instead of sharing that power with other Members. This offering is completely voluntary and will be available to all Members.{5}
Members will also continue to have the option to utilize BOE logical order entry ports on shared CPU Cores as they do today, either in lieu of, or in addition to, their use of Dedicated Core(s). As such, Members will be able to operate across a mix of shared and dedicated CPU Cores, which the Exchange believes provides additional risk and capacity management, especially during times of market volatility and high message traffic. Dedicated Cores are not required for any Member, nor are they necessary to participate on the Exchange, and as such, Members may opt not to use Dedicated Cores at all.
The following diagram illustrates how Dedicated Cores will fit into the order handling process:
Note that Dedicated Cores will not affect in any way Cboe Canada's Multicast PITCH market data feed (which is how real-time market data from Cboe Canada is simultaneously transmitted to market data recipient customers and the Information Processor), including, in particular, the speed of data transmission via the Multicast PITCH market data feed.
The Significant Change subject to Public Comment will result in the addition of one new sentence describing Dedicated Cores in a required (confidential) exhibit that is part of the F1.
The Exchange is seeking to implement this Significant Change subject to Public Comment on or around February 2, 2026.
As noted above, CPU Cores have historically been shared by logical order entry ports (i.e., multiple logical ports that are respectively associated with multiple Member firms may connect to a single CPU Core at any given time during the trading day). Use of Dedicated Cores can provide reduced latency, enhanced throughput, and improved performance, since a Member using a Dedicated Core is utilizing the full processing power of that CPU Core instead of sharing that power with other Members.
The use of Dedicated Cores is not necessary for trading and, as noted above, is entirely optional. Indeed, Members will be able to continue to conduct order entry on the Exchange through shared CPU Cores at no additional cost, and the Exchange expects some Members to do just that. Depending on a Member's specific business needs, the Member may choose to use Dedicated Cores in lieu of, or in addition to, shared CPU Cores (or as noted above, not use Dedicated Cores at all). The Exchange believes the proposal to operate across a mix of shared and dedicated CPU Cores may further provide additional risk and capacity management.
The Exchange has no current plans to eliminate shared CPU Cores, nor require subscription to the Dedicated Cores offering. By maintaining the existing shared CPU Cores alongside the new optional Dedicated Cores, the Exchange expects that all Members will benefit, insofar as those opting to use Dedicated Cores will receive the benefits of Dedicated Cores noted above (reduced latency, enhanced throughput, and improved performance), while those opting to continue using the shared CPU Cores will also experience benefits of reduced latency, enhanced throughput, and improved performance relative to today, given the diversion of some order message traffic from the shared CPU Cores to the Dedicated Cores.
The impact on market structure, Members, investors, issuers, and capital markets is expected to be neutral to positive, given the benefits expected for all Members (not just those that elect to use Dedicated Cores) in terms of reduced latency, enhanced throughput, and improved performance.
The proposed change will have no impact on Cboe Canada's continuing compliance with Ontario securities law, including requirements for fair access and the maintenance of fair and orderly markets. As noted above, Dedicated Cores are a purely optional connectivity offering that will be made available to all Members, and their adoption is expected to ultimately benefit all Members, not just those that elect to use them.
The proposed change was reviewed and approved by the Exchange's Executive Committee, and the Regulatory Oversight Committee of the Exchange's board of directors will receive an update regarding the change at its next meeting.
Making use of Dedicated Cores is voluntary. For Members that elect to use Dedicated Cores, Cboe Canada believes that a reasonable estimate of the time needed to modify these Members' systems is approximately 60 days, based on the experiences of Cboe Canada's affiliates around the globe in connection with the establishment of similar offerings for their respective clients.
The Exchange considered not offering Dedicated Cores at all. No other alternatives were considered.
Dedicated Cores would be a new functionality among Canadian marketplaces. However, Dedicated Cores are already in use around the globe on marketplaces operated by affiliates of Cboe Canada located in the United States, the United Kingdom, Europe, and Australia. See, for example, the following notices:
• U.K. and European affiliates: https://cdn.cboe.com/resources/release_notes/2024/UPDATE-Cboe-UK-and-Cboe-NL-Dedicated-Cores-notice.pdf; and
• Australian affiliate: https://cdn.cboe.com/resources/market_operations_notice/Market-Operations-Notice-0006-24.pdf.
See also https://www.marketsmedia.com/cboe-reduces-latency-on-us-equities-exchanges-by-60/.
In addition, in the United States, a competitor of Cboe Canada's U.S. affiliates offers a connectivity feature that is similar to Dedicated Cores. See, e.g., The Nasdaq Stock Market's "Dedicated OUCH" service, as described at https://www.nasdaqtrader.com/Trader.aspx?id=OUCH.
The Exchange proposes the following new fees for Dedicated Cores:
• the first Dedicated Core for each Member will be free of charge; and
• each additional Dedicated Core for each Member will cost $600 per month.
There will be no set-up fees for Dedicated Cores. However, regardless of when the Member chooses to set up each new Dedicated Core (after the first free Dedicated Core), the Exchange will bill the Member for the full monthly amount for the first month; no proration will apply.
The Fee Change subject to Public Comment will result in the following text being added to section 2 of the Fee Schedule:
DEDICATED CORES
SERVICE OPTION
ONE-TIME FEE
MONTHLY FEE
1 Dedicated Core
$0
$0
Each Add'l Dedicated Core
$0
$600
Dedicated Cores are an optional feature that allows a client to assign its selected BOE Order Entry Sessions to a single dedicated Central Processing Unit (CPU) core (i.e., a "Dedicated Core"). The monthly fees are assessed and applied in their entirety and are not prorated.
The Exchange is seeking to implement this Fee Change subject to Public Comment on or around February 2, 2026.
The proposed monthly fee (CAD $600) was arrived at by taking into consideration the range of monthly fees charged by Cboe Canada's U.S. affiliates for Dedicated Cores currently being offered by those affiliates to clients in the U.S. (which range starts at USD $650 per Dedicated Core per month and rises to USD $1,050 per month, depending on the total number of Dedicated Cores selected by a client), see Cboe U.S. Equities Fee Schedules, available at https://www.cboe.com/us/equities/membership/fee_schedule/ (under the heading "Dedicated Cores"), and applying a discount to the fee that applies at the lowest end of that range.
We expect the proposed Fee Change subject to Public Comment will have no material impact on market structure, investors, and the capital markets as a whole. As for the impact on Members, given that the new service is purely optional, the impact is expected to be marginal because (1) there will be no cost impact whatsoever on Members that choose to use only one Dedicated Core or none at all, and (2) the direct benefits that will inure to Members that choose to use two or more Dedicated Cores are expected to more than outweigh the costs to those Members (as otherwise, such Members would not have made the choice to take on two or more Dedicated Cores in the first place).
Because the proposed Fee Change subject to Public Comment pertains to a service that is purely optional, does not create any new fee structure within Canada, and introduces only a relatively modest monthly fee (in the context of the existing monthly connectivity fees already being paid by Members of the Exchange), no impact on compliance with fair access requirements or fair and orderly markets is expected.
The proposed fee was reviewed and approved by the Exchange's Executive Committee, and the Regulatory Oversight Committee of the Exchange's board of directors will receive an update regarding the proposed fee at its next meeting.
1. Expected number of marketplace participants likely to be subject to the new fee and a description of the costs.
The Exchange expects approximately 10% of our Members to choose to be subject to the proposed fee (which is described above, under the heading "Description of the Proposed Fee Change subject to Public Comment").
2. If the proposed Fee Change subject to Public Comment applies differently across types of marketplace participants, a description of this difference, how it impacts each class of affected marketplace participant, including, where applicable, numerical examples, and any justification for the difference in treatment.
The proposed Fee Change subject to Public Comment will apply equally to all Members.
Not applicable.
The Exchange considered not offering the first Dedicated Core free of charge; we also considered charging a progressively higher fee based on the total number of Dedicated Cores that a given Member elected to use. However, we ultimately decided on a flat monthly per-core fee, with the first Dedicated Core offered free of charge, as we felt that this approach optimized fair access and fair and orderly markets.
The proposed Fee Change subject to Public Comment will not introduce a new fee model. The proposed Fee Change subject to Public Comment represents a conventional monthly fee for an optional connectivity service. This fee type (a flat, per-item monthly fee) is entirely consistent with the industry standard for connectivity services in general and, as such, the fee presents nothing novel whatsoever. The new fee is simply designed to provide a fair amount of compensation to the Exchange for the cost of providing the new optional service, which does indeed exist in other jurisdictions. (See section I above, under the heading "New Feature or Rule," for details.)
We would also note that Dedicated Cores would be a connectivity or "access" service that pertains exclusively to a Member's own order or trade information, submitted or received by the Member via the Exchange's order handler systems; as such, this "order handler" data does not constitute "order and trade information that is distributed immediately after an order has been entered, amended, or cancelled or a trade has been executed"-in other words, in the Exchange's view, such data does not come within the definition of "real-time market data" (or RTMD) as contemplated by the Canadian Securities Administrators (the CSA). See CSA Consultation Paper 21-403 -- Access to Real-Time Market Data, s. 3.1 ("Marketplaces are the sole producers of RTMD relating to the orders placed and trades executed on their own facilities. By and large, marketplaces offer RTMD market data via feeds (also known as marketplace direct feeds [...].") (emphasis added); see also ibid., s. 3.3 ("Marketplaces charge a variety of fees for access and use of RTMD. These fees may vary based on how RTMD is accessed (i.e., directly from the marketplace or indirectly through a data vendor or the IP), whether the RTMD is redistributed (either internally or externally), the nature of the end-use/end-user (e.g., human versus machine), and the depth of the RTMD received or used (i.e., Level 1 or Level 2). In the case of RTMD feeds, how the feed is accessed may impact the fees charged and who is responsible for those fees.") For greater certainty, we note that the "order handler" data that would be submitted or received by a Member through a Dedicated Core is not subject to any fee, and it is distinct from the data that is immediately thereafter distributed by the Exchange, for a fee (in most cases), via a "marketplace direct feed" (aka the "PITCH multicast" feed-which is itself subject to a fee, per section 2 of the existing Fee Schedule). Consequently, in the Exchange's view, the requirement to publish for comment each Real-Time Market Data Fee Change, as provided for in paragraph 7(a)(ii) of the Exchange Protocol (and which requirement is currently scheduled to expire on October 23, 2025) does not apply to this Fee Change.
Comments should be provided, in writing, no later than November 3, 2025, to:
Joacim WiklanderChief Executive Officer and PresidentCboe Canada Inc.65 Queen Street WestSuite 1900Toronto, ON M5H 2M5jwiklander@cboe.comwith a copy to:
Trading & Markets DivisionOntario Securities Commission20 Queen Street West22nd FloorToronto, ON M5H 3S8TradingandMarkets@osc.gov.on.ca
Please note that, unless confidentiality is requested, all comments will be publicly available.
{1} In the event that the Significant Change subject to Public Comment and the corresponding Fee Change subject to Public Comment are approved, advance written notice of the new fee, as described in the Fee Change subject to Public Comment set out below, will be provided to clients in accordance with the terms of the Exchange's Connectivity Services Agreement, and a revised version of the Connectivity Services Fee Schedule (the Fee Schedule), reflecting the new monthly fee and a planned "housekeeping" change to section 1 of the Fee Schedule, will be published by the Exchange on its website on or before implementation.
{2} Capitalized terms used but not defined herein are as defined in Section 1.01 of the Exchange's trading rules (the Trading Policies). Please note that the Exchange has used the word "Member" throughout this Request for Comments, as the Exchange anticipates that, in practice, Members are the type of Exchange client most likely to be interested in using Dedicated Cores. However, any party that has entered into a Connectivity Services Agreement with the Exchange could theoretically purchase Dedicated Cores, if this service is approved, and that would include third-party access vendors and DEA Clients. As such, unless the context indicates otherwise, the word "Member" should be interpreted as "Customer" as that word is understood in the Connectivity Services Agreement (which is published within the "Agreements" tab of the "Document Library" page of the Exchange's website at https://www.cboe.com/ca/equities/support/agreements/).
{3} Members may currently connect to the Exchange using a logical port available through an application programming interface (API), such as the BOE protocol. A BOE logical order entry port is used for order entry. The Exchange also offers Members the option to use FIX logical order entry ports; those ports are unaffected by the proposed Dedicated Cores offering discussed herein.
{4} The Exchange notes that Members will not have physical access to their Dedicated Core(s) and thus will not be able to make any modifications to any Dedicated Core or server directly. All Dedicated Cores (including servers used for this service) will be owned and operated by the Exchange.
{5} Please see section II for details regarding the new fee for Dedicated Cores.
Reeflex Solutions Inc. -- s. 21(b) of Ont. Reg. 398/21 of the OBCA
Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Business Corporations Act (Alberta).
Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.
Securities Act, R.S.O. 1990, c. S.5, as am.
Regulation made under the Business Corporations Act, Ont. Reg. 398/21, as am., s. 21(b).
UPON the application (the Application) of Reeflex Solutions Inc. (the Applicant) to the Ontario Securities Commission (the Commission) requesting the consent of the Commission pursuant to subsection 21(b) of the Regulation for the Applicant to continue into the Province of Alberta pursuant to section 181 of the OBCA (the Continuance);
AND UPON considering the Application and the recommendation of the staff of the Commission;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant is an offering corporation under the OBCA.
2. The Applicant was incorporated under the laws of Ontario on November 25, 2020 under the name "Bigstack Opportunities I Inc.". On May 15, 2025, the Applicant changed its name to "Reeflex Solutions Inc." in connection with the successful completion of its "Qualifying Transaction" with Reeflex Coil Solutions Inc., pursuant to TSX Venture Exchange (TSXV) Policy 2.4 -- Capital Pool Companies.
3. The authorized capital of the Applicant consists of an unlimited number of common shares (Common Shares), of which 46,401,501 Common Shares were issued and outstanding as of September 12, 2025. All of the issued and outstanding Common Shares of the Applicant are listed for trading on the TSXV under the ticker "RFX".
4. The Applicant intends to apply to the Director under the OBCA pursuant to Section 181 of the OBCA (the Application for Continuance) for authorization to continue into the Province of Alberta under the Business Corporations Act (Alberta), RSA 2000, c B-9 (the ABCA).
5. The board of directors of the Applicant (the Board) has submitted that the principal reason for the Continuance is to improve the Applicant's administration and efficiency, as the Applicant's head office and the majority of the Applicant's assets, operations and employees are located in Alberta, and the Applicant is traded solely on the TSXV.
6. The Applicant is a reporting issuer under the Securities Act (Ontario), R.S.O. 1990, c. S.5, as amended (the Act) and the securities legislation of Alberta and British Columbia (together with the Act, the Legislation). The Applicant will remain a reporting issuer in the provinces of Ontario, Alberta and British Columbia, following the Continuance.
7. The Applicant is not in default of any provision of the OBCA or the Legislation, including the regulations made thereunder.
8. The Applicant is not in default of any provision of the rules, regulations or policies of the TSXV.
9. The Applicant is not subject to any proceeding or, to the best of its knowledge, information and belief, any pending proceeding, under the OBCA or the Legislation.
10. The Commission is the principal regulator of the Applicant. Following the Continuance, it is anticipated that the principal regulator of the Applicant will be the Alberta Securities Commission.
11. Following the Continuance, the Applicant's head office will be relocated to 5475 -- 56 Avenue SE, Calgary, Alberta, T2C 3X6.
12. The Common Shares of the Applicant will continue to be listed on the TSXV following the Continuance.
13. The Applicant's management information circular dated July 18, 2025 (the Circular) which was provided to all shareholders of the Applicant in connection with its annual and special meeting of shareholders held on August 29, 2025 (the Meeting) described the proposed Continuance and disclosed the reasons for it and its implications. The Circular was mailed to shareholders of record at the close of business on July 25, 2025 and was filed electronically on SEDAR+ on July 31, 2025.
14. The Applicant's shareholders had the right to dissent with respect to the proposed Continuance pursuant to section 185 of the OBCA, and the Circular disclosed particulars of this right in accordance with applicable law.
15. The Applicant's shareholders authorized the Continuance at the Meeting by a special resolution that was approved by 100% of the votes cast. No shareholder exercised dissent rights pursuant to section 185 of the OBCA.
16. The material rights, duties and obligations of a corporation governed by the ABCA are substantially similar to those of a corporation governed by the OBCA.
17. Subsection 21(b) of the Regulation requires the Application for Continuance to be accompanied by a consent from the Commission.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
THE COMMISSION CONSENTS to the Continuance of the Applicant under the ABCA.
DATED at Toronto, Ontario this 26th day of September, 2025.
OSC File #: 2025/0548