Securities Law & Instruments


National Policy 11-203 -- relief from mutual fund self-dealing prohibitions granted to permit pooled funds to continue to hold securities of issuers that will become substantial securityholders of the funds' management company and securities of an issuer that will be an issuer in which a substantial securityholder of the management company has a significant interest as a result of a change in control of the management company -- investments in the relevant issuers made prior to change in control of the management company --Securities Act (Ontario).

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss.111(3), 113.

June 27, 2008




(the Jurisdiction)













The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption from the self dealing restrictions with respect to investments of mutual funds (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 Filers have 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 and Quebec.


Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.


This decision is based on the following facts represented by the Filers:

1. Aurion Capital Management Inc. (Aurion) is registered as an investment counsel and portfolio manager in Ontario, Alberta, Nova Scotia and the Northwest Territories, and is registered as an adviser in Quebec. Aurion is also registered as a limited market dealer in Ontario.

2. The Aurion II Equity Fund (the Aurion Fund) and the Aurion Canadian Equity Fund (the Shell Fund) (together the Funds) are not reporting issuers but each is a "mutual fund in Ontario" as defined in the Legislation.

3. The Shell Fund is one of thirteen pooled funds operated by Aurion for pension and savings plans of Shell Canada Limited (collectively, the Shell Pension Pools). The units of the Shell Pension Pools may only be purchased by pension plans of Shell Canada Limited.

4. Aurion is the manager, investment adviser and principal distributor of the Funds. Its head office is located in Ontario.

5. The Filers are not in default of securities legislation in any jurisdiction.

6. On May 1, 2008 DundeeWealth Inc. (DW), a reporting issuer, Aurion and the shareholders of Aurion entered into a binding letter of intent pursuant to which DW agreed to acquire, and the shareholders agreed to sell, 60% of the outstanding shares of Aurion in exchange for cash and common shares of DW (the Transaction). Aurion employees would continue to own 40% of Aurion.

7. Dundee Corp. (DC) is a reporting issuer and owns, directly and indirectly, approximately 60% of the voting securities of DW. As a result, after the closing of the Transaction, both DW and DC will be substantial security holders of Aurion as defined in the Legislation.

8. Breakwater Resources Ltd. (Breakwater) is a reporting issuer in which DC has a significant interest as defined in the Legislation. DC holds, directly and indirectly, approximately 25.4% of the outstanding common shares of Breakwater.

9. The Shell Pension Pools are multi-manager funds. Aurion is the adviser for each Shell Pension Pool but each of the Shell Pension Pools may also have one or more sub-advisers (the Sub-Advisors) who manage all or part of the portfolio of each Shell Pension Pool. In practice, no Sub-Adviser is hired or terminated by Aurion without the explicit approval of the Shell Canada pension management group. The Sub-Advisers function independently and Aurion does not have access to information concerning the intentions of Sub-Advisers with respect to individual investments.

10. Aurion is responsible for managing part of the portfolio of the Shell Fund, and in that capacity has invested assets of the fund in shares of DC, DW and Breakwater.

11. The Aurion Fund currently holds shares of DW. This investment represents approximately 1.73% of the net asset value of the Aurion Fund and approximately 0.05% of DW shares outstanding.

12. The Shell Fund currently holds (a) shares of DW representing approximately 1.37% of the net asset value of the Shell Fund and approximately 0.41% of DW shares outstanding, (b) shares of DC representing approximately 0.17% of the net asset value of the Shell Fund and approximately 0.09% of DC shares outstanding, and (c) shares of Breakwater representing approximately 0.28% of the net asset value of the Shell Fund and approximately 0.55% of Breakwater shares outstanding.

13. At the time Aurion invested assets of the Funds in shares of DW, DC and Breakwater (as applicable), none of the Filers was related to DW, DC or Breakwater. Following execution of the binding letter of intent on May 1, 2008, the Funds have not made any investment in DW, DC or Breakwater.

14. Aurion intends for the Funds to continue to hold some or all of their existing investments in DW, DC and Breakwater after the closing of the Transaction and for the foreseeable future. A forced disposition of such investments prior to the closing of the Transaction in order to comply with the Legislation could expose the Funds to potential losses and would not be in the best interests of the Funds.

15. Upon closing of the Transaction, the Funds will be invested in two companies (DW and DC) that are substantial security holders (as defined in the Legislation) of Aurion (which is the management company of the Funds), and one company (Breakwater) in which a substantial security holder of Aurion has a significant interest (as defined in the Legislation). Absent the Exemption Sought, the Legislation would require that the Funds dispose of these investments before the closing of the Transaction.

16. The investments in and holding of securities of DW, DC and Breakwater by the Funds are consistent with the investment objectives of the Funds and represent the business judgment of Aurion uninfluenced by considerations other than the best interests of the Funds.


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 for the Aurion Fund and the Shell Fund to continue to hold their respective investments in securities of DW, DC and Breakwater beyond the date of closing of the Transaction.

"Paulette Kennedy"
Ontario Securities Commission
"Paul Bates"
Ontario Securities Commission