Coxe Commodity Strategy Fund

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- exemption from National Instrument 81-106 Investment Fund Continuous Disclosure to permit an investment fund that uses specified derivatives to calculate its NAV on a weekly basis subject to certain conditions -- relief required from the requirement that an investment fund that uses specified derivatives calculate its NAV daily.

Applicable Legislative Provisions

National Instrument 81-106 Investment Fund Continuous Disclosure, s. 14.2(3)(b).

May 1, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

COXE COMMODITY STRATEGY FUND

(the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the "Legislation") for relief from Section 14.2(3)(b) of National Instrument 81-106 ("NI 81-106"), which requires the net asset value of an investment fund that uses specified derivatives (as such term is defined in National Instrument 81-102) to be calculated at least once every business day (the "Exemption").

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 Multinational Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in the jurisdictions of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon Territory and Nunavut.

Interpretation

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

Representations

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

1. The Filer is a non-redeemable investment fund (as defined in NI 81-106) to be established under the laws of the Province of Ontario pursuant to a declaration of trust. BMO Nesbitt Burns Inc. (the "Administrator") is the administrator of the Filer. The principal office of the Filer and the Administrator is located at 1 First Canadian Place, 100 King Street West, 4th Floor, P.O. Box 150, Toronto, Ontario M5X 1H3.

2. Donald G.M. Coxe (the "Portfolio Consultant" or "Mr. Coxe") is the portfolio consultant to the Filer. Harris Investment Management, Inc. ("Harris") has been retained to implement the Filer's investment strategy. The Administrator will be responsible for the management and administration of the Filer. Decisions as to the purchase of securities and all other portfolio transactions will be made by Harris in consultation with the Portfolio Consultant.

3. The Filer is authorized to issue an unlimited number of Combined Class A Units and Combined Class F Units (collectively, "Combined Units"). Each Class A Combined Unit consists of one Class A Unit and one transferable Warrant for one Class A Unit. Each Class F Combined Unit consists of one Class F Unit and one transferable Warrant for one Class F Unit. The Class A Units and the Class F Units together are referred to herein as the "Units". The Filer will offer Combined Units under a prospectus. The Class F Units will not be listed on a stock exchange.

4. The Fund filed a preliminary prospectus in each of the provinces and territories of Canada on April 10, 2008 (SEDAR Project No. 1247037).

5. The Filer has been created to provide investors with long-term capital growth by executing the commodity investment strategies of the Portfolio Consultant.

6. The net proceeds from the offering of Combined Units will be invested in an actively managed portfolio (the "Portfolio") consisting primarily of equity securities. The Filer will provide exposures to commodity-related securities that approximate target weightings established for the Fund from time to time by Mr. Coxe in the agriculture, base metals & steel, energy and precious metals sectors. The Portfolio is expected to be well-diversified within these sectors and to consist primarily of exchange-traded equities, but may contain debt securities, cash and/or cash equivalents.

7. The Filer may be exposed to a number of different currencies and does not currently intend to hedge its foreign currency exposure. However, from time to time, up to 100% of the value of the Portfolio's non-Canadian currency exposure may be hedged back to the Canadian dollar. The Filer does not intend to borrow money or employ other forms of leverage to acquire securities for the Portfolio.

8. Although the Filer will be a mutual fund trust for purposes of the Income Tax Act (Canada), it will not be a mutual fund for purposes of securities legislation and its operation will differ from that of a conventional mutual fund as follows:

(a) The Filer does not intend to continuously offer Units once the Filer is out of primary distribution.

(b) The Class A Units are expected to be listed and posted for trading on the Toronto Stock Exchange (the "TSX"). As a result, Class A Unitholders will not have to rely solely on the redemption features of the Class A Units (as described in the Preliminary Prospectus) in order to provide liquidity for their investment. The Class F Units will be convertible into Class A Units and, like the Class A Units, can be redeemed on a monthly basis.

9. Commencing in 2009, Units may be surrendered for redemption on any business day during the period from the first day of September until 5:00 p.m. (Toronto time) on the last business day prior to the 16th day of September in each year (the "Notice Period") subject to the Fund's right to suspend redemptions in certain circumstances. Units properly surrendered for redemption during the Notice Period will be redeemed on the last business day of September of each year (the "Annual Redemption Date") and the Unitholder will receive payment on or before the 15th day following the Annual Redemption Date. Redeeming Unitholders will receive a redemption price per Unit equal to the applicable NAV per Unit less any costs and expenses incurred by the Fund in order to fund such redemption.

10. In addition, Units of each class may be surrendered for redemption in any month. Units properly surrendered for redemption by a Unitholder on any business day during the period from the first day of a month until 5:00 p.m. (Toronto time) on the last business day prior to the 16th day of such month will be redeemed on the last business day of that month ("Monthly Redemption Date") and the Unitholder will receive payment on or before the 15th business day following such Monthly Redemption Date, subject to the Fund's right to suspend redemptions. A holder of Class A Units who properly surrenders Class A Units for redemption will receive the amount (the "Monthly Redemption Amount") equal to the lesser of (A) 96% of the weighted average trading price of the Class A Units on the TSX during the 15 trading days preceding the applicable Monthly Redemption Date, and (B) the "closing market price" of the Class A Units on the principal market on which the Class A Units are quoted for trading. A Class F Unitholder who surrenders a Class F Unit for a monthly redemption will receive an amount equal to the product of (i) the Monthly Redemption Amount and (ii) a fraction, the numerator of which is the most recently calculated NAV per Class F Unit and the denominator of which is the most recently calculated NAV per Class A Unit.

11. The basic NAV and diluted NAV, which would reflect the effect the exercise of the outstanding warrants would have on the basic NAV, and NAV per Unit of each class will be made available at no cost on a weekly basis on a website established for such purpose.

Decision

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 relating to investment fund continuous disclosure is granted provided that:

(a) the net asset value calculation is available to the public upon request; and

(b) the public has access to a website for this purpose;

for so long as:

(c) the Class A Units are listed on the TSX; and

(d) the Fund calculates its net asset value at least weekly.