Caldwell Investment Management Ltd. et al.

Headnote

One time trade of securities between pooled funds, both advised by the same portfolio manager and investment counsel, to implement a reorganization -- sale of securities exempt from the self-dealing prohibitions in paragraph 118(2)(b) of the Securities Act (Ontario) and subsection 115(6) of the General Regulation to the Securities Act (Ontario) -- transaction approved by unitholders in accordance with constating document -- all costs of the transaction to be borne by the manager.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 118(2)(b), 121(2)(a)(ii), 147.

Ontario Regulation 1015 -- General Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., s. 115(6).

November 21, 2008

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5 AS AMENDED

(the "Act")

AND

IN THE MATTER OF

CALDWELL INVESTMENT MANAGEMENT LTD.

(the "Filer")

AND

IN THE MATTER OF

CALDWELL ICM NEW YORK LP

(the "Partnership")

AND

IN THE MATTER OF

CALDWELL ICM MARKET STRATEGY TRUST

(the "Fund")

ORDER

Background

The Ontario Securities Commission (the "Commission") has received an application from the Filer for a decision under the Act for relief from:

(i) subsection 118(2)(b) of the Act, which prohibits a portfolio manager from causing any investment portfolio managed by it to purchase or sell the securities of any issuer from or to the account of a "responsible person" (as defined in the Act), or an associate of a responsible person or the portfolio manager; and

(ii) subsection 115(6) of Regulation 1015 under the Act, which prohibits a purchase or sale of any security in which an investment counsel or any partner, officer or associate of an investment counsel has a direct or indirect beneficial interest to be made from or to any portfolio managed or supervised by the investment counsel

in connection with the purchase (the "Purchase") of all of the assets of the Partnership (the "Partnership Assets") by the Fund in exchange for Series A units of the Fund (the "Fund Units") (the "Requested Relief").

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.

Representations

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

The Partnership

1. The Partnership was established pursuant to a limited partnership agreement dated as of November 8, 2005, as amended and restated as of December 29, 2006 (the "LP Agreement"). The registered office of the Partnership is located in Toronto, Ontario.

2. The Partnership is not a reporting issuer in any jurisdiction in Canada.

3. Caldwell New York General Partner VI Ltd. is the general partner (the "General Partner") of the Partnership. The General Partner was incorporated under the laws of Ontario on November 8, 2005. The head office, registered office and principal business address of the General Partner is located in Toronto, Ontario.

4. The Partnership's investment objective is to achieve long-term capital appreciation by purchasing memberships on the New York Stock Exchange or securities of any entity that is a successor in interest of the undertaking of the New York Stock Exchange.

5. As at September 30, 2008, the net asset value of the Partnership was $3,218,752.83.

The Filer

6. The Filer was incorporated under the laws of Ontario on August 23, 1990. The head office, registered office and principal business address of the Filer is located in Toronto, Ontario.

7. The Filer is registered as an advisor under the Act in the categories of "investment counsel" and "portfolio manager".

8. The Filer acts as manager and portfolio advisor of the Partnership.

The Fund

9. The Fund is an open-end mutual fund trust established pursuant to a declaration of trust dated January 20, 2007 (the "Declaration of Trust").

10. The Fund is not a reporting issuer in any jurisdiction in Canada.

11. The Fund's investment objective is to generate long-term capital growth through both traditional and non-traditional investments and strategies. The Fund's investment strategies include, inter alia, acquiring indirectly interests in memberships and seats on private securities exchanges globally.

12. Pursuant to the Declaration of Trust, the Filer acts as the trustee, manager and portfolio advisor of the Fund. The Filer is responsible for the management of the Fund's investment portfolio as well as the day-to-day administration of the Fund. The Fund is an "associate" (as defined in the Act) of the Filer as the Filer is the trustee of the Fund.

13. As at October 31, 2008, the net asset value of the Fund was $13,496,127.08.

The Purchase

14. The Filer proposes to sell the Partnership Assets to the Fund for an amount equal to the value of the Partnership Assets to be satisfied by the Fund (i) as to an amount equal to the liabilities of the Partnership, by the assumption of such liabilities, and (ii) as to the balance (the "Balance"), by the issuance of Fund Units having an aggregate net asset value equal to the Balance. The Partnership Assets consist of shares of the NYSE Euronext and units of an investment fund managed by the Filer.

15. The transfer of the Partnership Assets and the issuance of Fund Units will be based on the relative net asset value of the Partnership and the Fund. The Fund and the Partnership have substantially similar valuation procedures and the Partnership Assets will be valued as if they were portfolio assets of the Fund. The Fund Units to be issued to the Partnership in satisfaction of the Balance will be issued at the net asset value per unit of the Fund determined on the effective date of the Purchase.

16. The Purchase is subject to prior approval by holders of units ("LP Units") of the Partnership (the "Partnership Unitholders") holding LP Units with an aggregate net asset value of 66 2/3% or more of the net asset value of the Partnership. Approval of the Partnership Unitholders will be sought in accordance with the LP Agreement. If such approval is obtained, the Purchase is anticipated to be effected on or about February 28, 2009. Approval of the Purchase by the unitholders of the Fund is not required under the Declaration of Trust.

17. The Purchase will be conducted on a taxable basis to the Partnership Unitholders. There will not be any adverse tax consequences to the unitholders of the Fund.

18. Following the completion of the Purchase, the Partnership will be subsequently dissolved (the "Dissolution"), resulting in the distribution of such Fund Units to the Partnership Unitholders and General Partner in accordance with their respective interests.

19. Upon the completion of the Dissolution, Partnership Unitholders will become unitholders of the Fund. The Filer believes that the Purchase will benefit Partnership Unitholders because the Fund will offer the following significant enhancements over the Partnership:

(i) the Fund has a more diversified portfolio of assets than the Partnership;

(ii) the Fund offers Fund Units on a continuous basis, whereas the Partnership does not;

(iii) Fund Units are redeemable monthly with 15 days' notice, whereas LP Units are only redeemable on a quarterly basis with 90 days' notice; and

(iv) the portfolio of the Fund is managed on an active basis, whereas the portfolio of the Partnership is managed on a passive basis.

20. The Purchase will benefit the Fund because the Purchase will substantially increase the size of the Fund and thus assist in lowering the expense ratio of the Fund as fixed cost expenses are spread out over a larger asset base.

21. Neither the Fund nor the Partnership will be charged a commission on the trade of the Partnership Assets from the Partnership to the Fund. The Filer will bear all the expenses related to the Purchase.

22. Unless the Requested Relief is granted, the Filer would be prohibited by subsection 118(2)(b) of the Act from knowingly causing the Fund to purchase the Partnership Assets from the Partnership.

23. Unless the Requested Relief is granted, the Purchase will be prohibited by subsection 115(6) of Regulation 1015 under the Act because the purchase of the Partnership Assets by the Fund would be a purchase of securities from a portfolio managed or supervised by the Filer.

Decision

The Commission is satisfied that the test contained in the Act that provides the Commission with the jurisdiction to make the decision has been met.

The decision of the Commission under the Act is that the Requested Relief is granted.