Securities Law & Instruments


Mutual Reliance Review System for Exemptive Relief Applications - Investment by mutualfunds in securities of another mutual fund that is under common management for specifiedpurposes excepted from the requirements of section 101, clause 111(2)(b), andsubsection 111(3), clauses 117(1)(a) and (d), subject to certain specified conditions.

Statutes Cited

Securities Act (Ontario), R.S.O., c.S.5, as am. ss. 101, 104(2)(c), 111(2)(b), 111(3), 113,117(1)(a), 117(1)(d) and 117(2).








WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application (the"Application") from Guardian Group of Funds Ltd. (the "Manager") in its own capacity and onbehalf of Guardian RSP Technology Fund (the "RSP Fund") and Guardian Global TechnologyFund (the "Underlying Fund") for a decision pursuant to the securities legislation of theJurisdictions (the "Legislation") that, if applicable, the following requirements and restrictionscontained in the Legislation (the "Requirement(s)") shall not apply in respect of certaininvestments to be made by the RSP Fund in the Underlying Fund:

A. the Requirements that the RSP Fund and Manager issue a news release and file areport where the aggregate holdings by the RSP Fund of the Underlying Fund's unitsexceed 10% of the Underlying Fund's outstanding units and the Requirement to refrainfrom acquiring or offering to acquire the Underlying Fund's units pending the expirationof one business day from the date the report is filed;

B. the Requirements that the Manager file a report relating to the purchase or sale ofsecurities between the RSP Fund and any related person or company, or anytransaction in which, by arrangement other than an arrangement relating to insidertrading and portfolio securities, the RSP Fund is a joint participant with one or moreof its related persons or companies;

C. the Requirement prohibiting the RSP Fund from knowingly making or holding aninvestment in a person or company in which the mutual fund, alone or together withone or more related mutual funds, is a substantial security holder;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principal regulator forthis Application;

AND WHEREAS the Manager has represented to the Decision Makers that:

1. The Manager is a corporation amalgamated under the laws of Canada and will be themanager, trustee and promoter of the RSP Fund and is the manager, trustee andpromoter of the Underlying Fund (collectively, the "Funds"). The Manager's headoffice is located in Toronto, Ontario.

2. The Underlying Fund is an open-end mutual fund trust established under the laws ofOntario and is qualified for distribution in all Jurisdictions under a simplified prospectusand annual information form. The RSP Fund will be an open-end mutual fund trustand will be qualified for distribution in all Jurisdictions under a simplified prospectusand annual information form.

3. The Underlying Fund is, and the RSP Fund will be, a reporting issuer under thesecurities laws of each of the provinces and territories of Canada. The UnderlyingFund is not in default of the Legislation.

4. The RSP Fund's prospectus and annual information form and any renewal prospectuswill contain disclosure with respect to its investment objective and investmentpractices and restrictions. The RSP Fund's investment objective is to achieve longterm growth that is linked to the Underlying Fund's return by investing in cash andbank deposits, money market instruments and other securities, and by using forwardcontracts or other permitted derivatives based on a specific group of securities basedon the Underlying Fund's portfolio or units. As part of its investment practice, theRSP Fund intends to invest in the Underlying Fund's units.

5. The RSP Fund's purchase and sale of the Underlying Fund's units will represent thebusiness judgment of responsible persons uninfluenced by considerations other thanthe best interests of the RSP Fund.

6. The RSP Fund will make investments such that its units will be "qualified investments"for registered retirement savings plans, registered retirement income funds anddeferred profit sharing plans (collectively, the "Registered Plans") under the IncomeTax Act (Canada) (the "Tax Act") and, based on an opinion of tax counsel to theManager, will not constitute foreign property to a Registered Plan.

7. The RSP Fund's direct investment in the Underlying Fund's units (the "Permitted RSPFund Investment") will be in an amount not to exceed the amount prescribed fromtime to time as the maximum permitted amount which may be invested in foreignproperty under the Tax Act without the imposition of tax under Part XI of the Tax Act(the "Foreign Property Maximum").

8. Except to the extent evidenced by this Decision and specific approvals granted by theCanadian securities administrators pursuant to National Policy Statement No. 39, theinvestments by the RSP Fund in the Underlying Fund will comply with the investmentrestrictions of the Legislation and National Policy Statement No. 39.

9. The Underlying Fund's investment objective is primarily achieved through investmentin foreign securities.

AND WHEREAS pursuant to the System this Decision Document evidences thedecision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each Decision Maker is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdiction to make the Decision hasbeen met;

THE DECISION of the Decision Makers pursuant to the Legislation is that theRequirements shall not apply to the RSP Fund's purchase and sale of the Underlying Fund'sunits provided that:

1. the Decision, as it relates to the jurisdiction of a Decision Maker, will terminate oneyear after the publication in final form of any legislation or rule of that Decision Makerdealing with the matters in clause 2.04(4)(b) of National Policy No. 39;

2. the Decision shall apply only to the RSP Fund's purchases and sales of theUnderlying Fund's units made in compliance with the following conditions:

(a) the RSP Fund and the Underlying Fund are under common management andthe Underlying Fund's units are offered for sale in the jurisdiction of theDecision Maker under a prospectus which has been filed with and acceptedby the Decision Maker;

(b) the RSP Fund restricts the aggregate amount of its direct investment in theUnderlying Fund's units to a percentage of its assets that is within the ForeignProperty Maximum; if at any time, the assets of the RSP Fund that areinvested in the Underlying Fund exceed the Foreign Property Limited, thenecessary changes are made to the RSP Fund's investment portfolio in orderto bring the RSP Fund's investment portfolio into conformity with the ForeignProperty Maximum;

(c) the investment by the RSP Fund in the Underlying Fund's units is compatiblewith the RSP Fund's fundamental investment objectives;

(d) the RSP Fund's prospectus and annual information form will disclose itsintention to invest in the Underlying Fund's units;

(e) the RSP Fund may change the Permitted RSP Fund Investments if it changesits fundamental investment objective in accordance with the Legislation;

(f) the arrangements between the RSP Fund and the Underlying Fund avoid theduplication of management fees;

(g) the RSP Fund will not pay sales charges for its purchases of the UnderlyingFund's units;

(h) the Underlying Fund will not charge the RSP Fund any redemption fees orother charges for redemptions by the RSP Fund of the Underlying Fund's units;

(i) no fees and charges of any sort are paid by the RSP Fund, the UnderlyingFund, by the RSP Fund's and Underlying Fund's Manager or principaldistributor or by the foregoing entities' affiliates or associates to anyone for theRSP Funds' investment in, or redemption of the Underlying Fund's units;

(j) if the Underlying Fund's constating documents or the laws applicable to theUnderlying Fund require it to give notice to its unitholders, it will also deliversuch notice to the RSP Fund's unitholders; all voting rights attached to theUnderlying Fund's units owned by an RSP Fund will be passed through to theRSP Fund's unitholders; in the event that a unitholders' meeting is called forthe Underlying Fund, all of the disclosure and notice material prepared for themeeting will be provided to the RSP Fund's unitholders and each unitholderwill be entitled to direct a representative of the RSP Fund to vote thatunitholder's proportion of the RSP Fund's holding in the Underlying Fund inaccordance with their direction; and the RSP Fund's representative will not bepermitted to vote its holdings other than as the RSP Fund's unitholders direct;

(k) there are compatible dates for the calculation of the net asset value for theRSP Fund and the Underlying Fund for the purpose of issuing and redeemingunits of each fund;

(l) if the RSP Fund and the Underlying Fund do not use a combined reportcontaining both the RSP Fund's and the Underlying Fund's financialstatements, in addition to receiving the annual and, upon request, the semi-annual financial statements of the RSP Fund, the RSP Fund's unitholders willreceive the Underlying Fund's annual and, upon request, semi-annual financialstatements; and

(m) if the RSP Fund and the Underlying Fund do not use a combined simplifiedprospectus and annual information form containing disclosure about the RSPFund and the Underlying Fund, copies of the Underlying Fund's simplifiedprospectus and annual information form and financial statements may beobtained upon request by a unitholder of the RSP Fund.

February 2nd, 2000.

"Howard I. Wetston"     "Theresa McLeod"