Securities Law & Instruments


Headnote

Applicant is trustee, administrator and principal distributor of three mutual funds whoseinvestment objective is to track the performance of an index; trustee is wholly-ownedsubsidiary of a bank which has acquired or may acquire, from time to time, beneficialownership of more than 10% of the common shares of an issuer whose shares areincluded in the index; exemption granted from clause 111(2)(c) and subsection 111(3)of the Ontario Act which would otherwise prohibit the funds from acquiring or continuingto hold securities of the issuer in which a substantial securityholder of the trustee has asignificant interest..

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 111(2)(c), 111(3), 113(a).


IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO, BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, NOVA SCOTIA AND NEWFOUNDLAND

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
CIBC SECURITIES INC., CIBC CANADIAN INDEX FUND, 5-YEAR PROTECTED CANADIANINDEX FUND AND 5-YEAR PROTECTED BALANCED INDEX FUND

MRRS DECISION DOCUMENT


WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of Ontario, British Columbia, Alberta, Saskatchewan, Nova Scotia andNewfoundland (the "Jurisdictions") has received an application from CIBC SecuritiesInc. (the "Trustee") on behalf of CIBC Canadian Index Fund, 5-Year ProtectedCanadian Index Fund and 5-Year Protected Balanced Index Fund (the "Funds" and,together with the Trustee, the "Filers") for a decision under the securities legislation ofthe Jurisdictions (the "Legislation") that the requirement contained in the Legislationwhich would prohibit the Funds from acquiring or continuing to hold securities of TheLoewen Group Inc. ("Loewen") in which Canadian Imperial Bank of Commerce("CIBC"), who is a substantial securityholder of the Trustee, has a significant interest,shall not apply to the Filers;

AND WHEREAS under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS the Filers have represented to the Decision Makers that:

1. Each of the Funds is an open-ended mutual fund trust established under thelaws of Ontario, in the case of the CIBC Canadian Index Fund on July 8, 1996,and November 20, 1998, in the case of the 5-Year Protected Canadian IndexFund and the 5-Year Protected Balanced Index Fund (the "Protected Funds").

2. Units of the CIBC Canadian Index Fund are offered in each of the provinces ofCanada pursuant to a simplified prospectus and annual information form datedAugust 18, 1999.

3. Units of the Protected Funds were offered pursuant to a prospectus datedNovember 20, 1998, however sales of units of the Protected Funds were cappedby the Trustee on May 14, 1999.

4. The head office of the Trustee is in Ontario and Ontario is the principaljurisdiction in respect of the filing of the simplified prospectuses under whichUnits of the Funds are currently, in the case of the CIBC Canadian Index Fund,or were, in the case of the Protected Funds, offered.

5. The investment objective of the CIBC Canadian Index Fund and of the 5-YearProtected Canadian Index Fund is to achieve a return that approximates theperformance of a generally recognized index of the Canadian equity market,currently being The Toronto Stock Exchange 300 Composite Index (the "TSE300 Index"), calculated on a total return basis and the portfolio of each of theseFunds is invested primarily in a broad range of equity securities of companiesthat make up the TSE 300 Index, in substantially the same proportion as theyare weighted in that index.

6. The investment objective of the 5-Year Protected Balanced Index Fund is toachieve long-term growth through capital appreciation and income by investingprimarily in a combination of debt instruments, equity securities and options,futures and forward contracts based on Canadian, U.S., and internationalindices.

7. The TSE 300 Index is one of the indices which the 5-Year Protected BalancedIndex Fund tracks.

8. The common shares of Loewen form part of the TSE 300 Index, currentlycomprising less than one-tenth of 1% of the index, and each of the Fundscurrently holds Loewen common shares in such proportion.

9. The Funds' investment manager is TAL Global Asset Management Ltd. ("TAL").

10. The Trustee is the trustee, administrator and principal distributor of each of theFunds.

11. The Trustee is a wholly-owned subsidiary of CIBC.

12. CIBC has also acquired or may acquire from time to time beneficial ownership ofmore than 10% of the outstanding common shares of Loewen.

13. As a result of the relationships between CIBC and the Trustee and CIBC andLoewen, the Legislation would prohibit the Funds from acquiring or continuing tohold securities of Loewen.

14. At the time the Loewen common shares were acquired by the Funds, they werenot investments prohibited under the Legislation.

15. The Loewen common shares became prohibited investments for the Funds whenCIBC realized on a pledge of such shares.

16. To the extent that the Funds currently hold Loewen common shares, thepurchases of such shares were dictated at the time by the indices that the Fundstrack.

17. Because the Trustee and TAL do not independently determine whether andwhich proportion of the assets of the Funds will be invested in Loewen commonshares, the conflict of interest concerns underlying the Legislation do not apply.

18. Without the relief granted herein, the Funds would be unable to adhere to theirstated investment objectives and unit-holders could be harmed to the extent thatthe Funds would need to immediately dispose of the Loewen common shareswithout regard to current market conditions.

19. The investments in Loewen common shares by the Funds represent thebusiness judgement of responsible persons uninfluenced by considerationsother than the best interests of the Funds.

AND WHEREAS under the System, this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision-Makers is satisfied that test contained inthe Legislation that provides the Decision-Maker with the jurisdiction to make theDecision has been met;

The Decision of the Decision-Makers under the Legislation is that the requirementcontained in the Legislation prohibiting the Funds from acquiring or continuing to holdsecurities of Loewen shall not apply to the Funds, provided that the proportion of theFund's assets invested and to be invested in Loewen is determined according to theFund's stated investment objective of investing in securities comprising a specifiedindex and not pursuant to the discretion of the manager of the Fund.

March 9th, 2000.

"Howard I. Wetston"    "Theresa McLeod"