Exemption from the fees otherwise due under subsection 14(1) of Schedule 1 of theRegulation to the Securities Act on a distribution of units made by an 'underlying' funddirectly (i) to a 'clone' fund, (ii) to the 'clone' fund's counterparties for hedging purposesand (ii) on the reinvestment of distributions on such units.
Regulation made under the Securities Act, R.R.O. 1990, Reg, 1015, as am., Schedule1, ss. 14(1), 14(4) and 59(1).
R.S.O. 1990, CHAPTER S. 5, AS AMENDED
IN THE MATTER OF
ATLAS GLOBAL VALUE FUND, ATLAS INTERNATIONAL LARGE CAP GROWTH FUND, MERRILL LYNCH GLOBAL SECTORS FUND,MERRILL LYNCH INTERNET STRATEGIES FUND, ATLAS GLOBAL VALUE FUND, ATLAS ASSET MANAGEMENT INC.
(Subsection 59(1) of Schedule I of the Regulation made under the above statute (the " Regulation"))
UPON the application of Atlas Asset Management Inc. ("Atlas"), the manager andtrustee of Merrill Lynch Global Sectors RSP Fund, Merrill Lynch Internet Strategies RSPFund, Atlas Global Value RSP Fund, Atlas International Large Cap Growth RSP Fund, andother similar funds established by Atlas from time to time (collectively, the "RSP Funds")and Merrill Lynch Global Sectors Fund, Merrill Lynch Internet Strategies Fund, AtlasGlobal Value Fund, Atlas International Large Cap Growth Fund, and other similar fundsestablished by Atlas from time to time (collectively, the "Underlying Funds") to the OntarioSecurities Commission (the "Commission") for an order pursuant to subsection 59(1) ofSchedule I of the Regulation exempting the Underlying Funds from paying duplicate filingfees on an annual basis in respect of the distribution of units of the Underlying Funds tothe RSP Funds, the distribution of units of the Underlying Funds to counterparties withwhom the RSP Funds have entered into forward contracts and on the reinvestment ofdistributions on such units;
AND UPON considering the application and the recommendation of the staff of theCommission;
AND UPON Atlas having represented to the Commission that:
1. Atlas is the manager and trustee of the RSP Funds and the Underlying Funds.Atlas is a corporation incorporated under the laws of Canada.
2. Each of the RSP Funds and the Underlying Funds is, or will be, an open-endedunincorporated mutual fund trust established under the laws of Ontario.
3. The units of the RSP Funds and the Underlying Funds are, or will be, qualified fordistribution pursuant to simplified prospectuses and annual information forms filedacross Canada.
4. Each of the RSP Funds and the Underlying Funds is, or will be, a reporting issuerunder the securities laws of each of the provinces and territories of Canada. Noneof the RSP Funds or the Underlying Funds is in default of any requirements of thesecurities legislation, regulations or rules applicable in each of the provinces andterritories of Canada.
5. As part of their investment strategy, the RSP Funds enter into forward contractswith one or more financial institutions (the "Counterparties") that link the returns toan Underlying Fund. A Counterparty may hedge its obligations under a forwardcontract by investing in units (the "Hedge Units") of the applicable Underlying Fund.In addition, the RSP Funds may purchase units of the Underlying Funds (the "Fundon Fund Investments").
6. Applicable securities regulatory approvals for the Fund on Fund Investments andthe RSP Funds' investment strategies have been obtained.
7. Annually, each of the RSP Funds will be required to pay filing fees to theCommission in respect of the distribution of its units in Ontario pursuant to section14 of Schedule I of the Regulation and will similarly be required to pay fees basedon the distribution of its units in other relevant Canadian jurisdictions pursuant tothe applicable securities legislation in each of those jurisdictions.
8. Annually, each of the Underlying Funds will be required to pay filing fees in respectof the distribution of its units in Ontario, including units issued to the RSP Fundsand the Hedge Units, pursuant to section 14 of Schedule I of the Regulation and willsimilarly be required to pay fees based on the distribution of its units in otherrelevant Canadian jurisdictions pursuant to the applicable securities legislation ineach of those jurisdictions.
9. A duplication of filing fees pursuant to Section 14 of Schedule I of the Regulationmay result when (a) assets of an RSP Fund are invested in the applicableUnderlying Fund (b) Hedge Units are distributed and (c) a distribution is paid by anUnderlying Fund on units of the Underlying Fund held by the applicable RSP Fundor Hedge Units which are reinvested in additional units of the Underlying Fund("Reinvested Units").
AND UPON the Commission being satisfied to do so would not be prejudicial to thepublic interest;
IT IS ORDERED by the Commission pursuant to subsection 59(1) of Schedule I ofthe Regulation that the Underlying Funds are exempt from the payment of duplicate filingfees on an annual basis pursuant to section 14 of Schedule I of the Regulation in respectof the distribution of units of the Underlying Funds to the RSP Funds, the distribution ofHedge Units to Counterparties and the distribution of Reinvested Units, provided that eachUnderlying Fund shall include in its notice filed under subsection 14(4) of Schedule I of theRegulation a statement of the aggregate gross proceeds realized in Ontario as a result ofthe issuance by the Underlying Funds of (1) units distributed to the RSP Fund, (2) HedgeUnits and (3) Reinvested Units; together with a calculation of the fees that would havebeen payable in the absence of this order.
March 14th, 2000.
"J. A. Geller" " R. Stephen Paddon"