Securities Law & Instruments


Investment by a mutual fund in securities of another mutual fund that is under commonmanagement for specified purpose exempted from the requirement of clause 111(2)(b),and subsection 111(3), clauses 117(1)(a) and 117(1)(d) subject to certain specifiedconditions under which an "active" investment structure may be used.

Statute Cited

Securities Act (Ontario), R.S.O. 1990 c.S.5, as am. Ss. 111(2)(b), 111(3), 113, 117(1)(a),117(1)(d), 117(2).







WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of the provinces of British Columbia, Alberta, Saskatchewan, Ontario,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application (the"Application") from Desjardins Trust Investment Services Inc.("DTIS"), as manager ofMAESTRAL Global Equity RSP Fund ("Global Equity RSP Fund") and other mutual fundsmanaged by DTIS after the date of this Decision (defined herein) having an investmentobjective or strategy that is linked to the returns or portfolio of another specified DTISmanaged mutual fund (collectively referred to as the "RSP Funds"), for a decision by eachDecision Maker (collectively, the "Decision") under the securities legislation of theJurisdictions (the "Legislation") that the following prohibitions or requirements under theLegislation (the "Applicable Requirements") shall not apply to the RSP Funds, or DTIS, asthe case may be, in respect of certain investments to be made by the Global Equity RSPFund in MAESTRAL Global Equity Fund ("Global Equity Fund") and by the other RSPFunds in their applicable corresponding DTIS managed mutual fund from time to time(collectively referred to as the "Underlying Funds"):

i the provisions requiring the management company of a mutual fund to file a reportrelating to the purchase or sale of securities between the mutual fund and anyrelated person or company, or any transaction in which, by arrangement other thanan arrangement relating to insider trading in portfolio securities, the mutual fund isa joint participant with one or more of its related persons or companies; and

ii. the provisions prohibiting a mutual fund from knowingly making and 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 under the Mutual Reliance Review System for Exemptive ReliefApplications (the "System"), the Ontario Securities Commission is the principal regulatorfor this Application;

AND WHEREAS DTIS has represented to the Decision Makers as follows:

1. Each of the RSP Funds and Underlying Funds (collectively, the "Funds") is or willbe open-ended mutual fund trusts established under the laws of the Province ofQuébec.

2. DTIS is a corporation incorporated under the laws of the Province of Québec andis or will be the manager of each of the RSP Funds and the Underlying Funds.Desjardins Trust Inc. ("Desjardins Trust") is a corporation incorporated under thelaws of Québec and is or will be the trustee and promoter of the RSP Funds and theUnderlying Funds. Desjardins Investment Management Inc. ("DIM") is or will be theportfolio manager of the RSP Funds and the Underlying Funds. DTIS and DIM arewholly-owned subsidiaries of Desjardins Trust.

3. The RSP Funds and the Underlying Funds will be reporting issuers. The units ofeach RSP Fund and each Underlying Fund will be qualified under a simplifiedprospectus and annual information form (collectively, a "Prospectus") which will befiled in all of the provinces and territories of Canada (the "ProspectusJurisdictions").

4. The investment objective of the RSP Funds is or will be to provide long-term capitalgrowth, primarily through investment in derivatives that provide a return linked tothe return of the applicable Underlying Fund. In the case of the Global Equity RSPFund, the return will be linked to the return of the Global Equity Fund. Each RSPFund will also invest directly in the applicable Underlying Fund up to the amountprescribed from time to time as the maximum permitted amount which may beinvested in foreign property under the Income Tax Act (Canada) (the "Tax Act")without the imposition of tax under Part XI of the Tax Act (the "Foreign PropertyMaximum").

5. To achieve its investment objective, each of the RSP Funds will make investmentssuch that its securities will, in the opinion of tax counsel to the RSP Funds, be"qualified investments" for registered retirement savings plans, registered retirementincome funds, deferred profit sharing plans and similar plans (collectively, the"Registered Plans") under the Tax Act and will not constitute "foreign property" toa Registered Plan.

6. The direct investment by an RSP Fund in securities of the applicable UnderlyingFund will be within the Foreign Property Maximum (the "Permitted RSP FundInvestments"). DTIS and the RSP Funds will comply with the conditions of thisDecision in respect of such investments. The amount of direct investment by eachRSP Fund in its applicable Underlying Fund will be adjusted from time to time sothat, except for transitional cash, the aggregate of derivative exposure to, and directinvestment in, the Underlying Fund will equal 100% of the assets of the RSP Fund.

7. The investment objectives of the Underlying Funds are or will be achieved throughinvestment primarily in foreign securities.

8. Except to the extent evidenced by this Decision Document and specific approvalsgranted by the securities regulatory authorities or regulators under NationalInstrument 81-102 Mutual Funds ("NI 81-102"), the investments by the RSP Fundsin the Underlying Funds have been or will be structured to comply with theinvestment restrictions of the Legislation and NI 81-102.

9. In the absence of this Decision, the RSP Funds are prohibited from (a) knowinglymaking an investment in a person or company in which the mutual fund, alone ortogether with one or more related mutual funds, is a substantial securityholder; and(b) knowingly holding an investment referred to in subsection (a) hereof. As aresult, in the absence of this Decision the RSP Funds would be required to divestthemselves of any such investments.

10. In the absence of this Decision, the Legislation requires DTIS to file a report onevery purchase or sale of securities of the Underlying Funds by the RSP Funds.

11. The RSP Funds' investment in or redemption of units of their correspondingUnderlying Funds will represent the business judgment of responsible persons,uninfluenced by considerations other than the best interest of the RSP Funds.

AND WHEREAS pursuant to the System this MRRS Decision Document evidencesthe decision of each Decision Maker;

AND WHEREAS each of the Decision Makers are satisfied that the tests containedin the Legislation that provides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that theApplicable Requirements do not apply to the RSP Funds or DTIS, as the case may be, inrespect of investments to be made by the RSP Funds in securities of the UnderlyingFunds;


1. this 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 DecisionMaker dealing with the matters in subsection 2.5(1) of NI 81-102; and

2. this Decision shall only apply in respect of investments in, or transactions with, theUnderlying Funds that are made by the RSP Funds in compliance with the followingconditions:

(a) the RSP Funds and the Underlying Funds will be under commonmanagement and the units of both will be offered for sale in the jurisdictionof each Decision Maker pursuant to a Prospectus which has been filed withand accepted by the Decision Maker;

(b) each RSP Fund will restrict its aggregate direct investment in itscorresponding Underlying Fund to a percentage of its assets that is withinthe Foreign Property Maximum;

(c) the investment by each RSP Fund in its Underlying Fund will be compatiblewith the fundamental investment objective of the RSP Fund;

(d) the Prospectus will disclose the intent of the RSP Funds to invest in units ofthe Underlying Funds;

(e) the RSP Funds may change the Permitted RSP Fund Investments if theychange their fundamental investment objectives in accordance withLegislation;

(f) no sales charges will be payable by the RSP Funds in relation to purchasesof units of the Underlying Funds;

(g) there will be compatible dates for the calculation of the net asset value of theRSP Funds and the Underlying Funds for the purpose of the issue andredemption of units of such mutual funds;

(h) no redemption fees or other charges will be charged by the UnderlyingFunds in respect of the redemption by the RSP Funds of units of theUnderlying Funds owned by the RSP Funds;

(i) the arrangements between or in respect of the RSP Funds and theUnderlying Funds will be such as to avoid the duplication of managementfees;

(j) no fees and charges of any sort will be paid by the RSP Funds, theUnderlying Funds, or by the manager or principal distributor of the RSPFunds or the Underlying Funds, or by any affiliate or associate of any of theforegoing entities to anyone in respect of the RSP Funds' purchases,holdings or redemptions of the units of the Underlying Funds;

(k) in the event of the provision of any notice to unitholders of the UnderlyingFunds, as required by applicable laws or the constating documents of theUnderlying Funds, such notice will also be delivered to the unitholders of theRSP Funds; all voting rights attached to the securities of the UnderlyingFunds that are owned by the RSP Funds will be passed through to theunitholders of the RSP Funds.

(l) in the event that a unitholders' meeting is called for an Underlying Fund, allof the disclosure and notice material prepared in connection with suchmeeting will be provided to the unitholders of the corresponding RSP Fundand such unitholders will be entitled to direct a representative of the RSPFund to vote that RSP Fund's holding in the Underlying Fund in accordancewith their direction; and the representative of the RSP Fund will not bepermitted to vote the RSP Fund's holdings in the Underlying Fund except tothe extent the unitholders of the RSP Fund so direct;

(m) in addition to receiving the annual and, upon request, the semi-annualfinancial statements of the RSP Funds, unitholders of the RSP Funds willreceive the annual and, upon request, the semi-annual financial statementsof the Underlying Funds in either a combined report, containing both theRSP Funds' and Underlying Funds' financial statements, or in a separatereport containing the Underlying Funds' financial statements; and

(n) to the extent that the RSP Funds and the Underlying Funds do not use acombined simplified prospectus, annual information form and financialstatements containing disclosure about the RSP Funds and the UnderlyingFunds, copies of the simplified prospectuses, annual information forms andfinancial statements relating to the Underlying Funds may be obtained uponrequest by a unitholder of the RSP Funds.

October 6th, 2000.

"J. A. Geller"      "Howard I. Wetston"