McLean Budden Ltd. - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - trades by pooled funds of additional units to existingunitholders holding units having an aggregate acquisition cost or net asset value of not less than the minimum amountprescribed by legislation under "private placement" exemption exempted from registration and prospectus requirement -trades by pooled funds of units to existing unitholders pursuant to automatic reinvestment of distributions by pooled fundsexempted from registration and prospectus requirement - trades in units of pooled funds not subject to requirement tofile reports of trade within 10 days of trades provided prescribed reports filed and fees paid within 30 days of financialyear end of pooled funds.

Statutes Cited

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 25, 53, 72(3), 74(1), 147.

Rules Cited

Ontario Securities Commission Rule 45-501 - Exempt Distributions (1998) 21 OSCB 6548.

Ontario Securities Commission Rule 81-501 - Mutual Fund Reinvestment Plans (1998) 21 OSCB 2713.

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, MANITOBA

ONTARIO, NOVA SCOTIA, NEW BRUNSWICK, AND NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

McLEAN BUDDEN LIMITED

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of BritishColumbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick and Newfoundland, (the"Jurisdictions") has received an application from McLean Budden Limited (the "Manager") for a decision pursuant to thesecurities legislation of the Jurisdictions (the "Legislation") that:

(a) certain trades in units ("Units") of the McLean Budden Pooled Funds (individually a "Fund" andcollectively the "Funds") which are or will be established by the Manager are not subject to theprospectus requirements of the Legislation of Manitoba, Ontario, New Brunswick and Newfoundland(the "Prospectus Jurisdictions") or to the registration requirements of the Legislation of Manitoba, NewBrunswick and Newfoundland (the "Registration Jurisdictions"); and

(b) trades in Units are not subject to the requirements of the Legislation of the Jurisdictions, other thanManitoba, relating to the filing of forms and the payment of fees within 10 days of each trade, subjectto certain conditions;

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS it has been represented by the Manager to the Decision Makers that:

1. The Manager is registered under the Legislation of Ontario and British Columbia as a mutual fund dealer or theequivalent and under the Legislation of all the Jurisdictions as an investment counsel and portfolio manageror the equivalent. Each Fund is or will be a mutual fund as defined in the Legislation;

2. Units in each of the Funds will be non-transferable but will be redeemable at their net asset value in accordancewith the procedures set out in the trust indenture of the particular Fund;

3. Units of the Funds may be offered on a continuous basis to taxable and non-taxable investors, including, butnot limited to, high net worth individuals, pension plans, religious orders, charitable organizations, endowmentsand insurance companies;

4. Units of the Funds will be sold to purchasers resident in Newfoundland by dealers registered in Newfoundland;

5. Units of the Funds will be sold to purchasers resident in the Jurisdictions other than Newfoundland by theManager;

6. The initial minimum investment (the "Initial Minimum Investment") in any of the Funds by an investor in aJurisdiction will be not less than the minimum aggregate purchase amount prescribed by the applicableLegislation of such Jurisdiction (the "Prescribed Amount") and will be made in reliance upon prospectusexemptions in each of the Jurisdictions, and upon the dealer registration exemptions in each of the Jurisdictionsother than Ontario, British Columbia and Newfoundland (the "Private Placement Exemption");

7. Following the Initial Minimum Investment, it is proposed that unitholders of the Funds who were sold Units inreliance upon the Private Placement Exemption be permitted to subscribe for additional units (the "SubscribedUnits"), provided that at the time of such subsequent acquisition the investor holds Units of the Fund with anaggregate acquisition cost or aggregate net asset value of at least the Prescribed Amount; and

8. Each Fund proposes to distribute additional Units ("Reinvested Units") by way of automatic reinvestment ofdistributions to unitholders of such Fund, unless otherwise requested by a unitholder;

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that:

(a) the registration requirements contained in the Legislation of the Registration Jurisdictions, and theprospectus requirements contained in the Legislation of the Prospectus Jurisdictions shall not applyto:

(i) the issuance of Subscribed Units of a Fund to a unitholder of that Fund provided that

(1) the initial investment in Units of that Fund was pursuant to the applicable PrivatePlacement Exemption;

(2) at the time of the issuance of such Subscribed Units, the unitholder then owns Unitsof that Fund having an aggregate acquisition cost or an aggregate net asset valueof not less than the Prescribed Amount of the applicable Prospectus Jurisdiction;

(3) at the time of the issuance of such Subscribed Units, the Manager is registeredunder the Legislation of Ontario as a mutual fund dealer and such registration is ingood standing; and

(4) this clause (a) will cease to be in effect with respect to a Prospectus Jurisdiction 90days after the coming into force of any legislation, regulation or rule in suchJurisdiction relating to the distribution of Subscribed Units of pooled funds; and

(ii) an issuance of Reinvested Units of a Fund to a unitholder of that Fund provided that

(1) no sales commission or other charge in respect of such issuance of ReinvestedUnits is payable; and

(2) the unitholder has received, not more than 12 months before such issuance, astatement describing (A) the details of any deferred or contingent sales charge orredemption fee that is payable at the time of the redemption of a Unit, (B) the rightthat the unitholder has to make an election to receive cash instead of Units on thepayment of the net income or net realized capital gains distributed by the Fund, (C)instructions on how the right referred to in subclause (B) can be exercised, and (D)the fact that no prospectus is available for the Fund as Units are offered pursuantto prospectus exemptions only; and

(b) the requirements contained in the Legislation of the Jurisdictions other than Manitoba to file a reportof a distribution of Units under the Private Placement Exemption or of Subscribed Units within 10 daysof such trade shall not apply to such trade, provided that within 30 days after each financial year endof each Fund, such Fund:

(i) files with the applicable Decision Maker a report in respect of all trades in Units of that Fundduring such financial year, in the form prescribed by the applicable Legislation; and

(ii) remits the applicable Decision Maker the fee prescribed by the applicable Legislation.

February 15, 2001.

"Howard I. Wetston"       "Stephen N. Adams"