Desjardins Trust Inc. - ss. 74(1)

Ruling

Headnote

Subsection 74(1) of the Act- Provincial trust corporation exempt from subsection 25(1) of the Act, subject to certainconditions, solely for the purpose of engaging in activities listed in paragraph 209(1)(h) of the Regulation.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(1), 25(1), 35(1), 74(1).

An Act Respecting Trust Companies and Savings Companies, R.S.Q., c. S-29.01, as am.

Loan and Trust Corporations Act, R.S.O. 1990, c. L.25, as am.

Trust and Loan Companies Act, S.C. 1991, c. 45, as am.

Regulations Cited

Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 209(1)(h), 209(10).

Rules Cited

Ontario Securities Commission Rule 32-502 "Registration Exemption for Certain Trades by Financial Intermediaries"(1997), 20 O.S.C.B. 699.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

R.R.O. 1990, REGULATION 1015,

AS AMENDED (the "Regulation")

AND

IN THE MATTER OF

DESJARDINS TRUST INC.

RULING

(Subsection 74(1) of the Act)

UPON the application of Desjardins Trust Inc. (the "Applicant") to the Ontario Securities Commission (the"Commission") for a ruling pursuant to subsection 74(1) of the Act exempting the Applicant from subsection 25(1) of theAct solely for the purpose of engaging in the activities listed in paragraph 209(1)(h) of the Regulation;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is a trust company governed by an Act Respecting Trust Companies and Savings Companies(Quebec) and is registered as an extra-provincial trust corporation under the Loan and Trust Corporations Act(Ontario).

2. The Applicant is regulated in Ontario by the Financial Services Commission of Ontario and in the Province ofQuebec by the Inspecteur général des institutions financières and by the Commission des valeurs mobilièresdu Québec. The Applicant is in good standing with all its regulators.

3. The Applicant intends to establish, from time to time, pooled fund trust vehicles constituting "mutual funds", asdefined in subsection 1(1) of the Act. Each pooled fund is aimed at providing a single investment vehicle forindividual and institutional investment accounts which are fully managed by the Applicant and have commoninvestment objectives.

4. Commission Rule 32-502 "Registration Exemption for Certain Trades by Financial Intermediaries" providesfinancial intermediaries, such as the Applicant, with an exemption from registration for trades described insubsection 35(1) of the Act but provides that the exemption will not apply to a trade in a security of a mutualfund.

5. A restriction in respect to trades in mutual funds does not apply to a financial intermediary regulated by thefederal Office of the Superintendent of Financial Institutions ("OSFI") which would be, by virtue of subsection209(10) of the Regulation, exempt from registration where trading solely for the purpose of the activities listedin paragraph 209(1)(h) of the Regulation.

6. If the Applicant were regulated by OSFI, it would be able to rely on the exemption in subsection 209(10) of theRegulation for the purpose of engaging in the activities listed in paragraph 209(1)(h) of the Regulation.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1) of the Act, that the Applicant is exempt from registration undersubsection 25(1) of the Act solely for the purpose of engaging in the activities listed in paragraph 209(1)(h) of theRegulation, provided that:

(a) the Applicant maintains its status as a registered trust company in good standing under An ActRespecting Trust Companies and Savings Companies (Quebec) and maintains its status as aregistered extra-provincial trust corporation in good standing under the Loan and Trust CorporationsAct (Ontario);

(b) the Applicant remains in compliance with all applicable capital and liquidity requirements establishedpursuant to An Act Respecting Trust Companies and Savings Companies (Quebec) and the Loan andTrust Corporations Act (Ontario);

(c) the Applicant immediately notify the Manager of Compliance of the Commission of any failure tocomply with the capital and liquidity requirements established under An Act Respecting TrustCompanies and Savings Companies (Quebec) and the Loan and Trust Corporations Act (Ontario); and

(d) the relief provided by this ruling shall expire upon:

(i) the revocation of paragraph 209(1)(h) of the Regulation or subsection 209(10) of theRegulation;

(ii) the implementation of any successor provision to paragraph 209(1)(h) of the Regulation orsubsection 209(10) of the Regulation; or

(iii) the Applicant obtaining registration as a trust company under the federal Trust and LoanCompanies Act.

May 8, 2001.

"J.A. Geller" "Robert W. Korthals"