Securities Law & Instruments


Investmentby mutual funds directly in securities of other mutual funds exemptedfrom the reporting requirements and self-dealing prohibitionsof s.113 and s.117


SecuritiesAct (Ontario), R.S.O. 1990 c.S.5., as am., 111(2)(b), 11(3), 117(1)(a)and 117(1)(d).















WHEREAS the local regulatory authority or regulator(the "Decision Maker") in each of the provinces of British Columbia,Alberta, Saskatchewan, Ontario, Nova Scotia, and Newfoundland(the "Jurisdictions") has received an application from CartierMutual Funds Inc. ("Cartier"), as manager of the Cartier MultimanagementPortfolio (the "Existing Top Fund") and other mutual funds managedby Cartier after the date of this Decision (defined herein)having an investment objective that invests substantially allof its assets in other mutual funds (individually, a "FutureTop Fund" and together with the Existing Top Fund, the "TopFunds") for a decision by each Decision Maker (collectively,the "Decision") pursuant to the securities legislation of theJurisdictions (the "Legislation") that the following provisionsof the Legislation (the "Applicable Requirements") shall notapply to the Top Funds or Cartier, as the case may be, in respectof certain investments to be made by a Top Fund in an UnderlyingFund (as hereinafter defined) from time to time:

i.the restrictions contained in the Legislation prohibiting amutual fund from knowingly making or holding an investment ina person or company in which the mutual fund, alone or togetherwith one or more related mutual funds, is a substantial securityholder;and

ii.the requirements contained in the Legislation requiring themanagement company, or in British Columbia, a mutual fund manager,to file a report relating to a purchase or sale of securitiesbetween the mutual fund and any related person or company, orany transaction in which, by arrangement other than an arrangementrelating to insider trading in portfolio securities, the mutualfund is a joint participant with one or more of its relatedpersons or companies.

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this Application;

AND WHEREAS Cartier has represented to the DecisionMakers that:

1.Cartier is a corporation established under the laws of Canadaand its head office is located in the Province of Quebec. Cartieris or will be the manager of the Top Funds and the Cartier UnderlyingFunds (collectively, the "Cartier Funds" and "Cartier UnderlyingFunds" being Underlying Funds that are managed by Cartier).

2.The Cartier Funds are or will be open-end mutual fund trustsor classes of shares of a mutual fund corporation, each establishedunder the laws of a Province of Canada. Securities of the CartierFunds are or will be qualified for distribution under a simplifiedprospectus and annual information form filed in each of theJurisdictions.

3.Each of the Cartier Funds is or will be a reporting issuer ineach of the Jurisdictions and not in default of any requirementsof the Legislation.

4.Cartier is the manager of Cartier Money Market Fund, CartierBond Fund, Cartier Cdn. Equity Fund, Cartier Small Cap Cdn.Equity Fund, Cartier U.S. Equity Fund, Cartier Global EquityFund and Cartier Global Leaders RSP Fund (the "Existing UnderlyingFunds").

5.The Top Funds may in the future invest their assets in mutualfunds managed by Cartier or a person or company other than Cartier(each a "Future Underlying Fund" and together with the ExistingUnderlying Funds, the "Underlying Funds").

6.As part of its investment objective, each Top Fund will investfixed percentages (the "Fixed Percentages") of its assets (excludingcash and cash equivalents) directly in securities of specifiedUnderlying Funds, subject to a variation of 2.5% above or belowthe Fixed Percentages (the "Permitted Ranges") to account formarket fluctuations. Investments by each of the Top Funds willbe made in accordance with the fundamental investment objectivesof the Top Funds.

7.The Top Funds will not invest in an Underlying Fund with aninvestment objective which includes investing directly or indirectlyin other mutual funds.

8.The simplified prospectus for the Top Funds will disclose theinvestment objectives, investment strategies, risks and restrictionsof the Top Funds and the Underlying Funds, the Fixed Percentagesand the Permitted Ranges.

9.Except to the extent evidenced by this Decision and specificapprovals granted by the Decision Makers pursuant to NationalInstrument 81-102 ("NI 81-102"), the investments by the TopFunds in the Underlying Funds have been structured to complywith the investment restrictions of the Legislation and NI 81-102.

10.In the absence of this Decision, each of the Top Funds is prohibitedfrom knowingly making or holding an investment in the UnderlyingFunds in which the Top Fund alone or together with one or morerelated mutual funds is a substantial securityholder.

11.In the absence of this Decision, Cartier is required to filea report on every purchase or sale of securities of the UnderlyingFunds by each of the Top Funds.

12.The investments by the Top Funds in securities of the UnderlyingFunds represents the business judgment of "responsible persons"(as defined in the Legislation), uninfluenced by considerationsother than the best interests of the Top Funds.

AND WHEREAS pursuant to the System, this MRRSDecision Document evidences the Decision of each Decision Maker;

AND WHEREAS each Decision Maker is satisfiedthat the test contained in the Legislation that provides theDecision Maker with the jurisdiction to make the Decision hasbeen met;

THE DECISION of the Decision Makers pursuantto the Legislation is that the Applicable Requirements shallnot apply so as to prevent the Top Funds from making or holdingan investment in securities of the Underlying Funds or so asto require Cartier to file a report relating to the purchaseor sale of such securities;

PROVIDED THAT IN RESPECT OF the investments by theTop Funds in securities of the Underlying Funds:

1.the Decision, as it relates to the jurisdiction of the DecisionMaker, will terminate one year after the publication in finalform of any legislation or rule of that Decision Maker dealingwith the matters in subsection 2.5 of NI 81-102.

2.the Decision shall only apply if, at the time a Top Fund makesor holds an investment in its Underlying Funds, the followingconditions are satisfied:

(a) the securities of both the Top Fund and the Underlying Fundsare being offered for sale in the jurisdiction of each DecisionMaker pursuant to a simplified prospectus and annual informationform which have been filed with and accepted by the DecisionMaker;

(b) the investment by the Top Fund in the Underlying Funds iscompatible with the investment objective of the Top Fund;

(c) the simplified prospectus of the Top Fund discloses theintent of the Top Fund to invest directly in the UnderlyingFunds, the names of the Underlying Funds, the Fixed Percentagesand the Permitted Ranges within which such Fixed Percentagesmay vary;

(d) the investment objective of the Top Fund discloses thatthe Top Fund invests in securities of other mutual funds;

(e) the Underlying Funds are not mutual funds whose investmentobjective includes investing directly or indirectly in othermutual funds;

(f) the Top Fund invests its assets (exclusive of cash and cashequivalents) in the Underlying Funds in accordance with theFixed Percentages disclosed in the simplified prospectus ofthe Top Fund;

(g) the Top Fund's holding of securities in the Underlying Fundsdoes not deviate from the Permitted Ranges;

(h) any deviation from the Fixed Percentages is caused by marketfluctuations only;

(i) if an investment by the Top Fund in any of the UnderlyingFunds has deviated from the Permitted Ranges as a result ofmarket fluctuations, the Top Fund's investment portfolio wasre-balanced to comply with the Fixed Percentage on the nextday on which the net asset value was calculated following thedeviation;

(j) if the Fixed Percentages and the Underlying Funds whichare disclosed in the simplified prospectus of the Top Fund havebeen changed, either the simplified prospectus has been amendedin accordance with securities legislation to reflect this significantchange, or a new simplified prospectus reflecting the significantchange has been filed within ten days thereof, and the securityholdersof the Top Fund have been given at least 60 days' notice ofthe change;

(k) there are compatible dates for the calculation of the netasset value of the Top Fund and the Underlying Funds for thepurpose of the issue and redemption of the securities of suchmutual funds;

(l) no sales charges are payable by the Top Fund in relationto its purchases of securities of the Underlying Funds;

(m) no redemption fees or other charges are charged by an UnderlyingFund in respect of the redemption by the Top Fund of securitiesof the Underlying Fund owned by the Top Fund;

(n) no fees or charges of any sort are paid by the Top Fundand the Underlying Funds, by their respective managers or principaldistributors, or by any affiliate or associate of any of theforegoing entities, to anyone in respect of the purchase, holdingor redemption by a Top Fund of the securities of the UnderlyingFunds;

(o) the arrangements between or in respect of the Top Fund andthe Underlying Funds are such as to avoid the duplication ofmanagement fees;

(p) any notice provided to securityholders of an UnderlyingFund as required by applicable laws or the constating documentsof that Underlying Fund has been delivered by the Top Fund toits securityholders;

(q) all of the disclosure and notice material prepared in connectionwith a meeting of securityholders of the Underlying Funds andreceived by the Top Fund has been provided to its securityholders,the securityholders have been permitted to direct a representativeof the Top Fund to vote its holdings in the Underlying Fundin accordance with their direction, and the representative ofthe Top Fund has not voted its holdings in the Underlying Fundsexcept to the extent the securityholders of the Top Fund havedirected;

(r) in addition to receiving the annual and, upon request, thesemi-annual financial statements, of the Top Fund, securityholdersof the Top Funds have received appropriate summary disclosurein respect of the Top Fund's holdings of securities of the UnderlyingFunds in the financial statements of the Top Fund; and

(s) to the extent that the Top Fund and the Underlying Fundsdo not use a combined simplified prospectus and annual informationform containing disclosure about the Top Fund and the UnderlyingFunds, copies of the simplified prospectus and annual informationform of the Underlying Funds have been provided upon requestto securityholders of the Top Fund and the right to receivethese documents is disclosed in the simplified prospectus ofthe Top Fund.

January 9, 2002.

"David Brown"      "R. Stephen Paddon"