Securities Law & Instruments


Investmentby RSP "clone" fund in another mutual fund for specified purposeexempted from the reporting requirements and self-dealing provisionsof s.113 and s.117.


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
















WHEREASthe local securities regulatory authority or regulator (the"Decision Maker") in each of the provinces of British Columbia,Alberta, Saskatchewan, Ontario, Nova Scotia and Newfoundlandand Labrador (the "Jurisdictions") has received an applicationfrom Fidelity Investments Canada Limited ("Fidelity"), as managerof the Fidelity RSP Global Opportunities Fund (the "ExistingTop Fund") and other mutual funds managed by Fidelity afterthe date of this Decision (defined herein) having an investmentobjective that is linked to the returns of another specifiedFidelity mutual fund while remaining 100% eligible for registeredplans (together with the "Existing Top Fund", the "Top Funds")for a decision by each Decision Maker (collectively, the "Decision")pursuant to the securities legislation of the Jurisdictions(the "Legislation") that the following provisions of the Legislation(the "Applicable Requirements") shall not apply to the Top Fundsor Fidelity, as the case may be, in respect of certain investmentsto be made by the Top Funds in an Underlying Fund (as hereinafterdefined) from time to time:

1.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

2.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.

ANDWHEREAS under the Mutual Reliance Review System forExemptive Relief Applications (the "System"), the Ontario SecuritiesCommission is the principal regulator for this application;

ANDWHEREAS Fidelity has represented to the Decision Makersthat:

1.Fidelity is a corporation established under the laws of theProvince of Ontario and its head office is located in Ontario.Fidelity is or will be the manager of the Top Funds and theUnderlying Funds (collectively, the "Funds").

2.The Top Funds are or will be open-end mutual fund trusts andthe Underlying 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 Fundsare or will be qualified for distribution under a simplifiedprospectus and annual information form filed in each of theJurisdictions.

3.Each of the Funds is or will be a reporting issuer and not indefault of any requirements of the Legislation.

4.Fidelity is the manager of the Fidelity Global OpportunitiesFund (the "Existing Underlying Fund"). Fidelity may in the futurebe the manager of other mutual funds in which the Top Fundswill invest their assets (the "Future Underlying Funds" andcollectively with the Existing Underlying Fund, the "UnderlyingFunds").

5.The simplified prospectus of the Top Funds will disclose theinvestment objectives, investment strategies, risks and restrictionsof the Top Funds and the Underlying Funds. The investment objectiveof each Top Fund will disclose the name of the Underlying Fund.

6.To achieve its investment objective, each Top Fund will investits assets such that the units of the Top Fund will, in theopinion of tax counsel to the Top Fund, be "qualified investments"for registered retirement savings plans, registered retirementincome funds, deferred profit sharing plans and similar plans("Registered Plans") and will not constitute "foreign property"under the Income Tax Act (Canada) (the "Tax Act").This will primarily be achieved through the implementation ofa derivative strategy that provides a return linked to the returnsof a specified Underlying Fund. The Top Fund will also investa portion of its assets directly in securities of the UnderlyingFund. This investment will at all times be below the maximumforeign property limit for Registered Plans (the "PermittedLimit").

7.The investment objective of each Underlying Fund is or willbe achieved through investment primarily in foreign securities.

8.The amount of direct investment by each Top Fund in its correspondingUnderlying Fund will be adjusted from time to time so that,except for the transitional cash (i.e. cash from purchases notyet invested or cash held to satisfy redemptions), the aggregateof the derivative exposure to, and direct investment in, theUnderlying Fund will equal 100% of the assets of the Top Fund.

9.Except to the extent evidenced by this Decision and specificapprovals granted by the Decision Makers pursuant to NationalInstrument 81-102 ("NI81-102"), the investments by the Top Fundsin the Underlying Funds have been structured to comply withthe investment restrictions of the Legislation and NI 81-102.

10.In the absence of this Decision, each Top Fund is prohibitedfrom knowingly making or holding an investment in an UnderlyingFund 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, Fidelity 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.

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker;

ANDWHEREAS each Decision Maker is satisfied that the testcontained in the Legislation that provides the Decision Makerwith the jurisdiction to make the Decision has been met.

THEDECISION of the Decision Makers under the Legislationis that the Applicable Requirements shall not apply so as toprevent the Top Funds from making or holding an investment insecurities of the Underlying Funds, or so as to require Fidelityto file a report relating to the purchase or 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 a DecisionMaker, will terminate one year after the publication in finalform of any legislation or rule of that Decision Maker dealingwith matters in subsection 2.5 of NI81-102.

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

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

(b) the investment by the Top Fund in the Underlying Fund iscompatible with the fundamental investment objectives of theTop Fund;

(c) the investment objective of the Top Fund discloses thatthe Top Fund invests directly and indirectly (through derivativeexposure) in the Underlying Fund, the name of the UnderlyingFund and that the Top Fund is fully eligible for registeredplans;

(d) the Underlying Fund is not a mutual fund whose investmentobjective includes investing directly or indirectly in othermutual funds;

(e) the Top Fund restricts its direct investment in the UnderlyingFund to a percentage of its assets that is within the PermittedLimited;

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

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

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

(i) no fees and charges of any sort are paid by the Top Fundand the Underlying Fund, by their respective managers or principaldistributors, or by any affiliate or associate of any of theforegoing entities to anyone in respect of the Top Fund's purchase,holding or redemption of the securities of the Underlying Fund;

(j) the arrangements between or in respect of the Top Fund andthe Underlyng Fund are such as to avoid the duplication of managementfees;

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

(l) all of the disclosure and notice material prepared in connectionwith a meeting of securityholders of the Underlying Fund 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 Fundexcept to the extent the securityholders of the Top Fund havedirected;

(m) in addition to receiving the annual and, upon request, thesemi-annual financial statements, of the Top Fund, securityholdersof the Top Fund have received the annual and, upon request,the semi-annual financial statements, of the Underlying Fundin either a combined report, containing financial statementsof the Top Fund and Underlying Fund, or in a separate reportcontaining the financial statements of the Underlying Fund;and

(n) to the extent that the Top Fund and the Underlying Funddo not use a combined simplified prospectus and annual informationform containing disclosure about the Top Fund and the UnderlyingFund, copies of the simplified prospectus and annual informationform of the Underlying Fund 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.

January15, 2002.

"HowardI. Wetston"       "R. Stephen Paddon"