Securities Law & Instruments



Mutualfund dealer exempted from the Dealer Registration Requirementof the Legislation of the Jurisdictions for trades of common sharesmade by a mutual fund dealer, in its capacity as a group planadministrator of an employee retirement savings program of a corporation,for, or on behalf of, employees, former employees, spouses ofemployees, spouses of former employees, the DCPP, Employee LIRAs,employee RRSPs and employee spouse RRSPs, subject to certain termsand conditions.


Relieffrom "suitability" requirement in paragraph 1.5(1)(b) of OSC Rule31-505, pursuant to section 4.1 of OSC Rule 31-505, that wouldotherwise arise as a result of the group plan administrator purchasingor selling common shares for, or on behalf of, the above-mentionedpersons, subject to the above-mentioned persons receiving a correspondingacknowledgment or having been sent a corresponding notice andthe group plan administrator not making any recommendation orgiving any investment advice regarding the purchase and sale ofcommon shares of the corporation.

ApplicableOntario Statute

SecuritiesAct, R.S.O. 1990, c. S.5, as am., ss. 25 and 74(1).

ApplicableOntario Securities Commission Rule

Rule31-505 "Conditions of Registration" (1999) 22 O.S.C.B. 731, ss.1.5 and 4.1.














WHEREASthe local securities regulatory authority or regulator (the"Decision Maker") in each of Alberta and Ontario (the "Jurisdictions")has received an application from Fidelity Investments CanadaLimited ("Fidelity") for a decision under the securities legislationof the Jurisdictions (the "Legislation") that the requirement(the "Dealer Registration Requirement") in the Legislation thatprohibits a person or company from trading in a security unlessthe person or company is registered in the appropriate categoryof registration under the Legislation shall not apply to certaintrades in shares ("Common Shares") of common stock of ValsparCorporation ("Valspar U.S.") to be made by Fidelity for, oron behalf of, persons that are Employees, Spouses, Former Employees,Former Employees' Spouses, the DCPP, Employee RRSPs, EmployeeSpouse RRSPs and Employee LIRAs (as such terms are defined below)in its capacity as a group plan administrator of a group retirementsavings plan (the "Program") of Valspar Inc. ("Valspar Canada")(which includes the DCPP, Employee RRSPs, Employee Spouse RRSPsand Employee LIRAs);

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commissionis the principal regulator for this application;

ANDWHEREAS Fidelity has represented to the Decision Makersthat:

1.Fidelity, a corporation continued under the laws of Ontario, isregistered in the Jurisdictions as a dealer in the category of"mutual fund dealer" and is also registered as an "adviser" inthe categories of "investment counsel" and "portfolio manager".

2.Fidelity obtained relief pursuant to the Legislation of the Jurisdictions(the "MFDA Relief"), exempting it from the requirements underthe Legislation: (i) to be a member of the Mutual Fund DealersAssociation of Canada (the "MFDA") on or before July 2, 2002;and (ii) to file with the MFDA an application for membership andcorresponding fees for membership before the required date underthe Legislation of the Jurisdictions.

3.Fidelity's registration under the Legislation of the Jurisdictionsas a "mutual fund dealer" has been restricted to certain tradeswhich are incidental to its principal business. The restrictedtrading activity includes trades by Fidelity to a participantin an employer-sponsored registered plan or other savings plan(the "Group Retirement Clients") until the earlier of: (i) theassumption of such trading activity by Fidelity Retirement ServicesCompany of Canada Limited ("New Fidelity"), a wholly-owned subsidiaryof Fidelity; and (ii) July 2, 2002.

4.At the time of receiving the MFDA Relief, Fidelity intendedto transfer its Group Retirement Clients to New Fidelity. However,upon review of the business needs of the Group Retirement Clients,Fidelity has determined that the Group Retirement Clients wouldbe more appropriately serviced by a member of the InvestmentDealers Association of Canada (the "IDA"), than a member ofthe MFDA.

5.As part of a separate business initiative, Fidelity has incorporatedanother wholly-owned subsidiary, Fidelity Intermediary SecuritiesCompany Limited (the "IDA Company"), which will submit an applicationfor registration as an investment dealer in each Canadian jurisdictionand an application for membership in the IDA.

6.Fidelity proposes to transfer the Group Retirement Clients tothe IDA Company and to run its business of servicing the groupretirement business (the "Group Retirement Business") as a divisionof the IDA Company once the IDA Company has become registeredin each Canadian jurisdiction and has been admitted to membershipwith the IDA and certain systems and other changes are madethat will ensure the Group Retirement Business can be conductedin a manner which is compliant with the IDA By-laws and Rules.

7.Fidelity has applied in Ontario and Alberta for orders varyingthe terms of the MFDA Relief to allow Fidelity to trade in securities,where the trade is made to Group Retirement Clients until theearlier of the assumption of such trading activity by the IDACompany and December 31, 2002. Fidelity has applied or willapply for similar orders, as required, in certain other Canadianjurisdictions (collectively, the "Extension Applications").

8.Valspar U.S. is a corporation incorporated under the laws ofthe State of Delaware.

9.Valspar U.S. is a manufacturer of coatings.

10.Valspar U.S. is not a reporting issuer (or the equivalent) underthe Legislation in any of the Jurisdictions.

11.Valspar Canada, a corporation incorporated under the laws ofCanada, is not a reporting issuer (or the equivalent) underthe Legislation in any of the Jurisdictions.

12.Valspar Canada is also a manufacturer of coatings.

13.Valspar Canada is wholly-owned by Valspar U.S.

14.The Common Shares are registered with the Securities and ExchangeCommission in the United States of America (the "USA") underthe Securities Exchange Act of 1934 and Valspar U.S. is subjectto the reporting requirements thereunder.

15.The Common Shares are listed and posted for trading on the NewYork Stock Exchange (the "NYSE").

16.Under the Program, Valspar Canada selects mutual funds thatpersons (each, an "Employee") who are employees of Valspar Canada,and who participate in the Program, may purchase through payrolldeductions or through lump sum payments.

17.Investments made by Employees under the Program are made throughthe following plans:

(a)a "defined contribution pension plan" (the "DCPP"), as definedin the Income Tax Act (Canada) (the "Tax Act"), thathas been established for the benefit of Employees;

(b)"registered retirement savings plans" (each, an "Employee RRSP"),as defined in the Tax Act, that have been established by orfor the benefit of Employees;

(c)"registered retirement savings plans" (each, an "Employee SpouseRRSP"), as defined in the Tax Act, that have been establishedby or for the benefit of persons (collectively, "Spouses") whoare legally married to or are the "common law partners" (asdefined in the Tax Act) of Employees; and

(d)locked-in retirement accounts (each, an "Employee LIRA"), registeredwith the Canada Customs and Revenue Agency, that have been establishedby or for the benefit of Employees;

18.Under the Program, Spouses are also permitted to invest amountsin their Employee Spouse RRSPs in certain mutual funds offeredthrough Fidelity.

19.Under the Program, Valspar Canada proposes to permit Employeesto purchase Common Shares through the DCPP, their Employee RRSPs,their Employee Spouse RRSPs and their Employee LIRAS, and topermit Spouses to purchase Common Shares through their EmployeeSpouse RRSPs.

20.Valspar Canada also proposes to match a specified portion ofan Employee's purchases of Common Shares under the Program.These matching contributions from Valspar Canada will be investedin Common Shares through the DCPP.

21.Under the Program, it is proposed that Fidelity carry out thefollowing activities:

(a)receive orders from Employees to purchase Common Shares (includingCommon Shares to be purchased with employer matching contributionsthrough the DCPP or upon the automatic reinvestment of dividendspaid in respect of Common Shares) on behalf of Employees throughthe DCPP or for their Employee RRSPs, their Employee SpouseRRSPs or their Employee LIRAs;

(b)receive orders from Spouses to purchase Common Shares (includingCommon Shares to be purchased upon the automatic reinvestmentof dividends paid in respect of Common Shares) for their EmployeeSpouse RRSPs;

(c)receive orders from Employees, or from persons ("Former Employees")that were, but have since ceased to be, Employees, to sell CommonShares held on their behalf in the DCPP or through their EmployeeRRSPs or Employee LIRAs;

(d)receive orders from Spouses, Former Employees or persons ("FormerEmployee Spouses") who are legally married to or are the "commonlaw partners" of Former Employees, to sell Common Shares heldthrough their Employee Spouse RRSPs;

(e)"match" the orders to purchase Common Shares, referred to insubparagraphs (a) or (b), against orders to sell Common Shares,referred to in subparagraphs (c) or (d), with the offsettingpurchases and sales (a "Matching Transaction") effected by wayof book entries in the corresponding accounts maintained byFidelity under the Program and the funds received in respectof the purchase remitted by Fidelity to the vendor;

(f)where the number of Common Shares not affected in a MatchingTransaction is less than 50 and if Fidelity deems it to be appropriate,satisfy the purchase or sale of Common Shares from or to CommonShares held by Fidelity in the name of Fidelity (a "Float Transaction");

(g)transmit orders to purchase or sell Common Shares, referredto above, which are not effected in a Matching Transaction orFloat Transaction, either:

(i)for execution in a Jurisdiction through a registered dealerthat is registered under the Legislation, in each of the Jurisdictionswhere the order is received or executed, as a dealer in a categorythat permits it to act as a dealer for the subject trade; or

(ii)for execution through the facilities of the NYSE or anotherstock exchange outside of Canada through a person or companythat is appropriately licensed to carry on the business of abroker/dealer under the applicable securities legislation inthe jurisdiction where the trade is executed;

(h)maintain books and records in respect of the foregoing, reflecting,among other things: all related payments, receipts, accountentries and adjustments;

22.Records of Common Shares held under the Program on behalf ofEmployees, Former Employees, Spouses, Former Employee Spouses,the DCPP, Employee RRSPs, Employee Spouse RRSPs and EmployeeLIRAs (collectively, "Program Participants") will be maintainedby Fidelity, and the Common Shares will be held by a custodianthat is not affiliated with Fidelity, Valspar U.S. or ValsparCanada.

23.When an Employee becomes a Former Employee, the Former Employee,the DCPP in respect of the Former Employee, the Employee RRSPof the Former Employee, the Former Employee Spouse, the correspondingEmployee Spouse RRSP, and the Employee LIRA of the Former Employeewill not be permitted to make further purchases of Common Sharesunder the Program, other than Common Shares to be purchasedupon the automatic reinvestment of dividends paid in respectof Common Shares, but, subject to time limitations in certaincases, the foregoing will be permitted to continue to hold,through Fidelity, Common Shares previously purchased on theirbehalf under the Program, to instruct Fidelity from time totime to sell Common Shares then held on their behalf by Fidelity,or to transfer such Common Shares to an account with anotherdealer.

24.To participate in the Program, Employees and Spouses must enrolthrough Fidelity by application, which may be completed: inwriting; on the telephone, by way of a recorded call; or, throughthe Internet, by way of secure access to Fidelity's website.

25.Employees and Spouses who enrol in the Program will be requiredwhen completing the enrolment application to acknowledge thatFidelity will not be performing any "suitability" analysis withrespect to any purchase or sale of Common Shares on their behalf,or on behalf of their Spouse, under the Program: by signingthe application form, where the application is completed inwriting; orally, where the application is completed on the telephoneor, by making the appropriate selection on Fidelity's website,where the application is completed on the Internet.

26.No Program Participant will be charged any trading commissions,fees, costs or other expenses in respect of the purchase orsale of any Common Shares on behalf of the Program Participantunder the Program.

27.Except for ascertaining the "suitability" of trades made underthe Program, Fidelity will comply with all other conditionsor other requirements under the Legislation that would be applicableto it as a mutual fund dealer as if the Common Shares were sharesor units of a mutual fund, with respect to any purchase, saleor holding of Common Shares, by Fidelity on behalf of ProgramParticipants under the Program, including requirements relatingto, but not limited to: capital requirements; record keeping;account supervision; segregation of funds and securities; confirmationsof trades; "know your client" and statements of account.

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively,the "MRRS Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the MRRS Decision has beenmet;

THEMRRS DECISION of the Decision Makers under the Legislationis that the Dealer Registration Requirement under the Legislationshall not apply to the trades by Fidelity in Common Shares,as referred to in paragraph 21, on behalf of Program Participantsunder the Program, provided that: the case of each trade in Common Shares in a Jurisdiction,Fidelity is, at the time of the trade, registered under theLegislation of the Jurisdiction as a dealer in the categoryof "mutual fund dealer", and, the trade is made on behalf ofFidelity by a person that is registered under the Legislationto trade mutual funds on behalf of Fidelity as a salespersonor officer; the case of a trades that consist of the sale of Common Sharestransmitted for execution outside of the Jurisdiction, as describedin paragraph 21(g)(ii):

(a)at the time of the trade, Valspar U.S. is not a reporting issuer(or the equivalent) under the Legislation of the Jurisdiction;and

(b)at the time of the acquisition of the Common Shares by the sellingProgram Participant, there was a de minimis marketin the Jurisdiction (as defined below), where, for the purposesof the above, there shall be a de minimis market ina Jurisdiction if, at the relevant time:

(i)persons or companies whose last address as shown on the booksof Valspar U.S. was in the Jurisdiction and who held CommonShares:

(A)did not own directly or indirectly more than 10 per cent ofthe outstanding Common Shares; and

(B)did not represent in number more than 10 per cent of the totalnumber of owners directly indirectly of the Common Shares;

PROVIDEDALSO THAT, this MRRS Decision will terminate upon theearlier of:

1.the assumption of the activities referred to in paragraph 21by the IDA Company; and

2.July 2, 2002, or December 31, 2002 if the relief requested underthe Extension Applications is granted.

February12, 2002.

"TheresaMcLeod"       "H. Lorne Morphy"




WHEREASFidelity has made an application to the Director of theOntario Securities Commission (the "Director") for a decisionof the Director, pursuant to section 4.1 of Ontario SecuritiesCommission Rule 31-505 Conditions of Registration and to the AlbertaSecurities Commission (the "ASC") pursuant to section 185 of theSecurities Act (Alberta) (collectively, the "RegistrationLegislation"), that the requirements of the Registration Legislation(the "Suitability Requirements") to make enquiries of each ProgramParticipant, that would otherwise arise as a result of Fidelitypurchasing or selling Common Shares on behalf of the Program Participant,as described in the MRRS Decision above, to determine (a) thegeneral investment needs and objectives of the Program Participants;and (b) the suitability of a proposed purchase or sale of CommonShares for the Program Participants, do not apply to Fidelity,subject to certain terms and conditions;

ANDWHEREAS, Fidelity has made to the Director and the ASCthe same representations referred to in the above MRRS Decision;

ANDWHEREAS, this Decision Document evidences the decisionof each of the Director and the ASC;

ANDWHEREAS, each of the Director and the ASC is satisfiedthat to do so would not be prejudicial to the public interest;

ITIS THE DECISION of the Director and the ASC that, pursuantto the Registration Legislation, effective on the effective dateof the above MRRS Decision, the Suitability Requirements of theRegistration Legislation shall not apply to Fidelity as a resultof Fidelity purchasing or selling Common Shares on behalf of theProgram Participant, as described in the above MRRS Decision,provided that, in the circumstances of each such purchase or sale:

1.the Program Participant, or, in the case of a Program Participantthat is the DCPP, an Employee RRSP, an Employee Spouse RRSP oran Employee LIRA, the corresponding Employee or Spouse, has giventhe corresponding acknowledgement, referred to in paragraph 25of the above MRRS Decision; and

2.Fidelity does not make any recommendation or give any investmentadvice with respect to the purchase or sale.

ANDPROVIDED ALSO THAT, this Decision will terminate uponthe earlier of:

1.the assumption of the activities referred to in paragraph 21 ofthe above MRRS Decision by the IDA Company; and

2.July 2, 2002, or December 31, 2002 if the relief requested underthe Extension Applications is granted.

February12, 2002.

"RandeeB. Pavalow"