Securities Law & Instruments


A variationorder granted to labour sponsored investment fund corporationto permit it to pay co-operative marketing expenses out of fundassets contrary to section 2.1 of National Instrument 81-105 MutualFund Sales Practices.


SecuritiesAct, R.S.O. 1990, c.S.5, as am. S.144


NationalInstrument 81-105 Mutual Fund Sales Practices.



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









(Section144 of the Act)

WHEREASon December 29, 2000 the Ontario Securities Commission (the "Commission")granted VentureLink Fund Inc. (the "Fund") relief from section2.1 of National Instrument 81-105 to make certain payments toparticipating dealers in connection with the distribution of ClassA Shares, Series I and Class A Shares, Series II of the Fund (the"Prior Decision");

ANDWHEREAS the Prior Decision does not provide relief forthe Fund to pay co-operative marketing expenses (the "Co-op Expenses")incurred by certain dealers;

ANDWHEREAS the Commission has received an application fromthe Fund for an order pursuant to section 144 of the Act to varythe Prior Decision to allow the Fund to pay Co-op Expenses toparticipating dealers;

ANDWHEREAS the Fund has represented to the Commission asfollows:

1.The Fund is a corporation incorporated under the Canada BusinessCorporations Act. The Fund is registered as a labour sponsoredinvestment fund corporation under the Community Small BusinessInvestment Funds Act (Ontario), as amended, and is a prescribedlabour-sponsored venture capital corporation under the IncomeTax Act (Canada), as amended.

2.The Class A Shares, Series I and the Class A Shares, Series IIin the capital of the Fund (collectively the "Class A Shares")are currently qualified for distribution in the Province of Ontariopursuant to a prospectus dated January 10, 2002 (the "Prospectus").

3.The Fund desires to provide for the reimbursement of Co-op Expensesincurred by certain dealers in promoting sales of Class A Shares,pursuant to co-operative marketing programs the Fund may enterinto with such dealers.

4.It is disclosed in the Prospectus that subject to regulatory approvalthe Fund intends to provide for the reimbursement of Co-op Expenses.

5.Requiring the manager of the Fund to pay the Co-op Expenses whilegranting an exemption to other labour funds permitting such fundsto pay similar Co-op Expenses directly, would put the Fund ata permanent and serious competitive disadvantage with its competitors.

6.The Fund undertakes to comply with all other provisions of NI81-105 other than those provisions from which the Fund has beengranted relief.

ITIS ORDERED pursuant to section 144 of the Act that thePrior Decision is hereby varied, replacing paragraph 5 of thePrior Decision with the following representation:

"TheFund intends to pay certain costs of distributing its shares directlyto participating dealers. With respect to the distribution ofClass A Shares, Series I, these costs will be a sales commissionof 6% of the net asset value per Class A Share, Series I purchased,a commission of 4% of the net asset value per Class A Share, SeriesI purchased in lieu of service fees, and a corporate finance feeof 0.5% of the gross proceeds raised on the initial offering ofClass A Shares, Series I. With respect to the distribution ofClass A Shares, Series II, these costs will be a sales commissionof 3% of the net asset value per Class A Share, Series II purchased,and a corporate finance fee of 0.5% of the gross proceeds raisedon the initial offering of Class A Shares, Series II. The Fundintends to pay for the co-operative marketing expenses incurredon its behalf by certain participating dealers pursuant to co-operativemarketing programs entered into with such dealers. Collectively,the sales commissions, the 4% commission, the corporate financefees and the Co-op Expenses are referred to as the "DistributionCosts"."

THISORDER is subject to the following conditions:

(a)the Co-op Expenses are otherwise permitted by, and paid in accordancewith NI 81-105, except to the extent that the Fund has previouslybeen granted specific relief under NI 81-105; and

(b)Co-op Expenses are expensed when incurred for accounting purposes.

March15, 2002.

"PaulM. Moore"       "H. Lorne Morphy"