Subsection 74(1) - trades in securities by fundsnot subject to registration and prospectus requirements - tradesby funds would be exempt from registration and prospectus exemptionsif all investors in underlying fund were accredited investors- investors in underlying fund may, or may not, be "accreditedinvestors" within the meaning of Rule 45-501 - investorsin underlying fund exempt from registration and prospectus requirementspursuant to previous MRRS decision document
Securities Act, R.S.O. 1990, c.S.5, as am.,ss.25, 53, 74(1)
Rule 45-501 Exempt Distributions (2001), 24O.S.C.B. 5549
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")
IN THE MATTER OF
TD SECURITIES FUND-OF-FUNDS CO-INVESTMENT (CANADA) L.P.
IN THE MATTER OF
TD CAPITAL PRIVATE EQUITY INVESTORS
HOLDINGS (CANADA) L.P.
UPON the application (the "Application")of TD Securities Fund-of-Funds Co-Investment (Canada) L.P. (the"Fund") and TD Capital Private Equity Investors Holdings(Canada) L.P. ("Holdings") to the Ontario SecuritiesCommission (the "Commission") for a ruling pursuantto subsection 74(1) of the Act, that the acquisition by theFund and Holdings of investments in private equity investmentfunds ("Portfolio Funds") not be subject to sections25 and 53 of the Act;
AND UPON considering the Applicationand the recommendation of staff of the Commission;
AND UPON the Fund and Holdings havingrepresented to the Commission that:
1. The Fund is a limited partnership formedon March 8, 2002 by the filing of a declaration under the LimitedPartnerships Act (Ontario) and pursuant to its limited partnershipagreement (the "Partnership Agreement").
2. TD Securities Co-Investment Management (Canada)Ltd., a corporation existing under the Business CorporationsAct (Ontario), is the general partner of the Fund (the "GeneralPartner").
3. The Fund is not a reporting issuer in theProvince of Ontario or in any other Canadian jurisdiction andhas no intention of becoming a reporting issuer in the future.
4. The principal place of business of the Fundand the registered office of the General Partner are in Toronto,Ontario.
5. Holdings is a limited partnership formedon March 7, 2002 by the filing of a declaration under the LimitedPartnerships Act (Ontario) and pursuant to its limited partnershipagreement (the "Holdings Partnership Agreement").
6. Holdings is not a reporting issuer in theProvince of Ontario or in any other Canadian jurisdiction andhas no intention of becoming a reporting issuer in the future.
7. The principal place of business of Holdingsis in Toronto, Ontario.
8. The purpose of the Fund is to permit certainemployees of The Toronto-Dominion Bank and its affiliates (collectively,"TD Bank") to invest their own funds on a parallelbasis with a private equity fund established by TD Capital GroupLimited (the "TD Capital Fund"), the private equityarm of The Toronto-Dominion Bank.
9. Each employee participating in the Fund isan "Eligible Employee" as defined in the Mutual RelianceReview System Decision Document dated November 27, 2001 (the"MRRS Decision Document") or an "accredited investor"within the meaning of Ontario Securities Commission Rule 45-501Exempt Distributions ("OSC Rule 45-501"). Each participantin the TD Capital Fund will be an "accredited investor"within the meaning of OSC Rule 45-501 (for participants in provincesand territories other than Alberta and British Columbia) oran "accredited investor" within the meaning of MultilateralInstrument 45-103 (for participants in the Provinces of Albertaand British Columbia).
10. The Fund has been authorized to issue units("Units"), which are non-redeemable and subject torestrictions on transfer contained in the Partnership Agreementthat are consistent with the terms of the MRRS Decision Document.
11. Units have been offered under a confidentialoffering memorandum containing the rights prescribed by theMRRS Decision Document, a copy of which has been delivered toeach Decision Maker (as defined in the MRRS Decision Document).
12. Pursuant to the Holdings Partnership Agreement,the Fund and the TD Capital Fund are the limited partners ofHoldings.
13. The limited partnership interests of Holdingsare non-redeemable and subject to restrictions on transfer containedin the Holdings Partnership Agreement.
14. The sole purpose of Holdings is to act asan investment vehicle through which the Fund and the TD CapitalFund will make and hold substantially all of their investmentsin North American and European Portfolio Funds.
15. Holdings may from time to time invest inPortfolio Funds through one or more investment companies, partnerships,limited liability companies, trusts or other form of legal entity(each, an "Investment Entity") for tax, regulatoryor other reasons.
16. Since the Fund and Holdings intend to investexclusively in Portfolio Funds that are not listed or tradedon a public market and do not intend to invest directly in thesecurities of any issuer that is listed or traded on a publicmarket, the investment activities of the Fund and Holdings willbe limited to acquiring securities on a private placement basis.
17. An exemption contained in OSC Rule 45-501permits a non-redeemable investment fund to acquire securitieswithout complying with sections 25 and 53 of the Act providedthat such fund distributes its securities only to persons orcompanies that are "accredited investors".
18. As each limited partner of the Fund is participatingin the Fund as an Eligible Employee under the MRRS DecisionDocument and does not necessarily qualify as an "accreditedinvestor", no exemption is available to the Fund, Holdingsor, in certain circumstances, an Investment Entity, to permitthem to acquire investments in Portfolio Funds without complyingwith sections 25 and 53 of the Act.
AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;
IT IS RULED, pursuant to subsection 74(1)of the Act, that trades in securities to the Fund, Holdingsand an Investment Entity for purposes of acquiring investmentsin Portfolio Funds will not be subject to sections 25 and 53of the Act, provided that the first trade in such securitieswill be a distribution.
April 26, 2002.
"Paul Moore" "Theresa McLeod"