Exemption from certain duplicate fees otherwisedue under subsection 14(1) of Schedule I of the Regulation madeunder the Securities Act on the distribution of units made byan underlying fund arising in the context of RSP "clone"fund structures and fund-on-fund structures.
Regulation made under the Securities Act, R.S.O.1990, Reg. 1015, as am., Schedule I, ss. 14(1) and 59(1).
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")
IN THE MATTER OF
AGF FUNDS INC.
HARMONY RSP NORTH AMERICANSMALL CAP POOL
HARMONY RSP OVERSEAS EQUITY POOL
HARMONY RSP U.S. EQUITY POOL
(Subsection 59(1) of Schedule I of the Regulation made underthe Act (the "Regulation"))
UPON the application (the "Application")of AGF Funds Inc. ("AGF") in its own capacity andon behalf of Harmony RSP North American Small Cap Pool (to berenamed Harmony RSP Americas Small Cap Equity Pool), HarmonyRSP Overseas Equity Pool and Harmony RSP U.S. Equity Pool andother mutual funds managed by AGF having an investment objectiveor strategy that is linked to the returns or portfolio of anotherspecified AGF managed mutual fund while remaining 100% eligiblefor registered plans (collectively, the "Top Pools")and Harmony Americas Small Cap Equity Pool, Harmony OverseasEquity Pool and Harmony U.S. Active Equity Pool (to be renamedHarmony U.S. Equity Pool) or other corresponding AGF managedmutual funds from time to time (collectively, the "UnderlyingPools") to the Ontario Securities Commission (the "Commission")for an order pursuant to subsection 59(1) of Schedule I of theRegulation exempting the Underlying Pools from paying duplicatefiling fees to the Commission in respect of the distributionof securities of the Underlying Pools to the Top Pools and thedistribution of securities of the Underlying Pools on the reinvestmentof distributions on such securities;
AND UPON considering the Applicationand the recommendation of staff of the Commission;
AND UPON AGF having represented to theCommission as follows:
1. AGF is a corporation established under thelaws of the Province of Ontario with its head office in Toronto,Ontario. AGF is the manager and trustee of the Top Pools andthe Underlying Pools.
2. Each of the Top Pools is, or will be, anopen-end mutual fund trust established under the laws of theProvince of Ontario.
3. Each of the Underlying Pools is, or willbe, a trust established under the laws of Ontario and each ofthe future Underlying Pools will be either a trust or a corporation.
4. The securities of the Top Pools and the UnderlyingPools are or will be qualified for distribution pursuant toa simplified prospectus and annual information form.
5. The Top Pools and the Underlying Pools areor will be reporting issuers in Ontario and are not in defaultof any requirements of the Securities Act (Ontario).
6. At a meeting to be held on May 16, 2002,the holders of the Existing Top Pools will be requested to approvea change in investment objective such that the investment objectivewill be to provide long-term growth of capital while maintaining100% eligibility for registered plans, by entering into forwardcontracts and other derivatives instruments that are linkedto the performance of the applicable Underlying Pool or to theperformance of portfolio securities of the applicable UnderlyingPool. Each Top Pool may also invest directly in the applicableUnderlying Pool up to the amount prescribed from time to timeas the maximum permitted amount which may be invested in foreignproperty under the Income Tax Act (Canada) without the impositionof tax.
7. If the change in investment objective isapproved, the change of the Existing Top Pools to an 'RSP clonefund' is expected to occur in June, 2002 or such other dateas determined solely by AGF.
8. Applicable securities regulatory approvalsand related exemptive relief for the RSP clone fund structurehave been requested by application dated March 12, 2002 (MRRSApplication Nos. 192/02 and 193/02).
9. In the absence of this Order, annually, eachTop Pool is required to pay filing fees to the Commission inrespect of the distribution of its units in Ontario pursuantto Section 14 of Schedule I of the Regulation and is similarlyrequired to pay fees based on the distribution of its unitsin other relevant Canadian jurisdictions pursuant to the applicablesecurities legislation in each of those jurisdictions.
10. In the absence of this Order, annually,each Underlying Pool is required to pay filing fees to the Commissionin respect of the distribution of its securities in Ontario(including securities issued to the Top Pool or counterparty)pursuant to Section 14 of Schedule I of the Regulation and issimilarly required to pay fees based on the distribution ofits securities in other relevant Canadian jurisdictions pursuantto the applicable securities legislation in each of those jurisdictions.
11. A duplication of filing fees pursuant toSection 14 of Schedule I of the Regulation may result when:(a) assets of the Top Pools are invested in an Underlying Pool;and (b) a distribution is paid by an Underlying Pool on securitiesof the Underlying Pool held by a Top Pool which are reinvestedin additional securities of the Underlying Pool ("ReinvestedSecurities").
AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;
IT IS ORDERED by the Commission pursuantto subsection 59(1) of Schedule I of the Regulation that theUnderlying Pools are exempt from the payment duplicate filingfees on an annual basis pursuant to section 14 of Schedule Iof the Regulation in respect of the distribution of securitiesof the Underlying Pools to the Top Pools and the distributionof Reinvested Securities, provided that each Underlying Poolshall include in its notice filed under subsection 14(4) ofSchedule I to the Regulation a statement of the aggregate grossproceeds realized in Ontario as a result of the issuance bythe Underlying Pools of: (1) securities distributed to the TopPools; and (2) Reinvested Securities; together with a calculationof the fees that would have been payable in the absence of thisOrder.
May 14, 2002.
"Theresa McLeod" "Robert Shirriff"