Securities Law & Instruments

Headnote

Issuance of units of a mutual fund to pensionplans of a related party, as beneficial owners, exempted fromthe requirements of s. 111(2)(a), (b) and (c), 111(3) of theSecurities Act and sections 7.3 and 7.5 of Rule 45-501.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990, c. S.5.,as am., 111(2)(a),(b) and (c), 111(3), 113 and 147 and sections7.3 and 7.5 of Rule 45-501.

IN THE MATTER OF
THE SECURITIES ACT R.S.O. 1990, c.S.5, as amended

AND

IN THE MATTER OF
BIMCOR INC.

ORDER

WHEREAS the Ontario Securities Commission(the "Commission") has received an application fromBimcor Inc. ("Bimcor" or the "Applicant")for a decision pursuant to:

(i) section 113 of the Securities Act (Ontario)(the "Act") that the provisions of section 111(2)(a),111(2)(c) and 111(3) do not apply to a mutual fund (the "NewFund"), to be established by Bimcor, in respect of investmentsby the New Fund in the publicly traded securities of BCE Inc.or the publicly traded securities of any issuer in which BCEInc. has a significant interest (a "BCE Affiliate");

(ii) section 113 of the Act that the provisionsof section 111(2)(b) do not apply to the BCE Master Trust Fund(the "Master Trust") in respect of the investmentin the New Fund; and

(iii) under section 147 of the Act that theprovisions of section 7.3 and 7.5 of Rule 45-501 of the Commission("Rule 45-501") do not apply in respect of the issueof units by the New Fund;

AND WHEREAS the Applicant has representedto the Commission that:

1. Bimcor is a Canadian corporation which isan indirectly wholly-owned subsidiary of BCE Inc.

2. Bimcor is registered under the Act as anadviser in the category of investment counsel and portfoliomanager.

3. The New Fund will be established as an investmenttrust fund and will be a mutual fund in Ontario. It will becalled the Bimcor Balanced Pooled Fund. The New Fund will issueonly one series of one class of units. The trustee of the NewFund will be Royal Trust. Bimcor will be the investment managerof the New Fund.

4. Within the meaning of section 110(2) of theAct, BCE Inc., indirectly, is a substantial security holder,of Bimcor which will be the management company of the New Fund,within the meaning of section 1 of the Act, and within the meaningof section 110(2) of the Act , BCE Inc. holds a significantinterest in a number of reporting issuers (each, a "BCEAffiliate") directly or indirectly.

5. Bimcor acts as investment manager of a numberof investment vehicles for pension funds of the BCE group, includingthe Master Trust.

6. The Master Trust is a mutual fund in Ontario,within the meaning of the Act. The Royal Trust Company ("RoyalTrust") is the trustee of the Master Trust. The units ofthe Master Trust are held only by the Bell Canada Pension Fund,the BCE Pension Fund and other registered pension plans, theparticipants in which are employees of one or more corporationsin the BCE group.

7. Initially, units in the New Fund will beacquired by the Master Trust. The amount paid by the MasterTrust for its units in the New Fund will represent seed capitalfor the New Fund.

8. At the time the Master Trust acquires unitsof the New Fund it will be a substantial security holder ofthe New Fund, within the meaning of section 110(2) of the Act.

9. Shortly after the establishment of the NewFund and from time to time thereafter, units in the New Fundwill be acquired by a Canadian insurance corporation (the "InsuranceCo"). The Insurance Co will hold its investment in theNew Fund in a segregated fund (the "Segregated Fund")established in respect of the issuance by the Insurance Co ofvariable annuity contracts to several plans (the "DC PensionPlans") each of which is a registered pension plan subjectto the requirements of the Pension Benefits Standards Act (Canada)(the "PBSA") and/or applicable provincial pensionbenefits legislation.

10. The participants in the DC Pension Plansare employees of one or more corporations in the BCE group.The Segregated Fund may also support the issuance by the InsuranceCo. of variable annuity contracts to Group RRSPs establishedfor the benefit of employees of one or more corporations inthe BCE Group.

11. It is not currently anticipated that anypersons other than the Master Trust and the Insurance Co (the"Investors") will acquire units in the New Fund.

12. The issue of units of the New Fund to theMaster Trust will be pursuant to the prospectus and registrationexemptions in sections 1.1 and 1.2 of Rule 32-503 of the Commission("Rule 32-503"). The issue of units of the New Fundto the Insurance Co will be pursuant to the prospectus and registrationexemption requirements of section 2.3 of Rule 45-501.

13. The participants in the DC Pension Plansand the Group RRSPs will receive an information document relatingto the Segregated Fund from the Insurance Co. This documentwill contain information about the New Fund pursuant to therules relating to the distribution of segregated funds.

14. The New Fund will establish a portfolioof investments by acquiring securities including publicly tradedsecurities issued by BCE Inc. or a BCE Affiliate. At all relevanttimes, the New Fund will restrict the amount of foreign propertyacquired by it to the limit prescribed by the Regulations underthe Income Tax Act (Canada). At all times, the New Fund willrestrict its investments in BCE Inc. or in a BCE Affiliate tonot more than 10% of the book value of the assets of the NewFund and will comply with the other investment requirementsof the PBSA. As a result the DC Pension Plans will be permittedto invest more than 10% of the book value of their assets inthe New Fund.

15. The DC Pension Plans are permitted underthe PBSA to acquire publicly traded securities issued by BCEInc. or a BCE Affiliate.

16. The New Fund is being established as aninvestment vehicle through which the funds of the DC PensionPlans may be invested. The Master Trust will acquire units ofthe New Fund solely to provide seed capital for the New Fund.

17. The DC Pension Plans and the Master Trustare regulated by the PBSA and are permitted under the PBSA toinvest directly in the publicly traded securities of BCE Inc.and BCE Affiliates, subject to the provisions of the PBSA. TheDC Pension Plans and the Master Trust are also permitted underthe PBSA to invest more than 10% of their net assets in a mutual,pooled or segregated fund provided that the mutual, pooled orsegregated fund complies with the investment requirements ofthe PBSA.

18. In the absence of the relief requested,sections 111(2)(a), 111(2)(c) and 111(3) of the Act will preventthe New Fund from investing in and holding publicly traded securitiesissued by BCE Inc. or a BCE Affiliate.

19. In the absence of the relief requested,section 111(2)(b) of the Act will prevent the Master Trust frominvesting in units issued by the New Fund if such investmentwould result in the Master Trust owning more than 20% of theunits of the New Fund.

20. In the absence of the relief requested,the New Fund will be required to file Form 45-501F1 and paythe corresponding fees with respect to the issuance of unitsto the Insurance Co.

AND WHEREAS pursuant to the Act, thisOrder evidences the decision of the Commission;

AND WHEREAS the Commission is of theopinion that it is the best interests of the New Fund and thatit would not be prejudicial to the public interest to make thisOrder;

IT IS ORDERED pursuant to the Act that:

1. the provisions of section 111(2)(a), 111(2)(c)and 111(3) do not apply to the New Fund in respect of investmentsby the New Fund in the publicly traded securities of BCE Inc.or a BCE Affiliate;

2. the provisions of section 111(2)(b) do notapply to the Master Trust in respect of the investment in theNew Fund; and

3. the provisions of section 7.3 and 7.5 ofRule 45-501 do not apply in respect of the issue of units bythe New Fund;

PROVIDED THAT IN RESPECT OF:

1. investments by the New Fund in publicly tradedsecurities of BCE Inc. or a BCE Affiliate, the New Fund complieswith the PBSA and/or applicable provincial pension benefitslegislation; and

2. investments by the Master Trust in the NewFund, the Master Trust complies with the PBSA and/or applicableprovincial pension benefits legislation.

May 17, 2002.

"Paul M. Moore"      "Robert W. Korthals"