Securities Law & Instruments


Representatives of mutual funddealer exempted from the prohibition against payment of commission/feerebates to clients who switch investments from third party mutualfunds to mutual funds managed by affiliate of mutual fund dealer.

Rules Cited

National Instrument 81-105Mutual Fund Sales Practices, subsection 7.1(1), section 9.1.






WHEREAS the Canadiansecurities regulatory authorities or regulators (the "DecisionMakers") in the jurisdictions of Ontario, British Columbia,Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia,Newfoundland and Labrador, Prince Edward Island, the Yukon Territoryand the Northwest Territories have received an application fromManulife Securities International Ltd. ("Manulife")on behalf of itself and its current and future representatives(the "Representatives") from time to time for a decisionpursuant to section 9.1 of NI 81-105 that the prohibitions oncertain rebates ("Rebates") of redemption commissionor fees contained in paragraph 7.1(1)(b) of NI 81-105 shallnot apply to Rebates paid by Representatives to clients whoare switching from Third Party Funds (defined below) to Elliott& Page Funds (defined below) (the "Proprietary Rebates");

AND WHEREAS pursuantto the Mutual Reliance Review System for Exemptive Relief Applications(the "System"), the Ontario Securities Commissionis the principal regulator for this application;

AND WHEREAS Manulifehas represented to the Decision Makers as follows:

1. Manulife is registeredas a mutual fund dealer in all of the provinces of Canada,the Northwest Territories and the Yukon Territory. Manulifeis also registered as a limited market dealer in Ontario andNewfoundland.

2. Elliott & Page Limited("Elliott & Page") is the manager of the mutualfunds known as the Elliott & Page Group of Funds, theManulife Cabot Funds and the Elliott & Page InternationalFunds (Seamark) (these mutual funds together with any mutualfunds of which Elliott & Page becomes manager in the futureare referred to collectively as the "Elliott & PageFunds").

3. Manulife is an affiliateof Elliott & Page and is therefore a "member of theorganization" of the Elliott & Page Funds pursuantto NI 81-105.

4. Manulife is a participatingdealer of the Elliott & Page Funds as well as of othermutual funds not managed by Elliott & Page ("ThirdParty Funds");

5. Paragraph 7.1(1)(b) ofNI 81-105 prohibits Representatives from paying ProprietaryRebates to clients who are switching from Third Party Fundsto Elliott & Page Funds;

6. The relief is being appliedfor in order to facilitate the Proprietary Rebates;

7. The decision to pay suchProprietary Rebates will be made by the Representatives basedon the best interests of the particular client;

8. Representatives are notrequired by Manulife or any of its affiliates to sell Elliott& Page Funds to clients and accordingly have no quotasin respect of selling Elliott & Page Funds and are notprovided with incentives by Manulife (other than as permittedby NI 81-105) or any of its affiliates to sell Elliott &Page Funds.

AND WHEREAS pursuantto the System this Decision Document evidences the decisionof each Decision Maker (collectively, the "Decision");

AND WHEREAS each of theDecision Makers is satisfied that the test contained in NI 81-105that provides the Decision Maker with the jurisdiction to makethe decision has been met;

THE DECISION of the DecisionMakers pursuant to section 9.1 of NI 81-105 is that Manulifeshall be exempt from the prohibitions on payment of Rebatescontained in paragraph 7.1(1)(b) of NI 81-105 to the extentnecessary to allow Representatives to pay Proprietary Rebates;

PROVIDED that in respectof each such payment:

(i) Manulife, and the relevantRepresentative, as the case may be, complies with the informedwritten consent provisions of paragraph 7.1(1)(a) and thedisclosure and consent provisions of Part 8 of NI 81-105;

(ii) The Representative adviseseach client in advance that any Rebate proposed to be madeavailable by a Representative in connection with the purchaseof securities of Elliott & Page Funds (a) will be availableto the client regardless of whether the redemption proceedsare invested in an Elliott & Page Fund or a Third PartyFund (to a maximum of the commission earned by the Representativeon the purchase), and (b) will not be conditional on a purchaseof securities of the Elliott & Page Funds;

(iii) Representatives arenot and shall not in the future be subject to quotas (eitherexpress or implied) in respect of the distribution of theElliott & Page Funds and shall continue to be entitledto offer competing Third Party Funds to their clients;

(iv) Except as permitted byNI 81-105, neither Manulife nor any of its affiliates shallprovide an incentive (monetary or non-monetary) to any Representativeto recommend the Elliott & Page Funds over Third PartyFunds;

(v) The amount of the ProprietaryRebate that is borne by a Representative is determined bythe Representative and the client; and

(vi) The Representatives thatpay the Proprietary Rebates are not and will not be reimburseddirectly or indirectly for such payment by Manulife or anyof its affiliates.

AND PROVIDED FURTHERthat this Decision Document shall cease to be operative withrespect to a Decision Maker following the entry into force ofa rule of that Decision Maker that replaces or amends section7.1 of NI 81-105.

June 3, 2002.

"Robert W. Korthals"                    "PaulM. Moore"