Securities Law & Instruments

Headnote

MRRS - Closed-end investmenttrust exempt from prospectus and registration requirements inconnection with issuance of units to existing unitholders pursuantto a distribution reinvestment plan whereby distributions ofincome are reinvested in additional units of the trust, subjectto certain conditions - First trade relief provided, subjectto certain conditions.

Applicable Ontario StatutoryProvisions

Securities Act, R.S.O. 1990,c. S.5, as am., ss. 25(1),53(1) and 74(1).

Applicable Ontario Rules

Rule 45-502 - Dividend orInterest Reinvestment and Stock Dividend Plans.

Applicable Instrument

Multilateral Instrument 45-501- Resale of Securities - s. 2.6(4).
 
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, ONTARIO, BRITISHCOLUMBIA, MANITOBA,
NEW BRUNSWICK, NEWFOUNDLAND& LABRADOR, NOVA SCOTIA,
PRINCE EDWARD ISLAND, QUEBECAND SASKATCHEWAN

AND

IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
MYDAS FUND

MRRS DECISION DOCUMENT

1. WHEREAS the local securitiesregulatory authority or regulator (the "Decision Maker")in each of Alberta, Ontario, British Columbia, Manitoba, NewBrunswick, Newfoundland, Nova Scotia, Prince Edward Island,Quebec and Saskatchewan (the "Jurisdictions") hasreceived an application from MYDAS Fund (the "Fund"),for a decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirement containedin the Legislation to be registered to trade in a securityand to file and obtain a receipt for a preliminary prospectusand a final prospectus (the "Registration and ProspectusRequirements") shall not apply to the distribution oftrust units of the Fund under a distribution reinvestmentplan (the "DRIP");

2. AND WHEREAS under the MutualReliance Review System for Exemptive Relief Applications (the"System") the Alberta Securities Commission is theprincipal regulator for this application;

3. AND WHEREAS the Fund hasrepresented to the Decision Makers that:

3.1 the Fund is a closed-endinvestment trust established under the laws of Alberta undera declaration of trust dated December 18, 2001 (the "Declarationof Trust");

3.2 Computershare TrustCompany of Canada is the trustee of the Fund (in such capacity,the "Trustee");

3.3 under the Declarationof Trust, the Fund is authorized to issue an unlimited numberof transferable, non-redeemable trust units (the "TrustUnits"), of which there were 9,905,631 Trust Unitsoutstanding on March 25, 2002;

3.4 the Fund is not a mutualfund as described in the Legislation because the holdersof Trust Units (the "Unitholders") are not entitledto receive on demand an amount computed by reference tothe value of a proportionate interest in the whole or inpart of the net assets of the Fund as contemplated in thedefinition of mutual fund in the Legislation;

3.5 the assets of the Fundconsist of a portfolio of securities including Canadianincome funds and Canadian high yielding investment gradedebt, as well as cash (the "Assets");

3.6 the Fund was createdto:

3.6.1 provide Unitholderswith a stable, tax effective income stream derived fromthe distribution of income to the Fund from the portfolioof securities that it holds ("Distributable Income");and

3.6.2 return at leastthe original issue price of the Trust Units to Unitholdersupon termination of the Fund;

3.7 each Trust Unit representsan equal fractional undivided beneficial interest in thenet assets of the Fund, and entitles its holder to one voteat meetings of Unitholders and to participate equally withrespect to any and all distributions made by the Fund, includingdistributions of net income and net realized capital gains,if any;

3.8 the Fund became a reportingissuer in each province of Canada on January 28, 2002 whenit obtained a Final Decision Document for its prospectusdated January 28, 2002 (the "Prospectus");

3.9 the Fund is not a qualifyingissuer as defined in Multilateral Instrument 45-102 Resaleof Securities;

3.10 MYDAS Management Inc.(the "Administrator") is the authorized attorneyof the Fund;

3.11 the Trust Units arelisted on The Toronto Stock Exchange;

3.12 the Trust Units areonly available in book-entry form whereby CDS & Co.,a nominee of The Canadian Depository for Securities Limited,is the only registered holder of Trust Units;

3.13 the Fund has establishedthe DRIP to permit Unitholders, at their discretion, toautomatically reinvest the Distributable Income paid ontheir Trust Units in additional Trust Units ("DRIPUnits") as an alternative to receiving cash distributions;

3.14 distributions due toparticipants in the DRIP ("DRIP Participants")will be paid to Computershare Trust Company of Canada inits capacity as agent under the DRIP (in such capacity,the "DRIP Agent") and applied to the purchaseof DRIP Units;

3.15 no commissions, servicecharges, or brokerage fees will be payable by DRIP Participantsin connection with the DRIP;

3.16 the DRIP Agent willpurchase DRIP Units from the Fund at the net asset valueper Trust Unit as at the applicable distribution date;

3.17 DRIP Participants mayterminate their participation in the DRIP by providing 10days' written notice to the DRIP Agent prior to the applicablerecord date;

3.18 DRIP Participants donot have the option of making cash payments to purchaseadditional DRIP Units under the DRIP;

4. AND WHEREAS under the System,this MRRS Decision Document evidences the decision of eachDecision Maker (collectively, the "Decision");

5. AND WHEREAS each of theDecision Makers is satisfied that the test contained in theLegislation that provides the Decision Maker with the jurisdictionto make the Decision has been met;

6. THE DECISION of the DecisionMakers under the Legislation is that the Registration andProspectus Requirements will not apply to trades and distributionsby the Fund of DRIP Units, provided that:

6.1 at the time of the tradeor distribution the Fund is a reporting issuer or the equivalentunder the Legislation and is not in default of any requirementsof the Legislation;

6.2 no sales charge is payablein respect of the trade or distributions;

6.3 the Fund has causedto be sent to the person or company to whom the DRIP Unitsare traded, not more than 12 months before the trade, astatement describing:

6.3.1 their right to withdrawfrom the DRIP and to make an election to receive cashinstead of DRIP Units on the making of a distributionof income by the Fund; and

6.3.2 instructions onhow to exercise the right referred to in 6.3.1;

6.4 disclosure of the distributionof the DRIP Units is made to the relevant Jurisdictionsby providing the particulars of the date of the distributionof such DRIP Units, the number of such DRIP Units and thepurchase price paid or to be paid for such DRIP Units in:

6.4.1 an information circularor take-over bid circular filed in accordance with theLegislation; or

6.4.2 a letter filed withthe Decision Maker in the appropriate Jurisdiction bya person or company certifying that the person or companyhas knowledge of the facts contained in the letter;

when the Fund distributessuch DRIP Units for the first time and thereafter, not lessfrequently than annually, unless the aggregate number ofDRIP Units so traded in any month exceeds 1% of the TrustUnits outstanding at the beginning of the month in whichthe DRIP Units were traded, in which case a separate reportwill be filed in each relevant Jurisdiction in respect ofthat month within 10 days of the end of such month;

6.5 except in Quebec, thefirst trade in DRIP Units acquired under this Decision ina Jurisdiction will be deemed a distribution or primarydistribution to the public under the Legislation unlessthe conditions in paragraphs 2 through 5 of subsection 2.6(4)of MI 45-102 are satisfied;

6.6 in Quebec, the firsttrade (alienation) of DRIP Units acquired under this Decisionin a Jurisdiction will be deemed a distribution or a primarydistribution to the public unless:

6.6.1 at the time of thefirst trade the Fund is a reporting issuer in Quebec andis not in default of any of the requirements of securitieslegislation in Quebec;

6.6.2 no unusual effortis made to prepare the market or to create a demand forthe DRIP Units;

6.6.3 no extraordinarycommission or consideration is paid to a person or companyother than the vendor of the DRIP Units in respect ofthe trade;

6.6.4 the vendor of theDRIP Units, if in a special relationship with the Fund,has no reasonable grounds to believe that the Fund isin default of any requirement of the securities legislationin Quebec.

May 31, 2002.

"Glenda A. Campbell"                 "WalterB. O'Donoghue"