Securities Law & Instruments

Headnote

Exemption from the fees otherwisedue under subsection 14(1) of Schedule I of the Regulation madeunder the Securities Act on the distribution of units made byunderlying funds arising in the context of fund-on-fund structures.

Regulations Cited

Regulation made under the SecuritiesAct, R.R.O. 1990, 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

AND

IN THE MATTER OF

THE REGULATION UNDER THE SECURITIESACT,

R.R.0. 1990, REGULATION 1015,AS AMENDED

(the "Regulation")

AND

IN THE MATTER OF

RBC FUNDS INC.

ORDER

(Subsection 59(1) of ScheduleI of the Regulation)

UPON the applicationof RBC Funds Inc. ("RBC FI") the manager of RoyalSelect Income Portfolio, Royal Select Balanced Portfolio, RoyalSelect Growth Portfolio, Royal Select Choices Income Portfolio,Royal Select Choices Balanced Portfolio, Royal Select ChoicesGrowth Portfolio, Royal Select Choices Aggressive Growth Portfolioand other similar mutual funds managed by RBC FI from time totime (collectively, the "Top Funds", individually,a "Top Fund") to the Ontario Securities Commission(the "Commission") for an order pursuant to subsection59(1) of Schedule I of the Regulation exempting Royal MortgageFund, Royal Bond Fund, Royal Monthly Income Fund, Royal GlobalBond Fund, Royal Dividend Fund, Royal Canadian Equity Fund,Royal Canadian Growth Fund, Royal U.S. Equity Fund, Royal U.S.RSP Index Fund, O'Shaughnessy U.S. Value Fund, Royal U.S. Mid-CapEquity Fund, Royal Life Science and Technology Fund, Royal InternationalEquity Fund, Royal International RSP Index Fund, Royal EuropeanGrowth Fund, Royal Asian Growth Fund and such other mutual fundsmanaged by RBC FI from time to time (collectively, the "UnderlyingFunds, individually, an "Underlying Fund") from payingduplicate filing fees on an annual basis in respect of the distributionof units of the Underlying Funds to the Top Funds and on thereinvestment of distributions of such units.

AND UPON consideringthe application and the recommendation of staff of the Commission;

AND UPON RBC FI havingrepresented to the Commission that:

1. RBC FI is, or will be,the manager of the Top Funds and the Underlying Funds.

2. Each of the Top Funds andthe Underlying Funds is or will be an open-end mutual fundtrust established under the laws of the province of Ontario.Units of each of the Top Funds and Underlying Funds are orwill be qualified for distribution in each of the provincesand territories of Canada under simplified prospectuses andannual information forms filed with and accepted by thosejurisdictions.

3. Each of the Top Funds andthe Underlying Funds is or will be a reporting issuer in eachof the provinces and territories of Canada and is not or willnot be in default of any requirements of the securities legislationor regulations applicable in those jurisdictions at the timeit relies on the relief granted under this Order.

4. As part of its investmentstrategy, each Top Fund invests or will invest its assetsdirectly in units of Underlying Funds (the "Fund-on-FundInvestments").

5. Applicable securities regulatoryapprovals for the Fund-on-Fund Investments and the Top Funds'investment strategies have or will have been obtained.

6. Annually, each of the TopFunds is or will be required to pay filing fees to the Commissionin respect of the distribution of its units in Ontario pursuantto section 14 of Schedule I of the Regulation and will similarlybe required to pay fees in respect of the distribution ofits units in other relevant Canadian jurisdictions pursuantto applicable securities legislation in each of those jurisdictions.

7. Annually, each of the UnderlyingFunds is or will be required to pay filing fees in respectof the distribution of its units in Ontario, including thedistribution of units to the Top Funds, pursuant to section14 of Schedule I of the Regulation and will similarly be requiredto pay fees in respect of the distribution of its units inother relevant Canadian jurisdictions pursuant to the applicablesecurities legislation in each of those jurisdictions.

8. A duplication of filingfees pursuant to section 14 of Schedule I of the Regulationmay result when (a) assets of a Top Fund are invested in unitsof the applicable Underlying Fund, and (b) a distributionis paid by an Underlying Fund on units of the Underlying Fundpurchased by the applicable Top Fund which are reinvestedin additional units of the Underlying Fund (the "ReinvestedSecurities") on behalf of a Top Fund.

AND UPON the Commissionbeing satisfied that to do so would not be prejudicial to thepublic interest;

IT IS ORDERED by theCommission pursuant to subsection 59(1) of Schedule I of theRegulation that the Underlying Funds are exempt from the paymentof duplicate filing fees on an annual basis pursuant to section14 of Schedule I of the Regulation in respect of the distributionof units of the Underlying Funds to the Top Funds and distributionof the Reinvested Securities, provided that each UnderlyingFund shall include in its notice filed under subsection 14(4)of Schedule I of the Regulation a statement of the aggregategross proceeds realized in Ontario as a result of the issuanceby the Underlying Funds of units to the Top Funds and ReinvestedSecurities, together with a calculation of the fees that wouldhave been payable in the absence of this Order.

June 28, 2002.

"Robert W. Korthals"                    "HaroldP. Hands"