Securities Law & Instruments


Pursuant to subsection 74(1)of the Act, a ruling, subject to terms and conditions, thatthe dealer registration requirements in section 25 of the Actdo not apply to the Registrant and its representatives in connectionwith (a) trades by the Registrant of units of mutual funds managedand promoted by the Registrant to clients for whom the Registranthas fully managed accounts governed by the terms of an investmentmanagement agreement, and (b) wholesaling and marketing activitiescarried on by the Registrant in respect of the mutual funds,to the extent that such activities constitute acts in furtheranceof a trade.

Statues Cited

Securities Act, R.S.O. 1990,c. S.5, as amended s. 25, 74(1).

Rules Cited

National Instrument 81-102 MutualFunds.

Ontario Securities CommissionRule 31-506 - SRO Membership - Mutual Fund Dealers.

Ontario Securities CommissionRule 45-501 Exempt Distributions.









(Subsection 74(1))

UPON the application(the Application) of McLean Budden Limited (the Registrant)to the Ontario Securities Commission (the Commission)for a ruling pursuant to subsection 74(1) of the Act that therequirements of section 25 of the Act to be registered as adealer shall not apply to the Registrant or to the officersand employees of the Registrant acting on its behalf in respectof certain activities relating to mutual funds of which theRegistrant is the manager (the Mutual Funds);

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

AND UPON the Registranthaving represented to the Commission that:

1. The Registrant is a corporationgoverned by the Canada Business Corporations Act.

2. The Registrant is registeredunder the Act as an adviser in the category of investmentcounsel and portfolio manager and as a dealer in the categoryof mutual fund dealer and has applied for registration asa dealer in the category of limited market dealer.

3. The requested relief isrequired in Ontario only and no similar application has beenfiled in any other jurisdiction.

4. The Registrant carrieson business primarily as an investment counsel and portfoliomanager. As part of its portfolio management operations, theRegistrant provides discretionary portfolio management servicesto investment portfolio accounts (each a Managed Account)of clients, under which the Registrant, pursuant to a writtenagreement made between the Registrant and each client, makesinvestment decisions for the account and has full discretionaryauthority to trade in securities for the account without obtainingthe specific consent of the client to the trade.

5. The Registrant is the managerof eight mutual funds and may in the future be the managerof additional mutual funds which are subject to National Instrument81-102 - Mutual Funds (NI 81-102) and are offeredfor sale pursuant to a simplified prospectus and annual informationform and pursuant to exemptions from the requirement to filea prospectus and the Registrant is the manager of 23 mutualfunds and may in the future be the manager of additional mutualfunds which are offered for sale pursuant to exemptions fromthe requirement to file a prospectus.

6. Incidental to its principalbusiness of portfolio management, the Registrant wishes todistribute shares or units of the Mutual Funds to ManagedAccounts. Except as provided for in paragraph 8 of this Order,the Registrant will not distribute shares or units of theMutual Funds to persons for whom it does not have ManagedAccounts.

7. The Registrant has a wholly-ownedsubsidiary, McLean Budden Funds Inc. (MBF) which hasbeen registered as a mutual fund dealer and has applied formembership in the Mutual Fund Dealers Association of Canada(the MFDA). MBF has been established for the purposeof acquiring and continuing to conduct retail mutual funddistribution activities formerly undertaken by the Registrant.

8. The Registrant also wishesto conduct marketing and wholesaling activities in respectof the Mutual Funds. "Marketing or Wholesaling Activities"means, for the Registrant, a trade by the Registrant thatconsists of any act, advertisement, or solicitation, directlyor indirectly, in furtherance of another trade in securitiesof a mutual fund, where the other trade consists of:

(i) a purchase or sale ofsecurities of a mutual fund that is managed by the Registrantor an affiliate of the Registrant; or

(ii) a purchase or saleof securities of a mutual fund in respect of which the Registrantacts as the "principal distributor" of the mutualfund for the purposes of NI 81-102;

and where, the purchase orsale is, in each case, made by or through an other dealerthat is registered under the Act where the trade is made ina category that permits it to act as a dealer for such trade.

9. Without the relief requestedthe Registrant would require continued registration as a mutualfund dealer in order to (a) distribute shares or units ofprospectus-qualified Mutual Funds to investors for whom theRegistrant has Managed Accounts who are not "accreditedinvestors" pursuant to Rule 45-501 - Exempt Distributions,and (b) conduct Marketing and Wholesaling Activities in respectof the Mutual Funds.

10.Without the relief requested,the Registrant would be subject to Rule 31-506 SRO Membership- Mutual Fund Dealers which requires mutual fund dealersto apply for and maintain membership in the MFDA.

11.The effect of the MFDA'smembership rules is to preclude a mutual fund dealer suchas the Registrant from conducting its principal business ofacting as an adviser and accepting discretionary portfoliomanagement mandates.

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

IT IS RULED pursuantto subsection 74(1) of the Act that the requirements in section25 of the Act shall not apply to trades in shares or units ofMutual Funds made by the Registrant, through its officers andemployees acting on its behalf (each, a Registrant Representative),to Managed Accounts,


(A) the Registrant is, atthe time of the trade, registered under the Act as an adviserin the categories of "investment counsel" and"portfolio manager" and as a dealer in the categoryof "limited market dealer";

(B) the trade is made onbehalf of the Registrant by a Registrant Representativewho is, at the time of the trade, either (i) registeredunder the Act to act on behalf of the Registrant as an adviserin the categories of investment counsel and portfolio manager,or (ii) acting under the direction of such a person andis himself or herself registered under the Act to tradeon behalf of the Registrant pursuant to its limited marketdealer registration; and

(C) this Order shall terminateone year after the coming into force, subsequent to thedate of this Order, of a rule or other regulation underthe Act that relates, in whole or part, to any trading bypersons or companies that are registered under the Act asportfolio managers (or the equivalent), in securities ofa mutual fund, to an account of a client, in respect ofwhich the person or company has full discretionary authorityto trade in securities for the account, without obtainingthe specific consent of the client to the trade, but doesnot include any rule or regulation that is specificallyidentified by the Commission as not applicable for thesepurposes.

AND, IT IS RULED pursuantto subsection 74(1) of the Act that the requirement in section25 of the Act shall not apply to trades that consist of Marketingor Wholesaling Activities in respect of shares or units of MutualFunds made by the Registrant through Registrant Representatives,

PROVIDED THAT, in thecase of each such trade, the Registrant is, at the time of thetrade, registered under the Act as a dealer in the categoryof limited market dealer and the Registrant Representative thatmakes the trade on behalf of the Registrant is, at the timeof the trade, registered under the Act to trade on behalf ofthe Registrant pursuant to its limited market dealer registration.

June 21, 2002.

"Robert W. Korthals"                    "HaroldP. Hands"