Securities Law & Instruments


Mutual Reliance Review Systemfor Exemptive Relief Applications - Relief granted to a splitshare company from requirement to deliver annual financial statementsand requirement to file an annual report where applicable. Theannual financial statements covered a short operating period.

Applicable Ontario StatutoryProvisions

Securities Act, R.S.O. 1990,c. S.5, as am. s. 80(b)(iii).















WHEREAS the local securitiesregulatory authority or regulator (the "Decision Maker")in each of Ontario, Alberta, Saskatchewan, Manitoba, Quebec,Nova Scotia, and Newfoundland and Labrador (the "Jurisdictions")has received an application from SNP Health Split Corp. (the"Issuer") for a decision under the securities legislation(the "Legislation") of the Jurisdictions that theIssuer be exempted from delivering to security holders annualfinancial statements for the year ended February 11, 2002, andbe exempted from the preparation, filing and delivery of anannual report, where applicable, for the year ended February11, 2002, as would otherwise be required pursuant to applicableLegislation;

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

AND WHEREAS the Issuerhas represented to the Decision Maker that:

1. The Issuer filed a finalprospectus dated January 28, 2002 (the "Prospectus")with the securities regulatory authority in each of the Provincesof Canada pursuant to which a distribution of 6,600,000 classA capital shares (the "Capital Shares") and 3,300,000class A preferred shares (the "Preferred Shares")of the Issuer was completed on February 5, 2002.

2. The Issuer was incorporatedunder the laws of the Province of Ontario on November 29,2001. The fiscal year end of the Issuer is February 11, withthe first fiscal year end occurring on February 11, 2002.The final redemption of the publicly held shares of the Issueris scheduled to occur on February 11, 2009.

3. The authorized capitalof the Issuer consists of an unlimited number of Capital Shares,of which 6,600,000 are issued and outstanding, an unlimitednumber of Preferred Shares, of which 3,300,000 are issuedand outstanding, an unlimited number of class B, class C,class D and class E capital shares, issuable in series, noneof which are issued and outstanding, an unlimited number ofclass B, class C, class D and class E preferred shares, issuablein series, none of which are issued and outstanding, and anunlimited number of class J shares (the "Class J Shares"),of which 100 are issued and outstanding. The attributes ofthe Capital Shares and the Preferred Shares are describedin the Prospectus under "Description of Share Capital".

4. The Class J Shares arethe only class of voting securities of the Issuer. ScotiaCapital Inc. ("Scotia Capital") owns 50 of the issuedand outstanding Class J Shares and SNP Health Split HoldingsCorp. owns the remaining issued and outstanding Class J Shares.Two directors of Scotia Capital each own 50% of the commonshares of SNP Health Split Holdings Corp. Scotia Capital actedas an agent for, and was the promoter of, the Issuer in respectof the offerings of the Capital Shares and the Preferred Shares.

5. The principal undertakingof Issuer is the holding of a portfolio of common shares (the"Portfolio Shares") of the companies that make upthe S&P Health Care Sector Index of the S&P500 Index in order to generate distributions for the holdersof Preferred Shares and to provide the holders of CapitalShares with a leveraged investment, the value of which islinked to changes in the market price of the Portfolio Shares.The operations of the Issuer commenced on or about February5, 2002 at which time it began to acquire the Portfolio Sharesnow held by it. The Portfolio Shares held by the Issuer willonly be disposed of as described in the Prospectus.

6. The Prospectus includedan audited balance sheet of the Issuer as at January 28, 2002and an unaudited pro forma balance sheet prepared on the basisof the completion of the sale and issue of Capital Sharesand Preferred Shares of the Issuer. As such, the financialposition of the Issuer as at February 11, 2002 will have beensubstantially reflected in the pro forma financial statementscontained in the Prospectus.

7. The Issuer is an inactivecompany, the sole purpose of which is to provide a vehiclethrough which different investment objectives with respectto participation in the Portfolio Shares may be satisfied.Holders of Capital Shares will be entitled on redemption tothe benefits of any capital appreciation in the market priceof the Portfolio Shares after payment of operating expensesof the Issuer and the fixed distributions on the PreferredShares, and holders of Preferred Shares will be entitled toreceive fixed cumulative preferential distributions on a quarterlybasis equal to US$0.375 per Preferred Share.

8. The benefit to be derivedby the security holders of the Issuer from receiving the annualfinancial statements and the annual report, where applicable,would be minimal given (i) the extremely short period, i.e.six days, between the closing of the offerings on February5, 2002 and the year end; (ii) the pro forma financial statementscontained in the Prospectus; and (iii) the nature of the minimalbusiness carried on by the Issuer.

9. The expense to the Issuerof printing and delivering to its security holders financialstatements for the fiscal year ended February 11, 2002 wouldnot be justified in view of the availability of such statementsthrough the SEDAR website and the Issuer's website.

10. The expense to the Issuerof preparing, filing and delivering the annual report, whereapplicable, would not be justified in view of the minimalbenefits to be derived by security holders from receivingsuch report.

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

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;

IT IS HEREBY DECIDEDby the Decision Makers pursuant to the Legislation that theIssuer is exempted from delivering to its security holders annualfinancial statements for its fiscal year ended February 11,2002 and is exempt from, where applicable, the preparation,filing and delivering to its security holders of the annualreport for the year ended February 11, 2002, provided that

(i) the annual financialstatements for its fiscal year ended February 11, 2002 arefiled and posted for viewing on the SEDAR website and onthe Issuer's website at;and

(ii) the Issuer sends acopy of such annual financial statements to any shareholderof the Issuer who so requests.

July 23, 2002.

"Kerry D. Adams"                    "HaroldP. Hands"