Section 147 of the Act - issueris exempt from the payment of the fee otherwise payable undersection 7.3 of Rule 45-501 in connection with a dual structuretransaction where prospectus fees have already been paid.
Securities Act, R.S.O. 1990,c. S.5, as am., s. 147.
Regulation made under the SecuritiesAct, R.R.O. 1990, Reg. 1015, as am., subsection 18(2) of ScheduleI.
Ontario Securities CommissionRule 45-501 - Exempt Distributions, s. 7.3.
IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990, CHAPTER S. 5,AS AMENDED (the "Act")
IN THE MATTER OF
SKYLON ADVISORS INC. AND
SKYLON GLOBAL HIGH YIELD TRUST
UPON the application(the "Application") of Skylon Advisors Inc. (the "Manager")to the Ontario Securities Commission (the "commission")for an order pursuant to section 147 of the Act exempting theSkylon Global High Yield Trust (the "Global High YieldTrust") from the payment of fees otherwise payable undersection 7.3 of Commission Rule 45-501 - Exempt Distributions("Rule 45-501") in connection with the distributionof units of the Global High Yield Trust;
AND UPON consideringthe Application and the recommendation of the staff of the Commission;
AND UPON the Managerhaving represented to the Commission as follows:
1. The Manager is a corporationincorporated under the laws of Ontario on September 19, 2001.The registered office of the Manager is located in Toronto,Ontario;
2. The Manager acts as themanager and trustee of the Skylon Global Capital Yield Trust(the "Global Capital Yield Trust") and the GlobalHigh Yield Trust;
3. The Global Capital YieldTrust is an investment trust established under the laws ofthe Province of Ontario pursuant to a trust agreement madeas of June 26, 2002;
4. The Global Capital YieldTrust is authorized to issue an unlimited number of redeemable,transferable units (the "Global Capital Yield Units"),each of which represents an equal undivided beneficial interestin the net assets of the Global Capital Yield Trust;
5. On June 26, 2002, the GlobalCapital Yield Trust filed a final prospectus (the "GlobalCapital Yield Prospectus") relating to the offering ofGlobal Capital Yield Units with all of the provincial securitiesregulatory authorities. A final receipt for this prospectuswas issued on June 27, 2002;
6. The Global Capital YieldTrust is a reporting issuer in each of the provinces of Canadaand is not in default of any requirements of Canadian securitieslegislation;
7. The Global Capital YieldTrust will invest its assets in a portfolio of common sharesof Canadian public companies (the "Common Share Portfolio").The Global Capital Yield Trust will enter into forward purchaseand sale agreements (collectively, the "Forward Agreement")with TD Global Finance ("TDGF"), a member of theTD Bank Financial Group, and Royal Bank of Canada ("RBC")(TDGF and RBC collectively referred to as the "Counterparty")pursuant to which the Counterparty agrees to pay to the GlobalCapital Yield Trust on or about the termination date of theGlobal Capital Yield Trust as the purchase price for the CommonShare Portfolio an amount equal to 100% of the redemptionproceeds of a corresponding number of units of the GlobalHigh Yield Trust;
8. The Global High Yield Trustis an investment trust established under the laws of the Provinceof Ontario pursuant to a trust agreement made as of June 26,2002;
9. The Global High Yield Trustfiled a final non-offering prospectus, dated June 26, 2002,with the Commission des valeurs mobilières du Québec(the "CVMQ") to enable the Global High Yield Trustto become a reporting issuer under the Securities Act(Québec). A receipt for the Global High Yield Trustprospectus, dated June 27, 2002, was issued by the CVMQ;
10. The Global High YieldTrust is a reporting issuer in the Province of Québecand is not in default of any requirements of the QuébecAct or the Regulations to the Québec Act;
11. The Global High YieldTrust was established for the purpose of acquiring a portfolio(the "Global High Yield Portfolio") of high yielddebt securities. The Global High Yield Portfolio will be activelymanaged and will primarily consist of global high yield instruments,including corporate debt, emerging market debt and other highyield instruments. The return to holders of Global CapitalYield Units and the Global Capital Yield Trust will be dependentupon the return of the Global High Yield Trust and the GlobalHigh Yield Portfolio by virtue of the Forward Agreement;
12. To provide the GlobalHigh Yield Trust with the funds to purchase the Global HighYield Portfolio, units of the Global High Yield Trust willbe issued to the Counterparty or its affiliates. The issuanceof units to the Counterparty or its affiliates will be madein reliance on the prospectus and registration exemptionsunder section 2.3 of Rule 45-501;
13. Pursuant to subsection18(1) of Schedule 1 of Ontario Regulation 1015 made underthe Act, the Global Capital Yield Trust has paid fees in theamount of $55,200 to the Commission in connection with thefiling of the Global Capital Yield Prospectus qualifying thedistribution of the Global Capital Yield Units;
14. Section 7.3 of Rule 45-501requires the Global High Yield Trust to make payments to theCommission in respect of the distribution of units of theGlobal High Yield Trust to the Counterparty or its affiliates;
15. The return to holdersof Global Capital Yield Units is dependent on the return ofthe Global High Yield Trust by virtue of the Forward Agreement,and as such, payment of additional fees by the Global HighYield Trust pursuant to Rule 45-501 will reduce the returnof the Global High Yield Trust and therefore the amount payableby the Counterparty to the Global Capital Yield Trust underthe Forward Agreement;
AND UPON the Commissionbeing satisfied that to do so would not be prejudicial to thepublic interest;
IT IS HEREBY ORDERED,pursuant to section 147 of the Act, that the Global High YieldTrust is exempt from the requirement to pay the fees requiredunder section 7.3 of Rule 45-501 in connection with the distributionof units of the Global High Yield Trust to the Counterpartyor their affiliates.
July 23, 2002.
"H. I. Wetston" "H.Lorne Morphy"