Securities Law & Instruments

Headnote

Relief granted from certain provisions of securitieslegislation for initial and continuous distribution of unitsof exchange-traded fund - relief from registration requirementgranted to permit the fund and its promoter to disseminate salescommunication promoting the fund, subject to compliance withPart 15 of NI 81-102 - relief granted for the fund's prospectusnot to contain an underwriter's certificate - relief from theregistration requirement granted to permit members of futuresexchanges and their partners, directors or officers to tradein units of the fund, subject to specified conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as amended- ss. 25(1), 59(1), 74(1) & 147.

Rules Cited

National Instrument 81-102 Mutual Funds - Part15.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC,NOVA SCOTIA,

PRINCE EDWARD ISLAND, NEWBRUNSWICK, NEWFOUNDLAND AND LABRADOR,

THE YUKON, THE NORTHWEST TERRITORIESAND NUNAVUT

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF THE

iUNITS S&P/TSX CANADIANREIT INDEX FUND

AND

IN THE MATTER OF

BARCLAYS GLOBAL INVESTORSCANADA LIMITED

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Quebec, Nova Scotia, Prince Edward Island, New Brunswick, Newfoundlandand Labrador, Yukon, Northwest Territories and Nunavut (the"Jurisdictions") has received an application fromthe iUnits S&P/TSX Canadian REIT Index Fund (the "Fund")and Barclays Global Investors Canada Limited ("Barclays"),the trustee of the Fund, (collectively, the "Filer"),for a decision under the securities legislation of the Jurisdictions(the "Legislation") that the requirements containedin the Legislation:

(a) to be registered as a dealer in connectionwith the dissemination of sales communications, as definedin National Instrument 81-102 ("NI 81-102"), relatedto units of beneficial interest issued by the Fund ("Units");

(b) to have members of futures exchangesand their partners, officers and employees be registeredto trade Units of the Fund;

(c) to include an underwriters' certificatein the Fund's prospectus and any renewal thereof,

shall not apply to the Fund and Barclays;

and for a decision under the securities legislationof New Brunswick, Prince Edward Island and Yukon that:

(d) the registration requirement under section5 of The Securities Frauds Prevention Act, R.S.N.B.1973, c. S-6, as amended (the "NB Act") and thecorresponding provisions in legislation of Prince EdwardIsland and Yukon; and

(e) the requirement to deliver a prospectusunder section 13 of the NB Act and the corresponding provisionsin legislation of Prince Edward Island and Yukon,

shall not apply to the Fund and Barclays inconnection with trades in Units for the purpose of distributingincome or capital gains;

AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS the Filer has representedto the Decision Makers that:

1. The Fund is a trust established under thelaws of Ontario and its investment objective is to track theperformance of the S&P/TSX Canadian REIT Index (the "Index").

2. Barclays is the trustee of the Fund. Barclays'head office is located in Toronto, Ontario. Barclays is registeredin all provinces and territories, other than the Yukon, asa portfolio manager and investment counsel (or the equivalentcategories of registration) under the securities legislationof such Jurisdictions.

3. The Fund will be a reporting issuer underthe securities legislation of each Jurisdiction, where suchterm is applicable.

4. The Fund seeks to provide income and long-termgrowth to unitholders of the Fund ("Unitholders")by investing in shares of the companies that are includedin the Index (collectively, the "Constituent Companies")in the same proportion as they are reflected in the Index.The Fund may also invest in futures contracts and other similarinstruments in order to track the Index.

5. The Fund will issue Units which will conferon investors in one security a proportionate share of economicbenefits similar to those that an investor could obtain throughindividual investments in the securities comprising the Index(collectively, the "Index Shares").

6. It is intended that the market price ofthe shares of the Constituent Companies underlying the Units(the "Core Asset Share Value per Unit") will equal,as closely as possible, 1/10th of the level ofthe Index. From time to time, however, there may be a deviationin tracking such that the Core Asset Share Value per Unitwill be greater or less than 1/10th of the Indexlevel. Any substantial deviation of the market price for Unitsis expected to be corrected by arbitrage.

7. Units may be purchased directly from theFund only by one or more registered brokers or dealers whohave entered into an underwriting agreement with the Fund(the "Underwriters"). The majority of the considerationpayable by Underwriters for Units will consist of shares ofConstituent Companies, in prescribed amounts, and cash. Certainissuances to one or more designated brokers of the Fund (each,a "Designated Broker") will be made entirely incash.

8. Underwriters and Designated Brokers willnot receive any fees or commissions in connection with theFund's issuance of Units to them. On the issuance of Units,Barclays may require the Underwriter who placed the orderto pay a transaction fee equal to 0.04% of the value of theaggregate proceeds received by the Fund in connection withsuch issuance. Barclays may, at its discretion, charge anadministrative fee on the issuance of Units to the Underwritersto offset the expenses incurred in issuing Units.

9. Units may also be issued periodically bythe Fund to one or more Designated Brokers upon an Index adjustment,take-over bid or similar extraordinary situation, or to fundpermitted cash redemptions. Units will also be issued to Unitholdersupon the automatic reinvestment of special dividends or capitalgains distributions made on the Index Shares held by the Fund.

10. The net asset value of the Fund will becalculated daily and displayed at www.iunits.com.

11. The Units of the Fund will be listed andposted for trading on the Toronto Stock Exchange (the "Exchange").The Fund will be subject to the rules of the Exchange withrespect to the declaration of distributions, including withrespect to the determination of the record date for distributions.

12. Except as described in paragraphs 7 and9, Units may not be purchased directly from the Fund. Investorsare generally expected to purchase Units through the facilitiesof the Exchange. However, Units will be issued directly toUnitholders upon the reinvestment of the Fund's distributionsof income or capital gains.

13. Unitholders who wish to dispose of theirUnits may generally do so by selling such Units on the Exchange.Holders of a prescribed number of Units, or an integral multiplethereof, however, may redeem Units for baskets of the IndexShares plus cash. Unitholders who redeem a prescribed numberof Units, or integral multiple thereof, may be charged anadministrative fee in order to offset the expenses incurredby the Funds in effecting such exchange.

14. All Unitholders will also have the rightto redeem Units solely for cash at a redemption price perUnit equal to 95% of the closing trading price of Units onthe Exchange on the effective day of the redemption.

15. Unitholders holding at least the prescribednumber of Units will be entitled to vote a proportion of theshares of a Constituent Company held by the Fund equal tothat Unitholder's proportion of outstanding Units. Unitholdersholding less than a prescribed number of Units will have noright to vote shares of a Constituent Company held by theFund.

16. As trustee, Barclays will be entitledto receive from the Fund a fixed annual fee (the "TrusteeFee") equal to 0.55% of the net asset value of the Fund.Barclays will be responsible for all costs and expenses ofthe Fund, except for the Trustee Fee.

17. The Fund proposes to lend the Index Shareswhich it holds itself or through an agent to brokers, dealersand other financial institutions desiring to borrow securities.The securities lending will enable the Fund to earn incometo partially offset the costs and expenses of the Fund. Thiswill enable the Fund to reduce the effect of such costs andexpenses, thereby enhancing the Fund's ability to provideinvestment results which most closely correspond to the priceand performance of the applicable Index.

18. Members of a futures exchange (or theirpartners, directors and officers), who are registered onlyunder the commodity futures legislation or requirements (ifany) of the Jurisdiction where such members carry on the businessof dealing in futures contracts, may have to trade units ofthe Funds in order to hedge their futures and other derivativesholdings based on the Index. Their registration under theapplicable commodity futures legislation does not permit themto trade in Units of the Funds.

AND WHEREAS under the System, this MRRSDecision Document evidences the decisions of each Decision Maker(collectively, the "Decision");

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers underthe Legislation is that :

(a) the registration requirement of theLegislation does not apply to Barclays and the Fund, inconnection with any dissemination of sales communicationsrelating to the distribution of Units of the Fund, providedthat they comply with Part 15 of National Instrument 81-102Mutual Funds;

(b) the registration requirement of theLegislation does not apply to trades in Units of the Fundby members of a futures exchange, or the members' partners,directors or officers trading on behalf of such members,provided that

(i) the members or their partners, directorsor officers are registered for trading purposes underthe commodity futures legislation or requirements (ifany) of the Jurisdiction where such members carry on thebusiness of dealing in futures contracts,

(ii) the trades in Units of the Fund aremade only for such members' own account, and

(iii) neither the members nor their partners,directors or officers will trade in Units of the Fundon behalf of their clients.

(c) In connection with the proposed distributionof Units of the Fund pursuant to the Prospectus or any renewalprospectus, the Fund is exempt from the requirement of theLegislation that the Prospectus or renewal prospectus containa certificate of the Underwriters as defined in paragraph7 above.

AND THE DECISION of the securities regulatoryauthority or regulator in each of New Brunswick, Prince EdwardIsland and Yukon pursuant to section 13(12) of the NB Act andcorresponding provisions in legislation of Prince Edward Islandand Yukon is that:

(a) the registration requirement under section5 of the NB Act and the corresponding provisions in legislationof Prince Edward Island and Yukon; and

(b) the requirement to deliver a prospectusunder section 13 of the NB Act and the corresponding provisionsin legislation of Prince Edward Island and Yukon,

shall not apply to the Fund and Barclays inconnection with trades in Units for the purpose of distributingincome or capital gains.

August 20, 2002.

"Paul Moore"                    "HaroldP. Hands"