Securities Law & Instruments

Headnote

Section 147 of the Act - issuer is exempt fromthe payment of the fee otherwise payable under section 7.3 ofRule 45-501 in connection with a dual structure transactionwhere prospectus fees have already been paid.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,s.147.

Regulations Cited

Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., subsection 18(2) of Schedule I.

Rules Cited

Ontario Securities Commission Rule 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")

AND

IN THE MATTER OF

SKYLON ADVISORS INC. AND

SAXON ONGOING BUSINESS TRUST

 

ORDER

(Section 147)

UPON the application (the "Application")of Skylon Advisors Inc. (the "Manager") to the OntarioSecurities Commission (the "Commission") for an orderpursuant to section 147 of the Act exempting the Saxon OngoingBusiness Trust (the "Ongoing Business Trust") fromthe payment of fees otherwise payable under section 7.3 of CommissionRule 45-501 - Exempt Distributions ("Rule 45-501")in connection with the distribution of units of the OngoingBusiness Trust (the "Ongoing Business Trust Units");

AND UPON considering the Applicationand the recommendation of the staff of the Commission;

AND UPON the Manager having representedto the Commission as follows:

1. The Manager is a corporation incorporatedunder the laws of Ontario on September 19, 2001. The registeredoffice of the Manager is located in Toronto, Ontario;

2. The Manager acts as the manager and trusteeof the Saxon Diversified Value Trust (the "DiversifiedValue Trust") and the Ongoing Business Trust;

3. The Diversified Value Trust is an investmenttrust established under the laws of the Province of Ontariopursuant to a trust agreement made as of October 30, 2002,as amended by an amended and restated trust agreement madeas of November 15, 2002;

4. The Diversified Value Trust is authorizedto issue an unlimited number of redeemable, transferable units(the "Diversified Value Units"), each of which representsan equal undivided beneficial interest in the net assets ofthe Diversified Value Trust;

5. A final prospectus dated October 30, 2002(the "Diversified Value Prospectus") relating tothe offering of Diversified Value Units was filed with allof the provincial securities regulatory authorities. A finalreceipt for this prospectus was issued on October 30, 2002;

6. The Diversified Value Trust is a reportingissuer in each of the provinces of Canada and is not in defaultof any requirements of Canadian securities legislation;

7. The Diversified Value Trust will investa specified amount of its assets in a portfolio of commonshares of Canadian public companies (the "Common SharePortfolio"). The Diversified Value Trust will enter intoa forward purchase and sale agreement (the "Forward Agreement")with TD Global Finance ("TDGF"), a member of theTD Bank Financial Group (the "Counterparty") pursuantto which the Counterparty will agree to pay to the DiversifiedValue Trust on or about the termination date of the DiversifiedValue Trust as the purchase price for the Common Share Portfolioan amount equal to 100% of the redemption proceeds of a correspondingnumber of units of the Ongoing Business Trust;

8. The Ongoing Business Trust is an investmenttrust established under the laws of the Province of Ontariopursuant to a trust agreement made as of October 30, 2002,as amended by an amended and restated trust agreement madeas of November 15, 2002;

9. The Ongoing Business Trust filed a finalnon-offering prospectus, dated October 30, 2002, with theCommission des valeurs mobilières du Québec(the "CVMQ") to enable the Ongoing Business Trustto become a reporting issuer under the Securities Act(Québec) (the "Québec Act"). A receiptfor the Ongoing Business Trust prospectus, dated October 31,2002, was issued by the CVMQ;

10. The Ongoing Business Trust is a reportingissuer in the Province of Québec and is not in defaultof any requirements of the Québec Act or the Regulationsto the Québec Act;

11. The Ongoing Business Trust was establishedfor the purpose of acquiring a diversified portfolio consistingprimarily of securities of Canadian publicly traded incometrusts and, to a lesser extent, securities of other typesof Canadian publicly traded trusts such as oil and gas trusts,real estate investment trusts, and energy infrastructure funds(the "Ongoing Business Portfolio");

12. To provide the Ongoing Business Trustwith the funds to purchase the Ongoing Business Portfolio,Ongoing Business Trust Units will be issued to the Counterparty.The issuance of Ongoing Business Trust Units to the Counterpartywill be made in reliance on the prospectus and registrationexemption under section 2.3 of Rule 45-501;

13. Pursuant to subsection 18(1) of ScheduleI of Ontario Regulation 1015 made under the Act, the DiversifiedValue Trust has paid fees in the amount of $27,600 to theCommission in connection with the filing of the DiversifiedValue Prospectus qualifying the distribution of the DiversifiedValue Units;

14. Section 7.3 of Rule 45-501 requires theOngoing Business Trust to make payments to the Commissionin respect of distributions of units of the Ongoing BusinessTrust to the Counterparty;

15. The return to holders of Diversified ValueUnits is dependent on the return of the Ongoing Business Trustby virtue of the Forward Agreement, and as such, payment ofadditional fees by the Ongoing Business Trust pursuant toRule 45-501 will reduce the return of the Diversified ValueTrust and therefore the amount payable by the Counterpartyto the Diversified Value Trust under the Forward Agreement;

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS HEREBY ORDERED, pursuant to section147 of the Act, that the Ongoing Business Trust is exempt fromthe requirement to pay the fees required under section 7.3 ofRule 45-501 in connection with distributions of Ongoing BusinessTrust Units to the Counterparty as contemplated in paragraph7 above.

December 6, 2002.

"M.T. McLeod"                    "R.L. Shirriff"