AIM Funds Management Inc. et al. - MRRS Decision

Headnote

Exemption from the requirement to deliver comparativeannual financial statements for certain year-end dates to registeredsecurityholders of certain mutual funds.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., ss. 79 and 80(b)(iii).

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, MANITOBA,

ONTARIO, NOVA SCOTIA, NEWFOUNDLAND

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

THE FUNDS LISTED IN SCHEDULE"A"

(the "Funds")

MRRS DECISION DOCUMENT

WHEREAS the Canadian securities regulatoryauthority or regulator (the "Decision Maker") in eachof the Provinces of British Columbia, Alberta, Saskatchewan,Manitoba, Ontario, Nova Scotia, Newfoundland and Labrador (the"Jurisdictions") has received an application (the"Application") from AIM Funds Management Inc., AltamiraInvestment Services Inc., Cartier Mutual Funds Inc., ClaringtonFundsInc., Co-operators Mutual Funds Limited, Counsel Group of FundsInc., Dynamic Mutual Funds Ltd., Fidelity Investments CanadaLimited, Franklin Templeton Investments Corp., Mackenzie FinancialCorporation, McLean Budden Funds Inc., National Bank SecuritiesInc., Phillips, Hager & North Investment Management Ltd.,Putnam Investments Inc. and Sceptre Investment Counsel Limited(collectively the "Managers") and the Funds for adecision pursuant to the securities legislation of the Jurisdictions(the "Legislation") for relief from the requirementto deliver comparative annual financial statements of the Fundsto certain securityholders of the Funds unless they have requestedto receive them.

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

AND WHEREAS, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions.

AND WHEREAS it has been represented bythe Managers to the Decision Makers that:

(a) The Funds are either open-ended mutualfund trusts or separate classes of mutual fund corporationsgoverned by the laws of a Jurisdiction.

(b) Each Manager acts as manager of theFunds set out in Schedule "A" and, in the caseof its Funds which are trusts, unless otherwise indicatedon Schedule "A", it is the trustee of such Funds.

(c) The Funds, except for Phillips, Hager& North Vintage Fund and except for the Funds managedby National Bank Securities Inc. are reporting issuers ineach of the Participating Jurisdictions. The Phillips, Hager& North Vintage Fund is a reporting issuer in all ofthe Participating Jurisdictions except Nova Scotia and Newfoundland.The Funds managed by National Bank Securities Inc. are reportingissuers in each of the Participating Jurisdictions exceptNewfoundland. None of the Funds is in default in any ofthe applicable Participating Jurisdictions in which it isa reporting issuer.

(d) Securities of the Funds are presentlyoffered for sale on a continuous basis in provinces andterritories of Canada pursuant to a simplified prospectus.

(e) Each of the Funds is required to deliverannually, within 140 days of its financial year-end, toeach holder of its securities ("Securityholders"),comparative financial statements in the prescribed formpursuant to the Legislation.

(f) Each Manager will send to Securityholderswho hold securities of the Funds in client name (whetheror not the Manager is the dealer) (the "Direct Securityholders")in each year, a notice advising them that they will notreceive the annual financial statements of the Funds forthe year then ended unless they request same, and providingthem with a request form to send back, by fax or prepaidmail, if they wish to receive the annual financial statements.The notice will advise the Direct Securityholders whereannual financial statements can be found on the websiteslisted in Schedule "A" (including on the SEDARwebsite) and downloaded. Each Manager would send such financialstatements to any Direct Securityholder who requests themin response to such notice or who subsequently requeststhem.

(g) Securityholders who hold their securitiesin the Funds through a nominee will be dealt with pursuantto National Instrument 54-101.

(h) Securityholders will be able to accessannual financial statements of the Funds either on the SEDARwebsite or on the relevant website of the Manager or bycalling the Manager's toll-free phone line listed in Schedule"A". Top ten holdings which are updated on a periodicbasis as listed in Schedule "A" will also be accessibleto Securityholders on each Manager's website or by callingthe Manager's toll-free line.

(i) There would be substantial cost savingsif the Funds are not required to print and mail annual financialstatements to those Direct Securityholders who do not wantthem.

(j) The Canadian Securities Administrators("CSA") have published for comment proposed NationalInstrument 81-106 ("NI 81-106") which, among otherthings, would permit a Fund not to deliver annual financialstatements to those of its Securityholders who do not requestthem, if the Funds provide each Securityholder with a requestform under which the Securityholder may request, at no costto the Securityholder, to receive the mutual fund's annualfinancial statements for that financial year.

(k) NI 81-106 would also require a Fundto have a toll-free telephone number for or accept collectcalls from persons or companies that want to receive a copyof, among other things, the annual financial statementsof the Fund.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

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

AND WHEREAS the Decision Makers are satisfiedthat making the Decision will not adversely affect the rule-makingprocess with respect to proposed National Instrument 81-106and is consistent with National Instrument 54-101;

THE DECISION of the Decision Makers pursuantto the Legislation is that:

i) the Funds; and

ii) mutual funds created subsequent to thedate of the application, December 13, 2002, that are offeredby way of simplified prospectus and managed by the Manager,

shall not be required to deliver their comparativeannual financial statements for the year ended December 31,2002, or for such other year-end date specified in Schedule"A", to their Direct Securityholders other than thoseDirect Securityholders who have requested to receive them providedthat:

a) the Managers shall file on SEDAR, underthe annual financial statements category, confirmation ofmailing of the request forms that have been sent to theDirect Securityholders as described in clause (f) of therepresentations within 90 days of mailing the request forms;

b) the Managers shall file on SEDAR, underthe annual financial statements category, information regardingthe number and percentage of requests for annual financialstatements made by the return of the request forms, on aprovince-by-province basis within 30 days after the endof each quarterly period beginning from the date of mailingthe request forms and ending 12 months from the date ofmailing;

c) the Managers shall record the numberand summary of complaints received from Direct Securityholdersabout not receiving the annual financial statements andshall file on SEDAR, under the annual financial statementscategory, this information within 30 days after the endof each quarterly period beginning from the date of mailingthe request forms and ending 12 months from the date ofmailing;

d) the Managers shall, if possible, measurethe number of "hits" on the annual financial statementsof the Funds on the Manager's website and shall file onSEDAR, under the annual financial statements category, thisinformation within 30 days after the end of each quarterlyperiod beginning from the date of mailing the request formsand ending 12 months from the date of mailing; and

e) the Managers shall file on SEDAR, underthe annual financial statements category, estimates of thecost savings resulting from the granting of this Decisionwithin 90 days of mailing the request forms.

January 16, 2003.

"Kerry D. Adams"                    "RobertL. Shirriff"

SCHEDULE "A" toMRRS DECISION DOCUMENT

LIST OF APPLICANT MANAGERSAND THEIR FUNDS

Top Ten Holdings information will be updatedmonthly

Top Ten Holdings information will be updatedquarterly

Top Ten Holdings information will be updatedquarterly

Desjardins Trust Inc. is the trustee of thefollowing mutual fund trusts which were established under thelaws of Quebec:

Top Ten Holdings information will be updatedmonthly

Top Ten Holdings information will be updatedmonthly

Top Ten Holdings information will be updatedquarterly

Top Ten Holdings information will be updatedmonthly

Dynamic Corporate Class Funds (of DynamicGlobal Fund Corporation):

StrategicNova Funds:

Top Ten Holdings information will be updatedquarterly

Fidelity Capital Structure Corp.{*}:

Fidelity NorthStar Class {†††}

Top Ten Holdings information will be updatedquarterly for Funds whose name begins with 'Templeton' or 'Mutual'and for Franklin Templeton Treasury Bill Fund and the FranklinTempleton Portfolios

Top Ten Holdings information will be updatedmonthly for Funds whose name begins with 'Franklin' or 'Bissett'and for Franklin Templeton U.S. Money Market Fund, FranklinTempleton U.S. Money Market Tax Class, Franklin Templeton MoneyMarket Fund and Franklin Templeton Money Market Tax Class

Top Ten Holdings information will be updatedmonthly

Canadian & US Group of Mutual Funds:

Global Group of Mutual Funds

Keystone Group of Mutual Funds

Quadrus Group of Funds

Mackenzie Capital Class Funds (ofMackenzie Financial Capital Corporation)

Top Ten Holdings information will be updatedat least quarterly

Top Ten Holdings information will be updatedat least quarterly

National Bank Strategic Yield Class of NationalBank Funds Corporation{*}{†}

National Bank Trust Inc. is the trustee ofthe following Funds:

Top Ten Holdings information will be updatedmonthly

State Street Trust Company Canada is thetrustee of the following Funds which were established underthe laws of British Columbia:

Top Ten Holdings information will be updatedquarterly

Top Ten Holdings information will be updatedmonthly

{†}The fiscal year-end of these Funds is March 31, 2003

{*}the trustee of these Funds is Royal Trust

{**}these Funds are governed by the Canada Business CorporationsAct

{†}The fiscal year-end of these Funds is September 30, 2002

{†}The fiscal year-end of these Funds is June 30, 2003

{*}Fidelity Capital Structure Corp. is governed by the laws ofAlberta.

{†}The Fiscal year-end of these Funds is February 28, 2003

{††}The Fiscal year-end of these Funds is March 31, 2003

{†††}The Fiscal year-end of these Funds is November 30, 2003

{*}Franklin Templeton Tax Class Corp. is governed by the lawsof Alberta.

{†}The fiscal year-end of these Funds is April 30, 2003

{*}The trustee of these Funds is The Trust Company of Bank ofMontreal

{**}The trustee of this Fund is Investors Group Trust Co. Ltd.

{†}The fiscal year-end of these Funds is June 30, 2003

{*}The Funds are not reporting issuers in Newfoundland.

{†}The fiscal year-end of these Funds is September 30, 2003

{*}This Fund is not a reporting issuer in Nova Scotia or Newfoundland