RBC Asset Management Inc. - MRRS Decision

Headnote

Exemption from the requirement to deliver arenewal prospectus annually to mutual fund investors purchasingunits pursuant to pre-authorized investment plans, subject tocertain conditions.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c. S.5,as am., s. 71 and s. 147.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN,

MANITOBA, ONTARIO, NOVA SCOTIA,

NEW BRUNSWICK, PRINCE EDWARDISLAND,

NEWFOUNDLAND AND LABRADOR,YUKON TERRITORY,

NORTHWEST TERRITORIES ANDNUNAVUT

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

RBC CANADIAN T-BILL FUND

RBC CANADIAN MONEY MARKETFUND

RBC PREMIUM MONEY MARKET FUND

RBC $U.S. MONEY MARKET FUND

RBC CANADIAN SHORT-TERM INCOMEFUND

RBC BOND FUND

RBC CANADIAN BOND INDEX FUND

RBC MONTHLY INCOME FUND

RBC GLOBAL BOND FUND

RBC BALANCED FUND

RBC TAX MANAGED RETURN FUND

RBC BALANCED GROWTH FUND

RBC GLOBAL BALANCED FUND

RBC SELECT CONSERVATIVE PORTFOLIO

RBC SELECT BALANCED PORTFOLIO

RBC SELECT GROWTH PORTFOLIO

RBC SELECT CHOICES CONSERVATIVEPORTFOLIO

RBC SELECT CHOICES BALANCEDPORTFOLIO

RBC SELECT CHOICES GROWTHPORTFOLIO

RBC SELECT CHOICES AGGRESSIVEGROWTH PORTFOLIO

RBC DIVIDEND FUND

RBC CANADIAN VALUE FUND

RBC CANADIAN EQUITY FUND

RBC CANADIAN INDEX FUND

RBC O'SHAUGHNESSY CANADIANEQUITY FUND

RBC CANADIAN GROWTH FUND

RBC ENERGY FUND

RBC PRECIOUS METALS FUND

RBC U.S. EQUITY FUND

RBC U.S. INDEX FUND

RBC U.S. RSP INDEX FUND

RBC O'SHAUGHNESSY U.S. VALUEFUND

RBC U.S. MID-CAP EQUITY FUND

RBC O'SHAUGHNESSY U.S. GROWTHFUND

RBC LIFE SCIENCE AND TECHNOLOGYFUND

RBC INTERNATIONAL EQUITY FUND

RBC INTERNATIONAL RSP INDEXFUND

RBC EUROPEAN EQUITY FUND

RBC ASIAN EQUITY FUND

RBC GLOBAL EDUCATION FUND

RBC GLOBAL TITANS FUND

RBC GLOBAL COMMUNICATIONSAND MEDIA SECTOR FUND

RBC GLOBAL CONSUMER TRENDSSECTOR FUND

RBC GLOBAL FINANCIAL SERVICESSECTOR FUND

RBC GLOBAL HEALTH SCIENCESSECTOR FUND

RBC GLOBAL INDUSTRIALS SECTORFUND

RBC GLOBAL RESOURCES SECTORFUND

RBC GLOBAL TECHNOLOGY SECTORFUND

RBC ADVISOR CANADIAN BONDFUND

RBC ADVISOR GLOBAL HIGH YIELDFUND

RBC ADVISOR BLUE CHIP CANADIANEQUITY FUND

(collectively, the "ExistingFunds")

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Nova Scotia, New Brunswick, Prince Edward Island, Newfoundlandand Labrador, Yukon Territory, Northwest Territories and Nunavut(the "Jurisdictions") has received an applicationfrom RBC Asset Management Inc. (the "Manager"), onbehalf of the Existing Funds and any future mutual funds (the"Future Funds") of which the Manager or any affiliatedsuccessor to the Manager may be the manager, for a decisionpursuant to the securities legislation of the Jurisdictions(the "Legislation") that the requirement in the Legislationto deliver the latest prospectus and any amendment to the prospectustogether with the right not to be bound by an agreement of purchaseand sale (the "Delivery Requirement") not apply inrespect of a purchase and sale of securities of the ExistingFunds or the Future Funds (collectively, the "Funds")pursuant to a pre-authorized investment plan (a "PAP");

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, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice 14-101;

AND WHEREAS the Manager has representedto the Decision Makers that:

(a) The Funds are, or will be, open-endedmutual funds established under the laws of Ontario.

(b) The Manager or an affiliated successorto the Manager is, or will be, the portfolio adviser of theFunds. The Manager is registered as an adviser, or in an equivalentcategory, in each of the Jurisdictions except Nunavut.

(c) Royal Mutual Funds Inc. ("RMFI")or an affiliated successor to RMFI is, or will be, a distributorof the Funds. RMFI is registered as a mutual fund dealer,or in an equivalent category, in each of the Jurisdictions.

(d) The Manager and RMFI are affiliates.

(e) The Funds are, or will be, reporting issuersin each of the Jurisdictions and the Existing Funds are notin default of any requirement of the Legislation.

(f) Securities of the Funds are, or will be,offered for sale on a continuous basis in each of the Jurisdictionspursuant to a simplified prospectus.

(g) Each of the Funds offers, or will offer,investors the opportunity to invest in a Fund on a regularbasis pursuant to a PAP which is administered by RMFI.

(h) Under the terms of a PAP, an investorinstructs RMFI to accept additional contributions in a specifiedamount on a frequency determined by the investor and to applysuch contributions on each scheduled investment date to additionalinvestments in specified Funds. The investor authorizes RMFIto debit a specified account in the amount of the additionalcontributions. An investor may terminate the instructionsat any time and the additional investments will not be madeon the next scheduled investment date.

(i) An investor who establishes a PAP (a "PAPParticipant") receives a copy of the simplified prospectusrelating to the Funds at the time a PAP is established.

(j) Pursuant to the Legislation, RMFI, whenit receives an order or subscription for a security of a Fundoffered in a distribution to which the Delivery Requirementapplies, must, unless it has previously done so, send by prepaidmail or deliver to the purchaser the latest prospectus andany amendment to the prospectus filed either before enteringinto an agreement of purchase and sale resulting from theorder or subscription or not later than midnight on the secondday after entering into such agreement.

(k) Pursuant to the Legislation, an agreementreferred to in paragraph (j) is not binding on the purchaserif RMFI receives notice of the intention of the purchasernot to be bound by the agreement of purchase and sale withina specified time period.

(l) The terms of the PAP are such that aninvestor can terminate the instructions to RMFI at any time.Therefore, there is no agreement of purchase and sale untila scheduled investment date arrives and the instructions havenot been terminated. At this point the debit is processedand the securities are purchased.

(m) In order to ensure that it has been complyingwith the Legislation, RMFI has mailed or delivered to allPAP Participants who purchase securities of the Existing Fundspursuant to a PAP the simplified prospectus of the ExistingFunds at the time the investor enters into the PAP and annuallyfollowing the time a new prospectus (a "Renewal Prospectus")is filed pursuant to the Legislation.

(n) There is significant cost involved inthe annual printing and mailing or delivery of the RenewalProspectus to PAP Participants. The Manager estimates theannual cost of production of a Renewal Prospectus, which isborne by the Existing Funds, to be approximately $2.00 perRenewal Prospectus. In addition, RMFI bears an additionalmailing cost which is approximately $1.25 per Renewal Prospectus.

(o) Typically the Renewal Prospectus is mailedto PAP Participants on or about August 1.

(p) RMFI and the Manager are proposing tosend to securityholders of the Existing Funds who are PAPParticipants a notice (the "Notice") advising themof the terms of the relief and that PAP Participants willnot receive the Renewal Prospectus of the Existing Funds in2003 and thereafter, unless they request it. PAP Participantswill receive with the Notice a request form (the "RequestForm") to send back, by fax or prepaid mail, if theywish to receive the Renewal Prospectus.

(q) The Notice will advise PAP Participantsthat the Renewal Prospectus and any amendments thereto maybe found either on the SEDAR website or on the Existing Funds'website. The Notice will also advise PAP Participants thatthey can subsequently request the current Renewal Prospectusand any amendments thereto on a toll-free number or at a branchof RBC Royal Bank. The Notice will advise PAP Participantsthat they will not have a right to withdraw (a "WithdrawalRight") from an agreement of purchase and sale in respectof purchases pursuant to a PAP, but that they will have aright (a "Misrepresentation Right") of action fordamages or rescission in the event the Renewal Prospectuscontains a misrepresentation, whether or not they requestthe Renewal Prospectus, and that they will continue to havethe right to terminate the PAP at any time before a scheduledinvestment date.

(r) RMFI and the Manager are proposing thatfuture investors who choose to become PAP Participants andinvest in the Funds will be advised in the documents theyreceive in respect of their participation in the PAP or inthe simplified prospectus of the Funds (in the section ofthe prospectus that describes the PAP) of the terms of therelief and that PAP Participants will not receive a RenewalProspectus unless they request it at the time they decideto enrol in the PAP or subsequently on a toll-free numberor at a branch of RBC Royal Bank. They will also be advisedthat a Renewal Prospectus and any amendments thereto may befound either on the SEDAR website or on the Funds' website.Future PAP Participants will also be advised that they willnot have a Withdrawal Right in respect of purchases pursuantto a PAP, other than in respect of the initial purchase andsale, but they will have a Misrepresentation Right, whetheror not they request the Renewal Prospectus, and they willhave the right to terminate the PAP at any time before a scheduledinvestment date.

(s) PAP Participants will also be advisedannually in the account statement sent by RMFI how they canrequest the current Renewal Prospectus and any amendmentsthereto and that they have a Misrepresentation Right.

AND WHEREAS under the System this MRRSDecision Document evidences the decision 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 the Existing Funds are not requiredafter the date of the 2003 Renewal Prospectus to comply withthe Delivery Requirement in respect of purchases and sales ofsecurities of the Existing Funds to PAP Participants who purchasethe securities pursuant to a PAP which is in existence on thedate of the 2003 Renewal Prospectus provided that:

(i) PAP Participants who are current securityholdersof the Existing Funds are sent the Notice described in paragraph(p) above containing the information described in paragraph(q) above together with the Request Form referred to in paragraph(p) above;

(ii) under the terms of the PAP, a PAP Participantcan terminate participation in the PAP at any time prior toa scheduled investment date;

(iii) PAP Participants are advised annuallyin the account statement sent by RMFI how they can requestthe current Renewal Prospectus and any amendments theretoand that they have a Misrepresentation Right; and

(iv) the Misrepresentation Right in the Legislationof a Jurisdiction is maintained in respect of a PAP Participantwhether or not a Renewal Prospectus is requested or received.

AND THE DECISION of the Decision Makerspursuant to the Legislation is that the Funds are not requiredafter the date of the 2003 Renewal Prospectus to comply withthe Delivery Requirement in respect of purchases and sales ofsecurities of the Funds to PAP Participants who purchase thesecurities pursuant to a PAP which is established after thedate of the 2003 Renewal Prospectus provided that:

(i) PAP Participants are advised, in the simplifiedprospectus of the Funds or in the documents they receive inrespect of their participation in the PAP, of the informationdescribed in paragraph (r) above;

(ii) under the terms of the PAP, a PAP Participantcan terminate participation in the PAP at any time prior toa scheduled investment date;

(iii) PAP Participants are advised annuallyin the account statement sent by RMFI how they can requestthe current Renewal Prospectus and any amendments theretoand that they have a Misrepresentation Right; and

(iv) the Misrepresentation Right in the Legislationof a Jurisdiction is maintained in respect of a PAP Participantwhether or not a Renewal Prospectus is requested or received.

THE DECISION, as it relates to the jurisdictionof a Decision Maker, will terminate one year after the publicationin final form of any legislation or rule dealing with the DeliveryRequirement.

August 5, 2003.