Securities Law & Instruments

Headnote

Exemptive Relief Applications -- application for mutual fund prospectus lapse date extension.

Applicable Ontario Provisions

Securities Act, R.S.O. 1990, c. S.5, s. 62(5).

November 23, 2004

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, QUEBEC, BRITISH COLUMBIA, MANITOBA,

ALBERTA, SASKATCHEWAN, NEW BRUNSWICK, NOVA SCOTIA,

PRINCE EDWARD ISLAND, NEWFOUNDLAND AND LABRADOR

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF CANADIAN MEDICAL DISCOVERIES FUND INC. (the Filer)

 

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the time period prescribed by the Legislation for the renewal of the prospectus dated November 13, 2003 (the Prospectus) for the Class A shares of the Fund (the "Class A Shares") be extended to those time period that would be applicable if the lapse date of the Prospectus was December 20, 2004;

Under the Mutual Reliance Review System for Exemptive Relief Applications

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions or in Québec Commission Notice 14-101 have the same meaning in this decision unless they are defined in this decision.

Representations

This decision is based on the following facts represented by the Filer:

1. The Fund is a corporation incorporated under the Canada Business Corporations Act by articles of incorporation dated September 20, 1994, as amended.

2. The Fund is registered as a labour sponsored investment fund under the Community Small Business Investment Funds Act (Ontario) and a labour-sponsored venture capital corporation under the Income Tax Act (Canada) and, until December 31, 2004, under the Equity Tax Credit Act (Nova Scotia). The Fund has also been approved as a qualifying fund pursuant to the Labour-sponsored Venture Capital Corporations Act (Saskatchewan). The Fund is a mutual fund pursuant to the Legislation.

3. The Manager of the Fund is Medical Discovery Management Corporation (the Manager).

4. Pursuant to the Legislation or the regulations made thereunder, the lapse date (the Lapse Date) for distribution of Class A Shares is November 13, 2004, except for Quebec, for which it is November 17, 2004.

5. The Fund filed its pro forma renewal prospectus (the Renewal Prospectus) on October 13, 2004, within the time specified by the Legislation. Since October 13, 2004, no material change has occurred. The Fund will file a prospectus amendment indicating that a change in management and performance fees are expected, subject to approval at the Dec. 16, 2004 shareholders' meeting.

6. The Fund has set a shareholders meeting for December 16, 2004 for the approval of changes to the management and performance fees payable by the Fund to the Manager. The Lapse Date extension is required to enable the Fund to include in the Renewal Prospectus disclosure regarding the fee change that reflects the outcome of the shareholders' meeting.

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The decision of the Decision Makers under the Legislation is that the time period provided by the Legislation as they apply to a distribution of securities under the Prospectus are hereby extended to the time period that would be applicable if the Lapse Date for the distribution of Class A Shares under the Prospectus was December 20, 2004.

"Leslie Byberg"
Manager, Investment Funds Branch
Ontario Securities Commission