Securities Law & Instruments

Headnote

Mackenzie Financial Corporation, et al.

Sub-advisers to registered adviser exempted from the adviser registration requirement in paragraph 22(1)(b) of the Commodity Futures Act, in connection with the registered adviser acting as an adviser, in respect of commodity futures contracts and commodity futures options, to one or more mutual funds -- Exemption for these sub-advisers under the CFA parallels the exemption from the adviser registration requirement in the Securities Act contained in section 7.3 of Ontario Securities Commission Rule 35-502 Non-Resident Advisers -- Exemption expires in three years.

Statutes Cited

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22(1)(b) and 80.

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

Rules Cited

Ontario Securities Commission Rule 35-502 Non-Resident Advisers, s. 7.3.

IN THE MATTER OF

THE COMMODITY FUTURES ACT, R.S.O. 1990,

CHAPTER C. 20, AS AMENDED (the CFA)

AND

IN THE MATTER OF

MACKENZIE FINANCIAL CORPORATION

AND

CREDIT SUISSE ASSET MANAGEMENT, LLC

AND

DREMAN VALUE MANAGEMENT LLC

AND

DRESDNER RCM GLOBAL INVESTORS ASIA LIMITED

AND

HENDERSON GLOBAL INVESTORS LIMITED

AND

POLAR CAPITAL PARTNERS LIMITED

AND

PREMIER FUND MANAGERS LTD.

AND

UOB ASSET MANAGEMENT

AND

WADDELL & REED IVY INVESTMENT COMPANY

 

ORDER

(Section 80)

UPON the application (the Application) of Mackenzie Financial Corporation (the Applicant) to the Ontario Securities Commission (the Commission) for an order, pursuant to section 80 of the CFA, that, with respect to: Credit Suisse Asset Management, LLC; Dreman Value Management, LLC; Dresdner RCM Global Investors Asia Limited; Henderson Global Investors Limited; Polar Capital Partners Limited; Premier Fund Managers Ltd; UOB Asset Management and Waddell & Reed Ivy Investment Company (collectively the Sub-Advisers) acting as an adviser to Mackenzie Financial Corporation (the Principal Adviser) in connection with the Principal Adviser acting as an adviser to certain Funds (as defined below), neither the Sub-Advisers, nor any of their directors, officers or employees (Sub-Adviser Representatives) acting on their behalf as an adviser, shall be subject to paragraph 22(1)(b) of the CFA;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Sub-Advisers are:

(a) Credit Suisse Asset Management, LLC is a corporation organized under the laws of Delaware, in the United States of America;

(b) Dreman Value Management, LLC is a corporation organized under the laws of the U.S.A.;

(c) Dresdner RCM Global Investors Asia Limited is a corporation organized under the laws of Hong Kong;

(d) Henderson Global Investors Limited is a corporation organized under the laws of England;

(e) Polar Capital Partners Limited is a corporation organized under the laws of England;

(f) Premier Fund Managers Ltd. is a corporation organized under the laws of England;

(g) UOB Asset Management is a corporation organized under the laws of Singapore;

(h) Waddell & Reed Ivy Investment Company is a corporation organized under the laws of Delaware, U.S.A.

2. None of the Sub-Advisers are registered under the CFA as either an adviser or dealer.

3. The Principal Adviser is a corporation organized under the laws of Ontario that is resident in Ontario.

4. The Principal Adviser is registered under the CFA as an adviser, in the categories of commodity trading counsel and commodity trading manager.

5. The Principal Adviser is also registered under the Ontario Securities Act (the OSA) as an adviser in the categories of investment counsel and portfolio manager, and, as a dealer, in the category of limited market dealer.

6. Where the Principal Adviser acts as manager of certain mutual funds (each, a Fund), the Principal Adviser may, pursuant to written agreement made between the Principal Adviser and the Fund:

(i) act as an adviser (as defined in the OSA) to the Fund, in respect of securities, and

(ii) act as an adviser to the Fund, in respect of trading commodity futures contracts and commodity futures options,

by exercising discretionary authority in respect of the investment portfolio of the Fund, with discretionary authority to purchase or sell on behalf of the Fund:

(iii) securities, and

(iv) commodity futures contracts and commodity futures options.

7. In connection with the Principal Adviser acting as an adviser to a Fund, in respect of the purchase or sale of commodity futures contracts and commodity futures options, the Principal Adviser, may, from time to time, pursuant to a written agreement made between the Principal Adviser and the Sub-Adviser(s), retain the Sub-Adviser(s) to act as an adviser to the Principal Adviser, by exercising discretionary authority, on behalf of the Principal Adviser, in respect of the investment portfolio of the Fund, with discretionary authority to buy or sell commodity futures options and commodity futures contracts for the Fund, provided that:

(i) in each case, the option or contract must be cleared through an acceptable clearing corporation; and

(ii) in no case will any trading in commodity futures contracts or commodity futures options constitute the primary focus or investment objective of the Fund.

8. There is presently no rule under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA, for a person or company acting as an adviser to another registered adviser in respect of commodity futures options and commodity futures contracts that is similar to the exemption from the adviser registration requirement in clause 25(1)(c) of the OSA for acting as an adviser (as defined in the OSA) in respect of securities, in section 7.3 of Commission Rule 35-502 Non-Resident Advisers.

AND UPON the Commission being of the opinion that to do would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 80 of the CFA, that for a period of three years, neither the Sub-Adviser(s), nor any Sub-Adviser(s) Representative(s) acting on behalf of the Sub-Adviser(s), is subject to paragraph 22(1)(b) of the CFA, in respect of their acting as an adviser to the Principal Adviser, in connection with the Principal Adviser acting as an adviser to one or more Funds, provided that, at the relevant time and in the case of each Fund:

(a) the Principal Adviser is registered under the CFA as an adviser, in the category of commodity trading manager;

(b) the duties and obligations of the Sub-Adviser are set out in a written agreement with the Principal Adviser;

(c) the Principal Adviser has contractually agreed with the Fund to be responsible for any loss that arises out of any failure of the Sub-Adviser:

(i) to exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Fund and its security holders, or

(ii) to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances;

(d) the Principal Adviser cannot be relieved by the Fund or its security holders from its responsibility for any loss referred to in paragraph (c), above;

(e) the security holders of the Fund have received written disclosure, in a prospectus or other offering document, disclosing:

(i) the responsibility of the Principal Adviser for losses arising out of any failure of the Sub-Adviser referred to in paragraph (c), above, and

(ii) that there may be difficulty in enforcing legal rights against the Sub-Adviser(s) because it is resident outside of Canada and all or substantially all of the Sub-Adviser(s) assets may be situated outside of Canada.

(f) any Applicant whose name does not specifically appear in this Order and who proposes to also act as a Sub-Adviser in reliance on the exemption granted under this Order, shall, as a condition to relying on such exemption, have executed and filed with the Commission a verification certificate referencing this Order and confirming the truth and accuracy of the Application with respect to that particular Applicant.

January 18, 2005.

"Suresh Thakrar"
"H. Lorne Morphy"