Securities Law & Instruments

Headnote

Item F(1) of Appendix C of OSC Rule 13-502 Fees -- exemption for pooled funds from paying an activity fee of $5,500 in connection with an application brought under subsection 147 of the Act, provided an activity fee be paid on the basis that the application be treated as an application for other regulatory relief under item F(3) of Appendix C of the Rule.

Rules Cited

Ontario Securities Commission Rule 13-502, Fees, (2003) 26 OSCB 4339 and 27 OSCB 7747.

Securities Act, R.S.O. 1990, c. s.5 as am., ss.77(2) and ss.78(1).

National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR), s. 2.1(1)1.

BY FACSIMILE

January 14, 2005

Borden Ladner Gervais LLP
Scotia Plaza
40 King Street West
Toronto, Ontario
M5H 3Y4

Attention: Derek Smith

Dear Sirs and Mesdames:

Re:
Anacle I Corporation "Anacle"
Application under Section 147 of the Securities Act (Ontario), as amended (the "Act") and Section 6.1 of OSC Rule 13-502 - Fees (the "Fees Rule")
Application # 1026/04

By letter dated December 6, 2004 amended by letter dated December 22, 2004 (the "Application"), you applied on behalf of Anacle:

(a) to the Commission for an order, pursuant to section 147 of the Act, exempting the Non-ASIC Classes (as defined below) from the Financial Statement Requirements (as defined below); and

(b) to the Director for an exemption, pursuant to section 6.1 of the Fees Rule, from:

(i) the requirement to pay an activity fee of $5,500 pursuant to item F(1) of Appendix C to the Fees Rule for an application under section 147 of the Act; and

(ii) the requirement to pay an activity fee of $1,500 pursuant to item F(3) of Appendix C to the Fees Rules for an application under section 6.1 of the Fees Rule;

on the condition that Anacle pay, in lieu of those two fees, the $1,500 activity fee that would be applicable under item F(3) of Appendix C to the Fees Rule for an application for other discretionary relief.

From our view of the Application and other information communicated to Commission staff, we understand the relevant facts and representations to be as follows:

1. Anacle is a corporation amalgamated under the laws of Ontario.

2. In connection with the proposed distribution in Ontario by Anacle of Series A shares of Anacle Short-Term Investment Class ("ASIC"), one of the classes of Anacle shares, Anacle has filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") a simplified prospectus and an annual information form, each dated November 4, 2004 (the "Ontario prospectus documents"). Anacle has also filed a separate preliminary simplified prospectus and annual information form in respect of the Series A Shares of ASIC in Manitoba and British Columbia, which are virtually identical to the Ontario prospectus documents, on December 17, 2004.

3. Anacle intends to be a "mutual fund corporation" under the Income Tax Act (Canada) after it has distributed Series A shares of ASIC to at least 300 purchasers.

4. There are currently four additional Anacle funds, each of which is a separate class of Anacle shares and a "mutual fund" under subsection 1(1) of the Act (the "Existing Non-ASIC Classes"). From time to time, Anacle may create similar classes for additional funds (together with the Existing Non-ASIC Classes, the "Non-ASIC Classes"). Each Non-ASIC Class has or will have a separate portfolio of assets referable to it.

5. The Existing Non-ASIC Classes are owned entirely by M.R.S. Trust Company ("MRS"), and none of the Non-ASIC Classes will be owned by anyone other than MRS and/or one or more of its affiliates that do not have any direct public shareholders. The Non-ASIC Classes will be distributed only to an "accredited investor" as defined in OSC Rule 45-501 -- Exempt Distributions -- or similar rules under Multilateral Instrument 45-103.

6. Accordingly, none of the Non-ASIC Classes is or will be a "reporting issuer" under subsection 1(1) of the Act.

7. However, by virtue of Anacle being organized under the laws of Ontario, each of the Non-ASIC Classes is or will be a "mutual fund in Ontario" under subsection 1(1) of the Act.

8. As mutual funds in Ontario, absent the relief requested, each of the Non-ASIC Classes is or will be required to prepare and file semi-annual and audited annual financial statements and send copies of such financial statements to the holder(s) of the Non-ASIC Classes in accordance with subsections 77(2), 78(1), and 79(1) of the Act (the "Financial Statement Requirements").

9. Absent the relief requested, the filings referred to in paragraph 8 are or will be required to be posted on SEDAR, pursuant to subsection 2.1(1) of National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (the "SEDAR Rule").

10. Anacle will prepare semi-annual and audited annual financial statements for ASIC, send such financial statements to the holders of ASIC shares and file such financial statements for ASIC on SEDAR in accordance with subsections 77(2), 78(1), and 79(1) of the Act and the SEDAR Rule.

11. Anacle will also prepare semi-annual and audited annual financial statements for Anacle on a legal entity basis and in accordance with generally Canadian accepted accounting principles.

Decision

This letter confirms that, based on the information provided in the Application, and the facts and representations above, and for the purposes described in the Application, the Decision Maker hereby exempts Anacle, pursuant to section 6.1 of the Fees Rule, from:

(i) the requirement to pay an activity fee of $5,500 pursuant to item F(1) of Appendix C to the Fees Rule for an application under section 147 of the Act; and

(ii) the requirement to pay an activity fee of $1,500 pursuant to item F(3) of Appendix C to the Fees Rules for an application under section 6.1 of the Fees Rule;

on the condition that Anacle pay, in lieu of those two fees, the $1,500 activity fee that would be applicable under item F(3) of Appendix C to the Fees Rule for an application for other discretionary relief.

"Leslie Byberg"