Securities Law & Instruments

Headnote

Item E(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 E(3) of Appendix C of the Rule.

Rules Cited

Ontario Securities Commission Rule 13-502, Fees, (2003) 26 OSCB 891.

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.

February 10, 2005

McCarthy Tetrault LLP

Attention: Michael C. Nicholas

Dear Sirs and Mesdames:

Re:
Majorica Asset Management Corp.
 
Majorica Bond Fund and Majorica Short Term Income Fund, (the "Existing Pooled Funds")
 
Application Under Section 147 of the Securities Act (Ontario), as amended (the "Act") and section 6.1 of OSC Rule 13-502 -- Fees ("Rule 13-502")

By letter dated January 21, 2005 (the "Application"), you applied on behalf of Majorica Asset Management Corp. ("Majorica"), the manager of certain pooled funds listed in the Application (the "Existing Pooled Funds") and other pooled funds managed by Majorica from time to time (collectively, with the Existing Pooled Funds, referred to herein as the "Pooled Funds"), to the Ontario Securities Commission (the "Commission") under section 147 of the Securities Act (Ontario) (the "Act") for relief from subsections 77(2) and 78(1) of the Act, which requires every mutual fund in Ontario to file interim and comparative annual financial statements (the "Financial Statements") with the Commission. Majorica is the manager of the Existing Pooled Funds and is registered under the Act as an adviser in the categories of investment counsel and portfolio manager and as dealer in the category of limited market dealer.

By the same date and cover, you additionally applied to the securities regulatory authority in Ontario (the "Decision Maker") on behalf of Majorica for an exemption, pursuant to subsection 6.1 of Rule 13-502, from the requirement to pay an activity fee of $5,500 in connection with the Application in accordance with item F(1) of Appendix C of the Rule, on the condition that fees 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 Rule 13-502, and from the requirement to pay an activity fee of $1,500 in connection with the latter relief (the "Fee Exemption").

Item E of Appendix C of Rule 13-502 specifies the activity fee applicable for applications for discretionary relief. Item F(1) specifies that applications under section 147 of the Act pay an activity fee of $5,500, whereas item F(3) specifies that applications for other regulatory relief pay an activity fee of $1,500.

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

1. Majorica is a corporation existing under the laws of the Province of Ontario and its registered office is in Toronto, Ontario. Majorica is, or will be the manager of the Pooled Funds.

2. Majorica is registered under the Act as an adviser in the categories of investment counsel and portfolio manager and as dealer in the category of limited market dealer.

3. The Pooled Funds are, or will be, open-ended mutual fund trusts created under the laws of Ontario. The Pooled Funds will not be reporting issuers in any of the provinces or territories of Canada. Units of the Pooled Funds are, or may be, distributed in each of the provinces and territories of Canada without a prospectus pursuant to exemptions from the prospectus delivery requirements of applicable securities legislation.

4. The Pooled Funds fit within the definition of "mutual fund in Ontario" in section 1(1) of the Act and are thus required to file Financial Statements with the Commission under subsections 77(2) and 78(1) of the Act.

5. Section 2.1(1)1 of National Instrument 13-101 -- System for Electronic Document Analysis and Retrieval (SEDAR) ("Rule 13-101") requires that every issuer required to file a document under securities legislation make its filing through SEDAR. The Financial Statements filed with the Commission thus become publicly available.

6. In the Application, Majorica and the Pooled Funds have requested under section 147 of the Act relief from filing the Financial Statements with the Commission. The activity fee associated with the Application is $5,500 in accordance with item F(1) of Appendix C of Rule 13-502.

7. If Majorica and the Pooled Funds had, as an alternative to the Application, sought an exemption from the requirement to file the Financial Statements via SEDAR, the activity fee for that application would be $1,500 in accordance with item F(3) of Appendix C of Rule 13-502.

8. If the Pooled Funds were reporting issuers seeking the same relief as requested in the Application, such relief could be sought under section 80 of the Act, rather than under section 147 of the Act, and the activity fee for that application would be $1,500 in accordance with item F(3) of Appendix C of Rule 13-502.

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 Majorica and the Pooled Funds from

i) paying an activity fee of $5,500 in connection with the Application, provided that Majorica and the Pooled Funds pay an activity fee on the basis that the Application be treated as an application for other regulatory relief under item F(3) of Appendix C to Rule 13-502, and

ii) paying an activity fee of $1,500 in connection with the Fees Exemption application under item F(3) of Appendix C to Rule 13-502.

Yours truly,

"Leslie Byberg"