PFSL Investments Canada Ltd. et al. - MRRS Decision

Headnote

MRRS -- Approval of fund mergers despite differences in investment objectives -- financial statements of continuing fund not required to be sent to unitholders of the terminating funds provided information circular sent in connection with the unitholder meeting clearly discloses the various ways unitholders can access the financial statements -- exemption from sending financial statements for future mergers as well.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6.

August 10, 2006

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR,

YUKON TERRITORY, NORTHWEST TERRITORIES

AND NUNAVUT TERRITORY

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

PFSL INVESTMENTS CANADA LTD.

(the Manager)

AND

PRIMERICA INTERNATIONAL AGGRESSIVE

GROWTH PORTFOLIO FUND,

PRIMERICA GLOBAL AGGRESSIVE GROWTH

PORTFOLIO FUND (FORMERLY PRIMERICA

INTERNATIONAL RSP AGGRESSIVE GROWTH

PORTFOLIO FUND), PRIMERICA INTERNATIONAL

HIGH GROWTH PORTFOLIO FUND,

PRIMERICA INTERNATIONAL GROWTH

PORTFOLIO FUND, AND PRIMERICA CANADIAN

CONSERVATIVE PORTFOLIO FUND

(collectively, the Terminating Funds)

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 Manager and the Terminating Funds (together, the Filers) for a decision under the securities legislation of the Jurisdictions (the Legislation) for:

(a) approval of the mergers (the Mergers) of the Terminating Funds into the applicable Continuing Funds (as defined below); and

(b) approval of any merger, after the date of this decision, of funds managed by the Manager that meet all of the criteria for pre-approval of mergers under section 5.6 of the Instrument except for the financial statement delivery requirements of sub-paragraph 5.6(1)(f)(ii) of the Instrument (the Future Mergers).

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 have the same meaning in this decision unless they are defined in this decision.

"Continuing Funds" means Primerica Canadian Aggressive Growth Portfolio Fund, Primerica Canadian High Growth Portfolio Fund, Primerica Canadian Growth Portfolio Fund and Primerica Canadian Balanced Portfolio Fund;

"Fund" or "Funds" means, individually or collectively, the Terminating Funds and the Continuing Funds.

Representations

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

1. The Manager is a corporation established under the laws of Canada. The Manager is the manager and trustee of each of the Funds.

2. Each Fund is an open-ended mutual fund trust established under the laws of the Province of Ontario pursuant to certain trust agreements.

3. Units of the Funds are currently qualified for sale in all of the provinces and territories of Canada by a simplified prospectus and an annual information form, each dated November 22, 2005, as amended by amendment no. 1 thereto dated May 3, 2006 and amendment no. 2 thereto dated June 26, 2006.

4. Each of the Funds is a reporting issuer under the applicable securities legislation of each province and territory of Canada and is not in default of any requirements of applicable securities legislation.

5. Each Terminating Fund is a strategic allocation fund and invests 100% of its assets in securities of underlying mutual funds.

6. The net asset value of each Fund is calculated on a daily basis on each day that the Manager is open for business.

7. The Manager proposes to merge each of the Terminating Funds into the Continuing Funds on a tax deferred basis as follows:

(a) Primerica International Aggressive Growth Portfolio Fund and Primerica Global Aggressive Growth Portfolio Fund (formerly Primerica International RSP Aggressive Growth Portfolio Fund) into Primerica Canadian Aggressive Growth Portfolio Fund;

(b) Primerica International High Growth Portfolio Fund into Primerica Canadian High Growth Portfolio Fund;

(c) Primerica International Growth Portfolio Fund into Primerica Canadian Growth Portfolio Fund; and

(d) Primerica Canadian Conservative Portfolio Fund into Primerica Canadian Balanced Portfolio Fund.

8. Each proposed Merger will be structured substantially as follows:

(a) The Terminating Fund will transfer all of its assets and liabilities to the corresponding Continuing Fund for an amount equal to the net value of the assets transferred as at the close of business on the effective date of the Merger, which amount will be satisfied as described in (b) below.

(b) Units of the Continuing Fund will be issued by the Continuing Fund to the corresponding Terminating Fund having a net asset value equal to the net value of the assets transferred by the Terminating Fund.

(c) The Terminating Fund will redeem its outstanding units and pay the redemption price for such units by distributing the units of the corresponding Continuing Fund to the Terminating Fund's unitholders.

(d) The units of the Continuing Fund received by the unitholders of the corresponding Terminating Fund will have an aggregate net asset value equal to the aggregate net asset value of the units of the Terminating Fund that are being redeemed.

(e) After the units of the Continuing Fund are distributed by the corresponding Terminating Fund to its unitholders, the Terminating Fund will be wound up as soon as reasonably practicable.

9. The assets of each Terminating Fund are acceptable to the portfolio manager of the corresponding Continuing Fund and are, or will be, consistent with the investment objectives of the corresponding Continuing Fund.

10. The units of the Continuing Fund received by a unitholder of the corresponding Terminating Fund will have the same fee structure as the units of the Terminating Fund held by that unitholder.

11. Unitholders of the Terminating Funds will continue to have the right to redeem units of the Terminating Funds at any time up to the close of business on the effective date of the Mergers.

12. Following the Mergers, investors in each Terminating Fund who had established a systematic investment plan or a systematic withdrawal plan will have a comparable plan established with respect to the corresponding Continuing Fund unless the investor advises the Manager otherwise.

13. The costs attributable to the Mergers (consisting primarily of legal, proxy solicitation, printing and mailing costs) will be borne by the Manager and will not be borne by the Terminating Funds or the Continuing Funds.

14. At special meetings of unitholders of each Terminating Fund to be held on August 18, 2006, unitholders of each Terminating Fund will be asked to approve the Mergers. Unitholders of each Continuing Fund will also be asked to approve certain changes to the fundamental investment objectives and investment strategies of the Continuing Funds. A notice of meeting and a management information circular were mailed to unitholders of the Terminating Funds and the Continuing Funds on July 27 and 28, 2006 and filed on SEDAR in accordance with applicable securities legislation.

15. Approval of the Mergers is required because each of the Mergers does not satisfy all of the criteria for pre-approved reorganizations and transfers set forth in section 5.6 of NI 81-102 in that each Terminating Fund does not, in the opinion of the Manager, have "substantially similar fundamental investment objectives" as the Continuing Fund into which it will be merged.

16. The primary differences between the fundamental investment objectives of each Terminating Fund and the corresponding Continuing Fund relate to the level of foreign securities held by the underlying funds in which certain of the Terminating Funds invest, as compared to the corresponding Continuing Fund. However, the Filers submit that with the elimination of foreign content restrictions for registered accounts, the Mergers will remove redundancy among the Terminating Funds and the Continuing Funds (particularly in light of the proposed changes to the fundamental investment objectives of the Continuing Funds effective immediately following the Mergers) and result in a strong, streamlined modern family of funds, combined with greater operating efficiencies and economies of scale.

17. Additionally, the most recent annual and interim financial statements of the Continuing Funds will not be sent to unitholders of the corresponding Terminating Funds but, instead, the Manager will prominently disclose in the information circular sent to unitholders of the Terminating Funds that they can obtain the most recent interim and annual financial statements of the Continuing Funds by accessing the SEDAR website at www.sedar.com, by toll-free number, by fax or by e-mail.

18. The Filers submit that if a securityholder is interested in reading the financial statements of the applicable Continuing Fund, he or she would take the time to access them by one of the means available. There would be cost savings if the Manager did not have to include the financial statements in the proxy packages sent to unitholders of the Terminating Funds.

19. Except as noted above, as at the time of the Mergers, the Mergers will meet all of the other conditions necessary for mutual funds to complete a merger without regulatory approval as prescribed by section 5.6 of NI 81-102.

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 Mergers and the Future Mergers are approved provided that:

(a) the information circular sent to unitholders with respect to a Merger or Future Merger provides sufficient information about the applicable merger to permit unitholders to make an informed decision about that merger;

(b) the information circular sent to unitholders in connection with a Merger or a Future Merger prominently discloses that unitholders can obtain the most recent interim and annual financial statements of the applicable Continuing Fund by accessing the SEDAR website at www.sedar.com, upon request and at no cost by calling toll-free, by fax or by e-mail;

(c) upon request by a unitholder for financial statements, the Manager will make best efforts to provide the unitholder with financial statements of the applicable continuing fund in a timely manner so that the unitholder can make an informed decision regarding a Merger or a Future Merger; and

(d) each Terminating fund, Continuing fund and any mutual fund involved in a Merger or a Future Merger has, or will have, an unqualified audit report in respect of its last completed financial period.

This Decision, as it relates to the jurisdiction of a Decision Maker, will terminate one year after the publication in final form of any legislation or rule of that Decision Maker dealing with matters in paragraph 5.5(1)(b) of NI 81-102.