Approval of a change in control of managers under subsection 5.5(2) of National Instrument 81-102 Mutual Funds arising as a result of a sale agreement. Notice of change in control sent to securityholders in compliance with clause 5.8 (1)(a) of National Instrument 81-102 Mutual Funds.
Applicable Legislative Provisions
National Instrument 81-102 Mutual Funds, ss. 5.5(2), 5.7(1)(a), 5.8(1)(a).
February 20, 2007
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
MANITOBA, ONTARIO, QUÉBEC, NOVA SCOTIA,
NEW BRUNSWICK, NEWFOUNDLAND AND
LABRADOR AND PRINCE EDWARD ISLAND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
FIRST ASSET INVESTMENT MANAGEMENT INC.,
TDK FUND MANAGEMENT INC.,
TRIAX YIELD TRUST MANAGEMENT INC. and
FIRST ASSET FUNDS INC.
(collectively, the "Filers" or "Managers")
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (each a "Decision Maker", and together, the "Decision Makers") in each of the Jurisdictions has received an application from the Filers (the "Application") for approval pursuant to Section 5.5(2) of National Instrument 81-102 - Mutual Funds ("NI 81-102") for a change of control of manager of the mutual funds listed in Schedule A (the "Funds" ) resulting from the acquisition of Triax Capital Corporation ("Triax") and First Asset Funds Inc. ("FAFI") directly, and TDK Fund Management Inc. ("TDK"), Triax Yield Trust Management Inc. ("TYTM") and First Asset Investment Management Inc. ("FAIMI") indirectly, by First Asset Capital Corp. ("FACC") (the "Acquisition").
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, as applicable.
Defined terms contained in National Instrument 14-101 - Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following facts represented by the Filers:
1. The Managers are the respective managers of the Funds.
2. TDK, TYTM and FAIMI are wholly-owned subsidiaries of Triax.
3. Triax, a company based in Toronto, Ontario, is an unlimited liability company formed under the laws of the province of Nova Scotia.
4. FAFI is a company based in Toronto, Ontario and was continued under the Canada Business Corporations Act.
5. The Managers each manage and advise on a number of investment products, including the Funds. The Managers typically handle and oversee all day-to-day operations of the Funds and in some circumstance also provide investment management and trustee services.
6. The Funds include an investment fund offered on a continuous basis and closed-end investment funds which are listed on the Toronto Stock Exchange (the "TSX").
7. None of the Funds are on any list of defaulting reporting issuers maintained by any Regulator.
8. AMG Canada Corp. ("AMG") is a company incorporated pursuant to the laws of Nova Scotia. AMG is an indirect wholly-owned subsidiary of Affiliated Managers Group, Inc. ("AMG US"). AMG US is a US public company based in Boston, Massachusetts and incorporated pursuant to the laws of Delaware. AMG's securities are listed and posted for trading on the New York Stock Exchange under the symbol "AMG".
9. AMG is the sole securityholder of Triax and FAFI.
First Asset Capital Corp.
10. FACC was incorporated on December 15, 2006 pursuant to the Business Corporations Act (Ontario) to complete the Acquisition.
11. The shareholders of FACC are directors and/or officers and employees of Triax and FAFI, or family trusts in respect of which these individuals are trustees.
Change of Control
12. AMG has entered into a sale agreement dated January 24, 2007 (the "Agreement") with FACC pursuant to which all of the issued and outstanding shares in the capital of Triax and FAFI will be acquired by FACC.
13. The Acquisition involves a direct change of control of Triax and FAFI and an indirect change of control of TDK, TYTM and FAMI.
14. The change of control of the Managers will not affect the operation and administration of their respective funds as, but for the resignation of an AMG appointee to the Board of Directors of each of Triax and FAFI, the officers and directors of the Managers will not change.
15. The change of control of each of the Managers will have no negative consequences on the ability of the Managers to comply with applicable regulatory requirements or their ability to satisfy their obligations to the Funds and their securityholders.
Each of the Decision Makers is satisfied that, based on the information and representations contained in the Application and this decision, and for the purposes described in the Application, the Decision Makers, as applicable, hereby grant approval pursuant to Section 5.5(2) of NI 81-102 in respect of the change of control of the Managers.
Fund Manager[ ] Triax Diversified High Yield Trust Triax Yield Trust Management Inc. New Millennium Technology Trust First Asset Investment Management Inc. Triax CaRTS Technology Trust First First Asset Investment Management Inc. Global 45 Split Corp. First Asset Funds Inc. TDK Resource Fund Inc. TDK Fund Management Inc.