Securities Law & Instruments


Relief granted from the requirement in National Instrument 81-107 Independent Review Committee for Investment Funds to appoint an IRC and to do so by May 1, 2007 -- The affected funds will terminate no later than October 1, 2007 in advance of November 1, 2007 deadline for full compliance under NI 81-107.

Applicable Legislative Provisions

National Instrument 81-107 Independent Review Committee for Investment Funds, ss. 3.2, 7.1, 8.2(2).

April 24, 2007





("NI 81-107")




(the "Manager")





(the "NSC Funds")



(Section 7.1 of NI 81-107)


The Director (the "Director") of the Ontario Securities Commission (the "Commission") has received an application under section 7.1 of NI 81-107 from the Manager and the NSC Funds for an exemption from the requirements contained in sections 3.2 and 8.2(2) of NI 81-107 that the Manager must appoint the first members of NSC Funds' independent review committee ("IRC") by May 1, 2007 (the "Requested Relief").


This exemption is based on the following facts represented by the Manager:

1. The Manager is a corporation incorporated on February 5, 2003 under the laws of the Province of Ontario and has its principal place of business at 3650 Victoria Park Avenue, Suite 200, Toronto, Ontario, M2H 3P7.

2. The Manager is registered as an adviser in the categories of investment counsel and portfolio manager and as a limited market dealer with the Commission.

3. The Manager is the manager, trustee and portfolio adviser of the NSC Funds.

4. The NSC Funds are mutual fund trusts established under the laws of Ontario, pursuant to a declaration of trust.

5. The NSC Funds are reporting issuers in Ontario and offer their securities pursuant to a simplified prospectus and annual information form dated December 8, 2006.

6. The Manager offers portfolio management and related financial advice and services, including investment consulting and discretionary investment management, to individual investors (each, a "Client") seeking wealth management or related services through a managed account ("Managed Account").

7. Pursuant to a written agreement between the Manager and the Client, the Manager makes investment decisions for the Managed Account and has full discretionary authority to trade in securities for the Managed Account without obtaining the specific consent of the Client to the trade.

8. Investments in individual securities may not be appropriate in certain circumstances for the Manager's Clients. The Manager offers the NSC Funds to its Clients to give them the benefit of asset diversification, access to investment products with very high minimum investment levels and economies of scale regarding minimum commission charges on portfolio trades (in contrast to individual trades in each Managed Account).

9. The only investors in the NSC Funds are the Manager's Clients, each of who have opened a Managed Account with the Manager.

10. The Manager has recently determined that the regulatory costs associated with the operation of the NSC Funds outweigh the benefits of the NSC Funds for its Clients. Accordingly, the Manager proposes to terminate the NSC Funds.

11. Since February 2007, the Manager has been actively engaged in the process of creating new mutual funds (the "NSPC Pooled Funds") to be offered to its Clients pursuant to exemptions from the prospectus requirement.

12. Where appropriate, the Manager proposes to use the proceeds of termination from the NSC Funds to invest its Clients' assets in securities of the NSPC Pooled Funds.

13. In order to create the NSPC Pooled Funds, the Manager will have to draft the organizational documents, negotiate agreements with third party service providers, including a custodian and sub-advisors and obtain the approval of the Commission to act as trustee of the NSPC Pooled Funds.

14. In addition, the Manager will need to apply for exemptive relief from the Commission to permit its non-accredited investor Clients who are related to its accredited investor Clients to invest less than $150,000 in securities of the NSPC Pooled Funds (the "Managed Account Relief").

15. The Manager has concluded that it would not be in the best interests of its Clients to wind-up the NSC Funds until such time as its Clients are able to invest in the NSPC Pooled Funds.

16. The Manager has further determined that it would not be in the best interests of its Clients to move certain Clients out of the NSC Funds prior to windup, as this might result in one Client being treated more favourably than another Client, could result in the NSC Funds losing mutual fund trust status and would result in a less orderly liquidation of portfolio securities in the NSC Funds.

17. The Manager would not be in a position to wind-up the NSC Funds until it has:

(a) obtained the Managed Account Relief; and

(b) provided at least 60 days' advance notice to investors of its intention to terminate the NSC Funds.

18. It is unlikely that the Manager will be in a position to wind-up the NSC Funds by the May 1, 2007 deadline to appoint an IRC.

19. The Manager will communicate with each affected Client to explain the intended termination of the NSC Funds and to explain its intention to invest the Client's assets (where appropriate) in securities of the NSPC Pooled Funds.

20. Prior to May 1, 2007, the Manager will send a notice to each investor in the NSC Funds, informing the Client of the Manager's intention to wind-up the NSC Funds and of the fact that the Manager will not be appointing an IRC by May 1, 2007.


The Requested Relief is granted so long as the NSC Funds terminate no later than October 1, 2007.

"Leslie Byberg"
Manager -- Investment Funds