Securities Law & Instruments

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- approval granted for change of control of manager of a mutual fund -- relief granted from the requirement that notice of change of control of the manager of a mutual fund be given to the securityholders of the mutual fund at least 60 days before the change so long as notice is given expeditiously after access to the mailing list is obtained and no changes are made in the 60 days following the notice date -- manager is an indirect subsidiary of a take-over target for which there are competing bids.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(2), 5.8(1)(a).

September 21 , 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUÉBEC, NOVA SCOTIA,

NEW BRUNSWICK, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR, YUKON

TERRITORY, NORTHWEST TERRITORIES

AND NUNAVUT

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

ABN AMRO GLOBAL EQUITY EXPOSURE FUND

ABN AMRO ASSET MANAGEMENT CANADA LIMITED

AND

RFS HOLDINGS B.V.

 

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from RFS Holdings B.V. (the Filer) for a decision under the securities legislation of the Jurisdictions (the Legislation) for:

(a) approval of the change of control of ABN AMRO Asset Management Canada Limited (the Manager), the manager, trustee and portfolio advisor of the ABN AMRO Global Equity Exposure Fund (the Fund), in accordance with subsection 5.5(2) of National Instrument 81-102 Mutual Funds (NI 81-102); and

(b) relief from the requirement in paragraph 5.8(1)(a) of NI 81-102 (the Notice Requirement) that notice of the indirect change of control (the Change of Control Notice) of the Manager be given to the securityholders of the Fund (the Unitholders) at least 60 days before Closing (as defined below).

Under the Mutual Reliance Review System for Exemptive Relief Applications (MRRS):

(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.

Representations

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

1. The Royal Bank of Scotland Group plc (RBS), Fortis N.V. / Fortis SA/NV (Fortis) and Banco Santander, S.A. (formerly named Banco Santander Central Hispano, S.A.) (Santander) have formed a consortium (the Consortium) with respect to the offer (the Offer) for all of the issued and to be issued ordinary shares, and all of the issued and to be issued American depository shares, of ABN AMRO Holding N.V. (ABN AMRO).

2. RBS, which has its headquarters in the United Kingdom (UK), is a leading provider of banking services and integrated financial solutions in the UK, Europe, the United States and Asia Pacific. RBS is one of the world's top 10 financial services groups with a market capitalization at December 31, 2006 equal to £62.8 billion, a staff of approximately 135,000 and an operating profit of £9.4 billion.

3. Fortis, which has its headquarters in Belgium and The Netherlands, is an international financial services provider engaged in banking and insurance. Fortis ranks among the twenty largest financial institutions in Europe and at December 31, 2006 had a market capitalization of 42.1 billion and a staff of approximately 57,000.

4. Santander, which has its headquarters in Spain, is a financial group operating principally in Spain, the UK, Portugal, Germany, Italy and Latin America. Santander offers clients a wide range of financial products and at December 31, 2006 was one of the twelve largest banking groups in the world by market capitalization and the largest group in the Euro zone with a stock capitalization of 88.4 billion, stockholder's equity of 44.9 billion and total assets of 833.9 billion. Santander also had an additional €167.1 billion in mutual funds, pension funds and other assets under management as at December 31, 2006 with a staff of approximately 130,000.

5. ABN AMRO is the holding company of an international banking group ranked eighth in Europe and thirteenth in the world based on total assets, with more than 4,500 branches in 53 countries and a staff of more than 105,000 full-time equivalents. ABN AMRO is not a reporting issuer in any jurisdiction of Canada.

6. The Offer, launched on July 20, 2007, is made through a newly incorporated acquisition vehicle, the Filer. The Consortium is offering, subject to a number of pre-conditions and conditions, 35.60 in cash plus 0.296 new RBS shares for each ABN AMRO share. The tender offer period commenced on July 23, 2007 and, if not extended, is expected to end on October 5, 2007.

7. On the Offer being declared unconditional, RBS, Fortis and Santander will own 38.3%, 33.8% and 27.9%, respectively, of the issued shares of the Filer.

8. The Manager is an indirect, wholly-owned subsidiary of ABN AMRO. The Manager is a corporation incorporated under the laws of Canada and maintains its principal office in Toronto, Ontario. As stated, the Manager is the manager, trustee, portfolio manager and distributor of the Fund.

9. The Fund is an open-end mutual fund trust established under the laws of Ontario pursuant to a declaration of trust dated February 4, 2005. Units of the Fund are currently offered to the public in each of the Jurisdictions pursuant to a simplified prospectus and annual information form, in both English and French languages, each dated February 12, 2007.

10. It is not expected that the indirect acquisition of the Manager by the Filer will initially result in any significant changes to the management or administration of the Fund. The Manager will still be the manager, trustee, portfolio advisor and principal distributor of the Fund and the fundamental investment objective of the Fund will still be the same.

11. It is not expected that the indirect acquisition of the Manager by the Filer will immediately result in any significant changes to the management structure of the Manager. The Manager will initially continue to operate as a separate distinct business unit, substantially in the same manner as it is operated today with substantially the same personnel.

12. Each of the Consortium members is a well recognized and well established financial institution with adequate depth and personnel to ensure that, if the Offer is successful, the Manager will initially continue to operate in substantially the same manner as it operates today, and that the Fund and the Unitholders will not be adversely affected as a result of the acquisition of ABN AMRO by the Filer.

13. If the Offer is successful, completion of the acquisition of ABN AMRO by the Filer will constitute an indirect change of control of the Manager for purposes of subsection 5.5(2) of NI 81-102.

14. It is currently expected that completion of the Offer will be achieved in the fourth quarter of 2007 (the Closing).

15. At the present time, it is unclear whether ABN AMRO will support the Offer and whether ABN AMRO and the Manager will cooperate with the Filer in connection with the matters described herein immediately following the Offer becoming wholly unconditional and complete.

16. In order to comply with the Notice Requirement, the Filer requires access (Mailing List Access) to the names and address of all Unitholders (Mailing List). The Filer does not currently have access to, and has no right to compel, ABN AMRO to provide the Mailing List. Accordingly, Filer is not able to comply with the Notice Requirement.

17. The Filer intends to mail the Change of Control Notice to the Unitholders expeditiously after the Filer obtains Mailing List Access. It is not expected that Mailing List Access will occur until after Closing. As a result, the date of mailing the notice of the indirect change of control of the Manager (the Notice Date) may not occur until after Closing.

18. No changes will be made to the portfolio management operations of the Fund during the 60 day period following the Notice Date.

19. At the present time, the members of the Consortium have not determined who will ultimately indirectly acquire the Manager and management of the Fund. The applicable Consortium member will notify the Decision Makers in due course once this determination has been made.

20. There is another bidder with a competing offer for the shares of ABN AMRO.

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, if the Offer is successful:

(a) the change of control of the Manager by the Filer is approved pursuant to section 5.5(2) of NI 81-102; and

(b) an exemption from the Notice Requirement is granted provided that the Change of Control Notice is given expeditiously after the Filer obtains Mailing List Access and no changes will be made to the portfolio management operations of the Fund during the 60 day period following the Notice Date.

"Leslie Byberg"
Manager, Investment Funds Branch
Ontario Securities Commission