TD Asset Management Inc. and TD World Bond Pool - MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications -- Exemption from section 2.1(1) of National Instrument 81-102 Mutual Funds to permit mutual funds to investment more than 10 percent of net assets in debt securities issued by a foreign government or supranational agency -- mutual funds include global bond fund.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 2.1(1), 19.1.

November 30, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,

MANITOBA, ONTARIO, QUEBEC, NEW BRUNSWICK,

NOVA SCOTIA, PRINCE EDWARD ISLAND,

NEWFOUNDLAND AND LABRADOR, NORTHWEST

TERRITORIES, YUKON AND NUNAVUT

(the "Jurisdictions")

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

TD ASSET MANAGEMENT INC.

("TDAM")

AND

TD WORLD BOND POOL

(the "Fund")

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the "Decision Maker") in each of the Jurisdictions has received an application (the "Application") from TDAM on behalf of the Fund for a decision under the securities legislation of the Jurisdictions (the "Legislation") for an exemption pursuant to Section 19.1 of National Instrument 81-102 - Mutual Funds ("NI 81-102") from subsection 2.1(1) of NI 81-102 (the "Concentration Restriction") to permit the Fund to invest up to:

1. 20 percent of its net assets, taken at market value at the time of purchase, in evidences of indebtedness of any one issuer if those evidences of indebtedness are issued, or guaranteed fully as to principal and interest, by supranational agencies or governments other than the government of Canada, the government of a province or territory of Canada or the government of the United States of America and are rated "AA" by Standard & Poor's, or have an equivalent rating by one or more other approved credit rating organizations; and

2. 35 percent of its net assets, taken at market value at the time of purchase, in evidences of indebtedness of any one issuer if those evidences of indebtedness are issued, or guaranteed fully as to principal and interest, by supranational agencies or governments other than the government of Canada, the government of a province or territory of Canada or the government of the United States of America and are rated "AAA" by Standard & Poor's, or have an equivalent rating by one or more other approved credit rating organizations (collectively, the "Requested Relief").

Under the Mutual Reliance Review System for Exemptive Relief Applications:

(a) the Ontario Securities Commission ("OSC") 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 TDAM:

1. TDAM is registered with all the provincial and territorial securities regulators as an investment counselor and portfolio manager or their equivalents, registered as a limited market dealer with the OSC and the Securities Commission of Newfoundland and Labrador, and registered as a commodity trading manager with the OSC.

2. TDAM is the trustee, manager and portfolio adviser of the Fund.

3. The Fund is a mutual fund that is subject to NI 81-102 and is a reporting issuer in each of the Jurisdictions.

4. The investment objective of the Fund is to seek to earn interest income by investing primarily in, or gaining exposure to, fixed income securities of issuers from anywhere in the world.

5. The Fund invests primarily in fixed-income securities of governments, government agencies, supranational organizations or companies located anywhere in the world. In addition to investment-grade debt securities, the portfolio adviser may also invest in non-investment-grade debt securities and/or emerging market debt.

6. As a result of the Concentration Restriction, the Fund is restricted from purchasing a security of an issuer or entering into a specified derivatives transaction if, immediately after the transaction, more than 10 percent of the net assets of the Fund would be invested in securities of any issuer.

7. The Concentration Restriction does not apply to a purchase of a "government security", which, under NI 81-102, means an evidence of indebtedness issued, or fully and unconditionally guaranteed as to principal and interest, by any of the government of Canada, the government of a Jurisdiction or the government of the United States of America.

8. In some jurisdictions, the securities of the government are the predominant liquid or rated debt available. Accordingly, government securities in such jurisdictions are the Fund's strongly favoured means to gain exposure to those jurisdictions.

9. The increased maximum thresholds help reduce transaction costs and increase the speed of obtaining desired investment exposure for the Fund.

10. The Requested Relief will enable the Fund to better achieve its investment objectives of earning interest income by investing primarily in, or gaining exposure to, fixed income securities of issuers from anywhere in the world.

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 Requested Relief is granted provided that:

(1) paragraphs (a) and (b) of the Requested Relief cannot be combined for any one issuer;

(2) the securities that are purchased pursuant to this Decision are traded on a mature and liquid market;

(3) the acquisition of the securities purchased pursuant to this Decision is consistent with the fundamental investment objective of the Fund;

(4) the simplified prospectus of the Fund discloses the additional risks associated with the concentration of the net assets of the Fund in securities of fewer issuers, such as the potential additional exposure to the risk of default of the issuer in which the Fund has so invested and the risks, including foreign exchange risks, of investing in the country in which that issuer is located; and

(5) the simplified prospectus of the Fund discloses, in the investment strategy section, the details of the Requested Relief above along with the conditions imposed and the type of securities covered by this Decision.