Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- NI 41-101 -- Relief to file a prospectus more than 90 days after the date of the receipt for the preliminary prospectus.

Applicable Legislative Provisions

National Instrument 41-101 General Prospectus Requirements, ss. 2.3(1), 19.1,19.3.

November 3, 2009

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

AHL INVESTMENT STRATEGIES SPC --

CLASS D MAN AHL DIVERSIFIED 2 CAD NOTES

(the "Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for exemptive relief:

(1) pursuant to section 19.1 of National Instrument 41-101 -- General Prospectus Requirements ("NI 41-101") from the requirements under subsection 4.2(2) of NI 41-101 and Item 38 of Form 41-101F2 Information Required in an Investment Fund Prospectus to permit:

(a) the Filer to include financial statements prepared using International Financial Reporting Standards ("IFRS"), rather than Canadian generally accepted accounting principles ("GAAP"), in the final prospectus (the "Final Prospectus") of the Filer to be filed in each of the Jurisdictions; and

(b) the Filer to use International Standards on Auditing ("ISA"), rather than Canadian generally accepted auditing standards ("GAAS"), in auditing the Filer's annual financial statements included in the Final Prospectus;

(2) pursuant to section 17.1 of National Instrument 81-106 -- Investment Fund Continuous Disclosure ("NI 81-106") from the requirements under:

(a) section 2.6 of NI 81-106, to permit the financial statements of the Filer to be prepared in accordance with IFRS, rather than Canadian GAAP; and

(b) section 2.7 of NI 81-106, to permit the financial statements of the Filer that are required to be audited to be audited in accordance with ISA, rather than Canadian GAAS; and

(collectively, the "Accounting and Audit Relief")

(3) pursuant to section 10.1 of National Instrument 81-104 Commodity Pools ("NI 81-104") for a decision that the Filer be exempted from the requirements under subsection 3.2(2)(a) of NI 81-104, which requires a commodity pool to have invested in it at all times securities that were issued pursuant to subsection 3.2(1)(a) of NI 81-104 and had an aggregate issue price of $50,000 (the "Seed Capital Relief").

(the Accounting and Audit Relief and the Seed Capital Relief are collectively referred to herein as, the "Requested Relief")

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application),

(a) the Ontario Securities Commission (the "Commission") is the principal regulator for this application; and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in Québec.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer is a segregated portfolio established by AHL Investment Strategies SPC (the "AHL SPC"), an exempted company incorporated with limited liability in the Cayman Islands and registered as a segregated portfolio company under the Companies Law (2007 Revision).

2. Pursuant to the Articles of Association of the AHL SPC, each segregated portfolio of the AHL SPC may issue separate classes of notes, the value of which will depend on the value of the separate segregated portfolio. Each segregated portfolio will have its own investment objective and investment strategy.

3. The AHL SPC established and will maintain the Filer as a segregated portfolio that proposes to issue a series of Canadian dollar denominated redeemable Class D Man AHL Diversified 2 CAD notes (the "Notes") that will constitute unsubordinated and unsecured obligations of the Filer, the value of which will depend on the performance of the Filer.

4. The Filer's investment objective is to provide investors with the opportunity to realize capital appreciation through investment returns that have a low correlation to traditional forms of stock and bond securities.

5. To pursue its investment objective, the Filer will invest the proceeds of any offering of Notes in a diversified portfolio of financial instruments across a range of global markets including, without limitation, stocks, bonds, currencies, short-term interest rates, energy, metals and agricultural commodities using a predominantly trend-following trading program that employs futures, options, forward contracts, swaps and other financial derivative instruments.

6. Man Investments Limited (the "Investment Manager") will serve as the investment manager of the Filer pursuant to an investment management agreement (the "Investment Management Agreement"), which requires the Investment Manager to comply with all applicable laws with respect to the conduct of the Investment Manager's business and the provision of services under the Investment Management Agreement.

7. In its capacity as investment manager of the Filer, the Investment Manager will provide investment advisory and portfolio management services in respect of the assets of the Filer.

8. The Investment Manager is a company incorporated in England and Wales with limited liability (No. 2093429) whose registered address is Sugar Quay, Lower Thames Street, London EC3R 6DU, and is regulated in the conduct of regulated activities in the United Kingdom by the Financial Services Authority of the United Kingdom.

9. The Filer is a commodity pool as such term is defined in section 1.1 of NI 81-104, in that the Filer has adopted fundamental investment objectives that permit the Filer to use or invest in specified derivatives in a manner that is not permitted under National Instrument 81-102 -- Mutual Funds ("NI 81-102"). The Filer will be subject to the investment restrictions contained in applicable Canadian securities legislation, including NI 81-102, and the assets of the Filer will be managed in accordance with these restrictions, except as otherwise permitted by NI 81-104.

10. The Filer has filed a non-offering Preliminary Prospectus dated July 16, 2009 with the securities regulatory authorities in Ontario and Québec, a receipt for which was issued by the Commission and the Autorité des marchés financiers on July 16, 2009.

11. Once the Filer obtains a receipt for the Final Prospectus from the Commission and the Autorité des marchés financiers, pursuant to which it will become a reporting issuer under the Securities Act (Ontario) and the Securities Act (Québec), the financial statements and other reports required to be prepared and filed by the Filer will be provided to holders of Notes (the "Noteholders") and available through SEDAR.

12. The AHL SPC and each of its segregated portfolios prepare their financial statements in accordance with IFRS and have their financial statements audited in accordance with ISA, which are accepted under the relevant legal and regulatory requirements of the Cayman Islands. It is intended that the financial statements of the Filer will be prepared in accordance with IFRS and audited in accordance with ISA.

13. Ernst & Young LLP, Chartered Accountants, Cayman Islands ("E&Y Cayman") audits the financial statements of the AHL SPC and each of its segregated portfolios in accordance with ISA. It is intended that E&Y Cayman will audit the financial statements of the Filer in accordance with ISA.

14. E&Y Cayman is registered with the Canadian Public Accountability Board.

15. The Preliminary Prospectus discloses, and the Final Prospectus will disclose, the Filer's intention that the financial statements of the Filer will be prepared in accordance with IFRS and audited in accordance with ISA as contemplated.

16. The Preliminary Prospectus is, and the Final Prospectus will be, a non-offering prospectus and no securities will be offered thereunder. The Notes will be offered from time to time to investors that are resident outside of Canada.

17. The Filer and its directors or officers irrevocably and unconditionally submit to the non-exclusive jurisdiction of the judicial, quasi-judicial, and administrative tribunals of the Jurisdictions and any administrative proceedings in any such Jurisdiction, in any proceedings arising out of or related to or concerning the conditions and representations of the decision in connection with the Requested Relief or its activities as a reporting issuer.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

(a) in respect of the Accounting and Audit Relief,

(i) the financial statements of the Filer for the Final Prospectus and the annual financial statements for subsequent financial periods will be prepared in accordance with IFRS and audited in accordance with ISA as contemplated;

(ii) the interim financial statements of the Filer for subsequent financial periods will be prepared in accordance with IFRS as contemplated; and

(iii) the Filer provides the disclosure set out in paragraph 15; and

(b) in respect of the Seed Capital Relief,

(i) the Investment Manager may not redeem any of its initial investment of $50,000 in the Filer until $5.0 million has been received by the Filer from persons or companies other than the persons and companies referred to in subsection 3.2(l)(a) of NI 81-104;

(ii) the basis on which the Investment Manager may redeem any of its initial investment of $50,000 from the Filer is disclosed in the Preliminary Prospectus and will be disclosed in the Final Prospectus;

(iii) if, after the Investment Manager redeems its initial investment of $50,000 in the Filer in accordance with condition (b)(i) above, the value of the Notes subscribed for by investors other than the persons and companies referred to in subsection 3.2(l)(a) of NI 81-104 drops below $5.0 million for more than 30 consecutive days, the Investment Manager will, unless the Filer is in the process of being dissolved or terminated, invest $50,000 in the Filer and maintain that investment until condition (b)(i) is again satisfied; and

(iv) the Investment Manager will at all times maintain excess working capital of a minimum of $100,000.

"Darren McKall"
Assistant Manager, Investment Funds
Ontario Securities Commission