Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions - Approval of fund merger pursuant to an amalgamation under paragraph 5.5(1)(b) of NI 81-102 - Approval required because mergers do not meet all criteria for pre-approval outlined in section 5.6 of NI 81-102 - Current simplified prospectus and financial statements of continuing funds not delivered to shareholders of corresponding existing funds because continuing funds will be new funds and will not have their own performance data - Continuing funds will have the same investment objectives, investment strategies, management fees, portfolio investment manager, and, at the effective date of the amalgamation, the same portfolio assets as the existing funds - Portfolio assets of existing funds to continue as portfolio assets referable to continuing funds upon amalgamation - Amalgamation may not technically constitute a wind-up of the existing funds - Proxy circular includes disclosure about the amalgamation and prospectus-like disclosure concerning the continuing funds.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 5.5(1)(b), 5.6(1)(c) and 5.6(1)(f)(ii).

March 17, 2010

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

AGF INVESTMENTS INC. (the Manager),

AGF ALL WORLD TAX ADVANTAGE GROUP LIMITED (AWTAG),

AGF CANADIAN GROWTH EQUITY FUND LIMITED (AGF Growth), AND

AGF CANADIAN RESOURCES FUND LIMITED (AGF Resources)

(collectively, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for approval of the proposed merger by way of amalgamation of AGF Growth and AGF Resources into AWTAG to be effective on or about October 1, 2010 (the Amalgamation) pursuant to clause 5.5(1)(b) of National Instrument 81-102 -- Mutual Funds (NI 81-102) (the Merger Approval).

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

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

(b) the Filers have provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, The Northwest Territories, Yukon and Nunavut.

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 Filers:

The Filers

1. The head office of each of the Filers is located in Toronto, Ontario. The Filers are not in default of securities legislation in any jurisdiction of Canada.

2. The Manager, a corporation incorporated under the laws of Ontario, is the manager of AGF Growth, AGF Resources and all of the classes of AWTAG.

3. Each of AWTAG, AGF Growth and AGF Resources (collectively, the Corporations) is a mutual fund corporation incorporated under the laws of Ontario. Each of AGF Growth and AGF Resources offer only one class of shares. AWTAG offers currently 20 classes of shares. Each class of shares is issuable in more than one series.

4. All of the directors and officers of the Corporations are the same.

5. Each of the Corporations is a reporting issuer as defined in the securities legislation of each province and territory of Canada, operates in accordance with NI 81-102, and distributes its shares to the public pursuant to a simplified prospectus (SP) and annual information form (AIF).

6. For securities law purposes, each mutual fund is a separate share class.

The Amalgamation

7. Subject to shareholder and regulatory approval, AGF Growth and AGF Resources will amalgamate with AWTAG and continue as one corporation known as AGF All World Tax Advantage Group Limited (Amalco).

8. The Amalgamation will be effected pursuant to an amalgamation agreement (the Amalgamation Agreement) entered into between the Corporations as contemplated by section 174 of the Business Corporations Act (Ontario) (OBCA).

9. Pursuant to the Amalgamation, each existing class and series of AWTAG will be an identical class with identical series, identical assets referable to such class and series, identical portfolio managers, identical fees and identical net asset values per class and per series in Amalco.

10. Pursuant to the Amalgamation, shareholders of AGF Growth and AGF Resources (collectively, the Existing Funds) will become shareholders of two new classes of Amalco to be known as AGF Canadian Growth Equity Class and AGF Canadian Resources Class (collectively, the Continuing Funds). The Existing Funds and the corresponding Continuing Funds will be substantially similar, with the Continuing Funds having the same investment objectives, investment strategies, management fees, portfolio investment manager, and, at the effective date of the Amalgamation, the same portfolio assets as the Existing Funds.

11. Upon the Amalgamation, the portfolio assets of the Existing Funds will continue as portfolio assets referable to the Continuing Funds. The portfolio assets of the Continuing Funds will be maintained as a separate portfolio by Amalco for the exclusive benefit of the shareholders of the Continuing Funds, as they are for the other classes of Amalco.

12. Upon the Amalgamation, the portfolio assets referable to each series of shares of the Existing Funds will become referable to a corresponding series of shares of the Continuing Funds (each such series, a Replacement Series). The rights associated with each series will be identical in all respects to the rights formerly associated with the corresponding series of shares of the Existing Funds. Upon the Amalgamation, for each share they held of an Existing Fund, shareholders will receive a share of the Replacement Series. The net asset value (NAV) of each such share of the Replacement Series will be equal to the NAV per share of the corresponding series of shares of the Existing Fund.

13. The Continuing Funds will be new funds and will not have any assets or liabilities and will not have their own performance data or information derived from financial statements as at the Effective Date.

14. As a result, the Amalgamation is not a merger of mutual funds as it is commonly understood since the Existing Funds will not terminate under the OBCA but will continue with the other classes of AWTAG as one corporation while remaining separate classes (funds) from other existing classes.

15. The Amalgamation will be a tax-deferred transaction under subsection 87(1) of the Income Tax Act (Canada).

16. As a result of the Amalgamation, investors in the Continuing Funds will be provided with a choice of mutual funds into which they may switch their investments on a tax-deferred basis which they cannot currently do as standalone corporations.

17. Immediately prior to the Amalgamation, an amendment to AWTAG's SP and AIF will be filed relating to the Amalgamation and the new AGF Canadian Growth Equity Class and AGF Canadian Resources Class.

18. Each of the Corporations will hold special meetings of shareholders on April 13, 2010 to seek to obtain the required approval for the Amalgamation. Subject to necessary shareholder and regulatory approval, the Filers intend to effect the Amalgamation on or about October 1, 2010 (the Effective Date).

19. Shareholders of the Existing Funds will continue to have the right to redeem securities of the Existing Funds for cash at any time up to the close of business on the day prior to the Effective Date.

20. Shareholders of the Corporations are permitted to dissent from the Amalgamation pursuant to the provisions of the OBCA.

21. The proxy circular (the Circular) includes disclosure about the Amalgamation and prospectus-like disclosure concerning the Continuing Funds and the shares to be issued under the Amalgamation Agreement, including information regarding fees, expenses, investment objective, investment strategy, valuation procedures, the manager, the investment manager, redemptions, income tax considerations, dividend policy and net asset value. The Circular also discloses that shareholders can obtain the most recent financial statements that have been made public reflecting the portfolio assets of the Existing Funds from the Manager upon request or on SEDAR at www.sedar.com.

22. The costs of the Amalgamation will be paid for by the Manager.

23. Pursuant to NI 81-107 Independent Review Committee for Investment Funds, the independent review committee has reviewed the Amalgamation on behalf of the Corporations and the process to be followed in connection with the Amalgamation, and has advised the Manager that in the independent review committee's opinion, having reviewed the Amalgamation as a potential conflict of interest, following the process proposed, the Amalgamation achieves a fair and reasonable result for each of the Corporations.

24. The Filers require approval of the Amalgamation and cannot rely on section 5.6(1) of NI 81-102 for the following reasons:

(i) The materials sent to shareholders of the Existing Funds will not include a copy of the current simplified prospectus of the Continuing Funds or a copy of the financial statements of the Continuing Funds; and

(ii) A statutory amalgamation may not technically constitute a wind-up of the Existing Funds.

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 Merger Approval is granted.

"Rhonda Goldberg"
Manager, Investment Funds Branch
Ontario Securities Commission