Omega Advisors U.S. Capital Appreciation Fund and Artemis Investment Management Limited

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Fund and its investment fund manager exempted from the dealer registration requirement for certain limited trading activities to be carried out by these parties in connection with offering of warrants by the fund -- The limited trading activities involve: (i) the forwarding of a short form prospectus, and the distribution of warrants to acquire securities of the fund, to existing holders of securities of the fund, and (ii) the subsequent distribution of securities to holders of these warrants, upon the holders' exercise of the warrants, through an appropriately registered dealer.

Applicable Legislative Provisions

Securities Act, R.S.O.1990, c. S.5, as am., ss. 25(1), 74(1).

Multilateral Instrument 11-102 Passport System, s. 4.7(1).

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 8.5.

National Instrument 45-106 Prospectus and Registration Exemptions, ss. 3.1, 3.42.

April 17, 2012

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

OMEGA ADVISORS U.S. CAPITAL

APPRECIATION FUND (the Fund), AND

ARTEMIS INVESTMENT MANAGEMENT LIMITED

(the Manager) (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) exempting the Filers from the dealer registration requirement in the Legislation in respect of certain trades (the Warrant Offering Activities) to be carried out by the Manager, on behalf of the Fund, in connection with a proposed distribution (the Warrant Offering) of class A warrants (Warrants) to acquire class A units (Units) of the Fund, to be made pursuant to a short-form (final) prospectus (the Warrant Prospectus) (such exemption from the dealer registration requirement, the Exemption Sought).

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

1. the Ontario Securities Commission is the principal regulator for this application; and

2. each 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 by the Filer in British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (collectively, the Passport Jurisdictions).

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:

1. The Fund is a trust established by declaration of trust under the laws of the province of Ontario.

2. The Filers are not in default of securities legislation in any jurisdiction.

3. The Manager provides administrative services for the Fund. The Manager is registered with the Ontario Securities Commission under the Securities Act (Ontario) in the category of investment fund manager.

4. The head office of each of the Filers is located at 5 Hazelton Avenue, Suite 200, Toronto, Ontario, M5R 2E1, Canada.

5. The Fund is not considered to be a mutual fund under securities legislation of the provinces of Canada.

6. The Fund is authorized to issue an unlimited number of Units, each of which represents an equal undivided interest in the net assets of the Fund. The Units are listed for trading on the Toronto Stock Exchange.

7. The Fund is authorized to issue an unlimited number of Warrants to subscribe for Units.

8. The Fund filed a final prospectus dated February 25, 2011 for the initial issuance of the combined class A units, each combined class A unit consisting of one warrant to purchase one class A unit, and one class A unit (Combined Units). Pursuant to the prospectus, the Fund issued 2,740,000 Combined Units. As at the date hereof, there are no warrants currently issued and outstanding.

9. The Fund's initial public offering was conducted through the full service investment dealer channel and its Units were issued through and are held in the book based system of CDS Clearing and Depository Services Inc.

10. The Fund is subject to certain investment restrictions that, among other things, limit the securities that the Fund may acquire for its investment portfolio.

11. The investment objective of the Fund is to provide holders of Units with above average capital growth through investments in primarily U.S. securities and other instruments.

12. The Fund's investment portfolio consists of primarily U.S. securities and other instruments, including equities, equity related securities, bonds and other fixed income securities, derivative instruments, currencies and commodities.

13. The Fund does not engage in the continuous distribution of its securities.

14. In connection with the Warrant Offering, the Fund filed a preliminary short form prospectus dated March 30, 2012 under the securities legislation of Ontario and each of the Passport Jurisdictions. A receipt was issued for the prospectus dated April 2, 2012. Under the Warrant Offering, each holder of Units, as at a specified record date, will be entitled to receive, for no consideration, one Warrant for every one Unit held by such holder.

15. Holders of Warrants will be entitled, upon the exercise of such Warrants, to subscribe for Units, pursuant to subscription privileges provided for in the Warrants, at a subscription price to be specified in the Warrant Prospectus. Each Warrant will entitle the holder to subscribe for one Unit under a basic subscription privilege. The term for the exercise of Warrants (including both the basic subscription privilege and the additional subscription privilege) will not exceed six months.

16. The Fund has applied to list the Warrants to be distributed under the Warrant Prospectus on the Toronto Stock Exchange.

17. The Warrant Offering Activities will consist of:

a. the distribution of the Warrant Prospectus and the issuance of Warrants to the holders of Units (as at the record date specified in the Warrant Prospectus), after the Warrant Prospectus has been filed, and receipts obtained, under the securities legislation of Ontario and each of the Passport Jurisdictions; and

b. the distribution of Units to holders of Warrants, upon the exercise of such Warrants by the holder, through a registered dealer that is registered in a category that permits the registered dealer to make such distribution.

18. Because each of the Filers is in the business of trading the Warrant Offering Activities require each of the Filers to register as a dealer in the appropriate category in the absence of this decision (or another available exemption from the dealer registration requirement).

19. Section 8.5 of National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) provides that, after March 26, 2010, the exemptions from the dealer registration requirements set out in section 3.1 [Rights offering] and section 3.42 [Conversion, exchange, or exercise] of NI 45-106 no longer apply.

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 Exemption Sought is granted.