APMEX Precious Metals Management Services, Inc. and APMEX Physical -- 1 oz. Gold Redeemable Trust

Decision

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Exemptive relief granted to exchange traded mutual fund from 10% limit on purchases of gold to permit fund with primary investment objective to invest in gold coins -National Instrument 81-102 Mutual Funds.

Applicable Legislative Provisions

National Instrument 81-102 Mutual Funds, ss. 2.3(e), 2.3(f) and 19.1.

June 1, 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

APMEX PRECIOUS METALS MANAGEMENT

SERVICES, INC.

(the Manager)

AND

IN THE MATTER OF

APMEX PHYSICAL -- 1 OZ. GOLD

REDEEMABLE TRUST

(the Trust)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Manager, in its capacity as the manager of the Trust, for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from Subsections 2.3(e) and (f) of National Instrument 81-102 -- Mutual Funds (NI 81-102), to permit the Trust to invest up to 100% of its net assets, taken at market value at the time of purchase, in 1 oz. American Gold Eagle bullion coins, 1 oz. Canadian Gold Maple Leaf bullion coins, and/or 1 oz. gold bullion bars and rounds (collectively, the Gold Coins) (collectively, the Exemption Sought).

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 (the Principal Regulator); and

(b) the Manager has provided notice that subsection 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, Québec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.

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 herein.

In this decision, the "total net assets" of the Trust means the net asset value of the Trust determined in accordance with Part 14 of National Instrument 81-106 -- Investment Fund Continuous Disclosure.

Representations

This decision is based on the following facts represented by the Manager and the Trust:

The Manager and the Trust

1. The Manager is a corporation formed and organized under the laws of the State of Delaware pursuant to Articles of Incorporation dated December 21, 2010 and maintains its head office in Oklahoma City, Oklahoma. The Manager is wholly owned by American Precious Metals Exchange, Inc.

2. The Trust is a mutual fund trust established under the laws of the Province of Ontario pursuant to a trust agreement dated as of March 10, 2011, as amended and restated (the Trust Agreement), as the same may be further amended, restated or supplemented from time to time. Pursuant to the Trust Agreement, Computershare Trust Company of Canada (the Trustee) acts as the trustee. Pursuant to a management agreement dated as of March 10, 2011, as amended and restated, the Manager acts as the manager of the Trust.

3. Computershare Investor Services Inc. (the Registrar and Transfer Agent) will be the registrar and transfer agent of the Trust pursuant to a transfer agent, registrar and disbursing agent agreement to be entered into on or about the filing of the (final) prospectus of the Trust (the Final Prospectus).

4. RBC Dexia Investor Services Trust (the Trust Custodian) will act as the custodian of the Trust pursuant to a custodian agreement. The Trust will store the Gold Coins with The Bank of Nova Scotia (the Gold Custodian) acting in its capacity as the sub-custodian appointed by the Trust Custodian pursuant to a sub-custodian agreement. The Trust will store Gold Coins with a value equal to at least 60% of the value of the net assets of the Trust at all times in Canada, with the remainder to be stored in the United States.

5. The Trust has filed a registration statement on Form F-1 (the Registration Statement) under the U.S. Securities Act of 1933, as amended, with the United States Securities and Exchange Commission (the SEC) in connection with the initial public offering (the Offering) of transferable, redeemable units of the Trust (the Units) in the United States.

6. In connection with the Offering of the Units, a preliminary long form prospectus (the Preliminary Prospectus) has been filed with the securities regulatory authorities in each province of Canada (the Canadian Jurisdictions) and the Trust intends to become a reporting issuer, or the equivalent thereof in such Canadian Jurisdictions following the filing of its final prospectus (the Final Prospectus).

7. The Trust intends to list the Units on the Toronto Stock Exchange (TSX) and the New York Stock Exchange Arca (NYSE Arca). The Trust will not file the Final Prospectus until the TSX and the NYSE Arca have conditionally approved the listing of the Units.

8. The Trust is a "mutual fund in Ontario" as such term is defined in the Securities Act (Ontario) and is subject to the investment restrictions applicable to mutual funds which are prescribed by NI 81-102. The Manager will establish an independent review committee for the Trust in accordance with the requirements under National Instrument 81-107 Independent Review Committee for Investment Funds.

9. The Trust is not required to register as an "investment company" as such term is defined in the U.S. Investment Company Act of 1940, as amended (the 1940 Act), since the Trust will invest all or substantially all of its assets in Gold Coins.

10. The Manager and the Trust are not in default of securities legislation in any province of Canada.

The Trust's Investment Objective, Strategy, and Investment and Operating Restrictions

11. The Trust was created to invest and hold substantially all of its assets in Gold Coins. The Trust seeks to provide a secure, convenient and exchange-traded investment alternative for investors interested in holding Gold Coins. The Trust intends to invest primarily in long-term holdings of Gold Coins and does not intend to speculate in gold. The Trust does not anticipate making regular cash distributions to unitholders of the Trust (the Unitholders).

12. Except with respect to cash and highly liquid investments that the Trust will hold to pay expenses and anticipated redemptions of Units, the Trust expects to own only Gold Coins. While the investment guidelines permit the Trust to invest up to 20% of its assets in securities other than Gold Coins, the Manager intends to hold approximately 97% of the total net assets of the Trust in Gold Coins. The Trust does not intend to invest in gold certificates or other financial instruments that represent gold or that may be exchanged for gold.

13. The investment and operating restrictions of the Trust provide that, among other things, the Trust will invest in and hold a minimum of 80% of the total net assets of the Trust in Gold Coins and hold no more than 20% of the total net assets of the Trust in cash (such as interest-bearing accounts and short-term certificates of deposit) or any "U.S. Government Security" (except during the 90-day period following the closing of the Trust's initial public offering or additional offerings or prior to the distribution of assets of the Trust, at which times the Trust may hold more than 20% of the total net assets of the Trust in cash (such as interest-bearing accounts and short-term certificates of deposit) and U.S. Government Securities). U.S. Government Securities are direct obligations of or obligations guaranteed as to principal or interest by the United States, or securities issued or guaranteed by corporations in which the United States has a direct or indirect interest which shall have been designated by the Secretary of the Treasury, pursuant to section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities for the purposes of that Act.

14. Since the market value of the Gold Coins is primarily based on the price of 1 oz. of gold, and, further, since all of the Gold Coins of each type are identical and each contain 1 oz. of gold (whereby any trace metals present in such coins do not add any value), the selling price of the coins is virtually identical to the selling price of 1 oz. of gold at any given time. According to data obtained from Bloomberg Finance LP, the correlation of the value of the 1 oz. American Eagle gold bullion coin and the 1 oz. Canadian Gold Maple Leaf coin to the value of 1 oz. of gold from January 2002 to December 2011 is 0.9996 and 0.9993, respectively.

15. The Gold Coins are highly liquid. The market value of each coin is separately recognized on the Bloomberg system as COINGEAG (for the American Eagle gold bullion coin) and COINGCML (for the Canadian Gold Maple Leaf coin). Bloomberg's quotations are based on information provided by the Certified Coin Exchange. The Certified Coin Exchange (www.certifiedcoinexchange.com) is the coin exchange operations of Certified Asset Exchange, Inc, a wholly owned subsidiary of Collectors Universe, Inc., and is an electronic exchange for coins that obtains bid and ask information from its member dealers, of which there are more than 500, that post over 100,000 bid and ask prices on a wide variety of coins, including the 1 oz. American Eagle gold bullion coin and the 1 oz. Canadian Gold Maple Leaf coin, at a given time.

Net Asset Value of the Trust and Redemption of Units

16. The net asset value (the Net Asset Value) of the Trust and the Net Asset Value per Unit will be determined on a daily basis as of 4:00 p.m. (Toronto time) on each business day on which the TSX or the NYSE Arca are open for trading (each such day, a Business Day), by the Trust's valuation agent, which is RBC Dexia Investor Services Trust.

17. Pursuant to the Offering, Units are expected to be offered at a price equal to US$10.00 per Unit. The Trust may not issue additional Units following the completion of the Offering: (i) unless the per Unit Offering price before deducting underwriting fees, commission and offering expenses, will not be less than the Net Asset Value per Unit, as determined at any time within two Business Days prior to the pricing of the Units sold under the Offering; or (ii) except by way of Unit distribution in connection with an income distribution.

18. Subject to the terms of the Trust Agreement and to the right of the Trust to suspend redemptions in certain circumstances, Units may be redeemed at the option of a Unitholder for Gold Coins on a weekly basis. Unitholders whose Units are redeemed for Gold Coins will be entitled to receive a redemption price equal to 100% of the aggregate Net Asset Value per Unit of the redeemed Units determined on the Thursday on which the TSX or the NYSE Arca is open for trading for the week in respect of which the redemption request is processed (the Weekly Redemption Date), less applicable custodian fees, shipping charges and any applicable taxes. Redemption requests must meet the gold redemption minimum, which is currently US$10,000. The redeeming Unitholder will receive the appropriate number of Gold Coins based on the valuation of the Gold Coins as of the valuation date, rounded down to the nearest whole number of such type of Gold Coins, with any excess amount, after a reduction for applicable expenses, returned to the redeeming Unitholder in cash. The redeeming Unitholder will bear the costs associated with the redemption of Units and the costs and risks associated with the delivery of the Gold Coins.

19. Based on instructions from the Trust, the Gold Custodian will release the requisite amount of Gold Coins from its custody to the shipping service provider, which will fully insure the shipment. Any cash to be received by a redeeming Unitholder in connection with a redemption of Units for Gold Coins will be delivered or caused to be delivered by the Trust to the Unitholder's brokerage account within 10 Business Days after the week in which the redemption is processed.

20. Gold Coins received by a Unitholder as a result of a redemption of Units will be delivered by the shipping service provider engaged by the Trust pursuant to delivery instructions provided by the Unitholder.

21. Subject to the terms of the Trust Agreement, Units may also be redeemed at the option of a Unitholder for cash on a monthly basis. Unitholders whose Units are redeemed for cash will be entitled to receive a redemption price per Unit equal to 95% of the lesser of: (i) the volume-weighted average trading price of the Units traded on the NYSE Arca or, if trading has been suspended on the NYSE Arca, the trading price of the Units traded on the TSX, for the last five days on which the respective exchange is open for trading for the month in which the redemption request is processed by the Registrar and Transfer Agent; and (ii) the Net Asset Value per Unit of the redeemed Units on the last day of such month on which the NYSE Arca is open for trading (in each case, less any applicable taxes). Cash redemption proceeds will be transferred to a redeeming Unitholder approximately three Business Days after the end of the month in which such redemption notice is received by the Trust.

22. To redeem Units for cash, a Unitholder must instruct the Unitholder's broker to deliver a notice to redeem Units for cash to the Registrar and Transfer Agent. A redemption notice to redeem Units for cash must be received by the Registrar and Transfer Agent no later than 4:00 p.m. (Toronto time) on the 15th day of the month in which the redemption notice for cash will be processed or, if such day is not a Business Day, then on the immediately following day that is a Business Day. Any redemption notice to redeem Units for cash received after such time will be processed in the next month.

Decision

The Principal Regulator is satisfied that the decision meets the tests 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 provided that the Manager, on behalf of the Trust, ensures that the Final Prospectus of the Trust contains disclosure regarding the unique risks associated with an investment in the Trust, including the risk that direct purchases of Gold Coins by the Trust may generate higher transaction and custody costs than other types of investments, which may impact the performance of the Trust.

" Sonny Randhawa "
Manager, Investment Funds Branch