Wellington Management Company, LLP

Headnote

MI 11-102 -- relief granted from margin rate applicable to U.S. money market mutual funds in calculation of market risk in Form 31-103F1 -- margin rate for funds qualified for distribution in Canada is 5%, while funds qualified for distribution in U.S. is 100% -- similar regulation of money market funds -- NI 31-103.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 12.1, 15.

Multilateral Instrument 11-102 Passport System, s. 4.7.

October 24, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Principal Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

WELLINGTON MANAGEMENT COMPANY, LLP

(the "Filer")

DECISION

Background

The Principal Regulator (as defined below) in the Principal Jurisdiction has received an application from the Filer for a decision under subsection 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103") for relief from the requirement in section 12.1 of NI 31-103 that the Filer calculate its excess working capital using Form 31-103F1 (the "Form F1") only to the extent that the Filer be able to apply the same margin rate to investments in money market mutual funds qualified for sale by prospectus in the United States of America ("U.S.") as is the case for money market mutual funds qualified for sale by prospectus in a province of Canada when calculating market risk pursuant to Line 9 of the Form F1 (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 (the "OSC" or "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 each of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia and Québec (together with Ontario, the "Jurisdictions").

Interpretation

Defined terms contained in NI 31-103 and MI 11-102 have the same meanings in this decision (the "Decision") unless they are otherwise defined in this Decision.

Representations

This Decision is based on the following facts represented by the Filer.

1. The Filer is a limited liability partnership established under the laws of the Commonwealth of Massachusetts in the U.S. with its head office located in Boston, Massachusetts.

2. The Filer operates as an investment adviser in approximately 50 countries and had approximately $720 billion (U.S.) in assets under management as of June 30, 2012 of which $11.4 billion (U.S.) is represented by Canadian clients.

3. The Filer is registered as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer in each of the Jurisdictions.

4. The Filer is also registered in Ontario as a commodity trading manager under the Commodity Futures Act.

5. The Filer is registered with the United States Securities and Exchange Commission as an investment adviser under the United States Investment Advisers Act of 1940, as amended (the "1940 Act").

6. The Filer from time to time invests its cash balances in money market mutual funds qualified for sale by prospectus in the U.S., specifically money market mutual funds which are registered investment companies under the 1940 Act and which comply with Rule 2a-7 thereunder ("Rule 2a-7").

7. Under Schedule 1 of Form F1, an investment in the securities of a money market mutual fund qualified for sale by prospectus only in the U.S. would be subject to a margin rate of 100% of the market value of such investments for the purposes of Line 9 of Form F1. With a margin rate of 100% the Filer may not be able to satisfy the applicable excess working capital requirements.

8. The margin rate required for a money market mutual fund qualified for sale by prospectus in a province of Canada is 5% of the market value of such investment, as opposed to 100% for the market value of investments in a money market mutual fund qualified for sale by prospectus in the U.S.

9. From a cash management perspective, it would not be prudent for the Filer to invest its cash balances directly in U.S. money market instruments instead of investing in money market mutual funds qualified for sale by prospectus in the U.S. and, therefore, be subject to a lower margin rate because of the following reasons:

(i) The Filer would have to invest in a multitude of money market instruments to achieve the diversity that the money market mutual funds it invests in provides;

(ii) Money market instruments have varying degrees of liquidity and penalties may be incurred if an instrument is disposed of before it matures; and

(iii) Directly investing in money market instruments is more time consuming and most likely, more costly, than investing in money market funds, without any meaningful benefit.

10. It would also not be prudent for the Filer to invest its cash balances in money market mutual funds qualified for sale by prospectus in a province of Canada because of the following reasons:

(i) There are only a limited number of U.S. money market mutual funds that are qualified for sale by prospectus in a province of Canada;

(ii) The Filer is a U.S. entity and cannot access U.S. money market mutual funds that are qualified for sale by prospectus in a province of Canada as directly and as easily as U.S. money market mutual funds that are qualified for sale by prospectus in the U.S.;

(iii) The Filer would need to develop the necessary relationships with Canadian money market fund issuers;

(iv) Investment in U.S. money market mutual funds that are qualified for sale by prospectus in a province of Canada could be more costly than investment in U.S. money market mutual funds that are qualified for sale by prospectus in the U.S; and

(v) The Filer could be subject to cross-border tax issues if it were to invest in U.S. money market mutual funds that are qualified for sale by prospectus in a province of Canada as a U.S. entity.

11. The regulatory oversight and the quality of investments held by a money market mutual fund qualified for sale by prospectus in each of the U.S. and Canada is similar. In particular Rule 2a-7 sets out requirements dealing with portfolio maturity, quality, diversification and liquidity, which are similar to requirements under National Instrument 81-102 Mutual Funds ("NI 81-102").

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 so long as:

(a) any money market mutual fund invested in by the Filer is qualified for sale by prospectus in the U.S. as a result of being a registered investment company under the 1940 Act which complies with Rule 2a-7;

(b) the requirements for money market mutual funds under Rule 2a-7 or any successor rule or legislation are similar to the requirements for Canadian money market funds under NI 81-102 or any successor rule or legislation; and

(c) the Filer is registered with the U.S. Securities and Exchange Commission as an investment adviser under the 1940 Act.