Man Investments Canada Corp. and GLG Income Opportunities Fund

Headnote

NP 11-203 -- Process for Exemptive Relief Application in Multiple Jurisdictions -- relief granted from seed capital requirements for commodity pools in NI 81-104 -- manager permitted to redeem seed investment in pool provided pool has received subscriptions from investors totalling at least $5 million and provided the manager maintains working capital as required for investment fund manager under National Instrument 31-103 Registration Requirements and Exemptions -- National Instrument 81-104 Commodity Pools.

Applicable Legislative Provisions

National Instrument 81-104 Commodity Pools, ss. 3.2(2)(a), 10.1.

September 25, 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

MAN INVESTMENTS CANADA CORP.

(the Manager or the Filer)

AND GLG INCOME OPPORTUNITIES FUND

(the Fund)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of the Fund, for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) granting exemptive relief (the Requested Relief), pursuant to Part 10 of National Instrument 81-104 Commodity Pools (NI 81-104), from subsection 3.2(2)(a) of NI 81-104 which requires a commodity pool to have invested in it at all times an amount invested in 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 Investment) to permit the Filer to ask the Fund to redeem the Filer's Seed Investment.

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. 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 the other provinces and territories of Canada (collectively, with Ontario, the 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 Filer:

The Manager

1. The Manager is a corporation incorporated under the Canada Business Corporations Act and is the trustee and manager of the Fund.

2. The Manager's head office is located in Toronto, Ontario.

3. The Manager is registered as an Investment Fund Manager in Ontario, as an adviser in the category of Portfolio Manager in Ontario and Alberta and as a dealer in the category of Exempt Market Dealer in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia.

4. Concurrently with this application, the Manager filed an application on behalf of the Fund for a decision under the Legislation granting, among other things, an exemption from the requirements in paragraphs 2.5(2)(a) and (c) of NI 81-102 to permit the Fund to gain exposure to securities of GLG Prospect Mountain Ltd. (GLG Ltd.).

5. None of the Manager, the Fund or GLG Ltd. is in default of any securities legislation in any of the Jurisdictions.

The Fund

6. The Fund is a mutual fund subject to NI 81-102 and a commodity pool, as such term is defined under NI 81-104, in that the Fund has adopted fundamental investment objectives that permit the Fund to gain exposure to or use or invest in specified derivatives that is not permitted under NI 81-102.

7. The Fund prepared and filed in accordance with National Instrument 41-101 General Prospectus Requirements (NI 41-101) a long form preliminary prospectus dated August 30, 2012 on SEDAR (the Preliminary Prospectus) with respect to the proposed offering (the Offering) of Class L Units and Class M Units of the Fund (collectively, the Units), a receipt for which was issued on August 31, 2012.

8. The Fund will prepare and file a long form final prospectus in accordance with NI 41-101 (the Final Prospectus); upon obtaining a receipt therefor, the Units will be qualified for distribution and the Fund will be a reporting issuer in each of the Jurisdictions.

9. As disclosed in the Preliminary Prospectus, the Fund's investment objectives will be to: (i) provide holders of Units (the Unitholders) with monthly-tax advantaged distributions; (ii) provide the opportunity for long-term appreciation for the Unitholders; and (iii) profit over the entire credit cycle by generally investing or otherwise gaining exposure across the capital structure of leveraged companies and other issuers often driven by a pending event or catalyst.

10. The Fund will be created to provide exposure to a portfolio comprised primarily of companies with credit, legal, structural or other risks through a broad range of investment instruments which may include high yield bonds, below-par/distressed bank loans, par/near-par bank loans, debtor-in-possession loans, trade claims or receivables, asset-backed securities, convertible and municipal bonds, credit default swaps, credit default indexes, preferred and common stock, warrants and other rights to purchase shares, collateralized debt, bond and loan obligations, futures, options, swaps and other derivative contracts, bridge loans, mezzanine loans, and other types of debt instruments (collectively, the Portfolio), to be held by GLG Ltd.

11. The Fund will obtain exposure to economic returns of the Portfolio through one or more forward sale agreements (each a Forward Agreement) entered into with one or more Canadian chartered banks and/or their affiliates (each a Counterparty).

12. The Fund will invest substantially all of the proceeds of the Offering in a specified portfolio of common shares of Canadian public companies (the Common Share Portfolio) that are Canadian securities as defined in subsection 39(6) of the Income Tax Act (Canada).

13. Under the terms of the Forward Agreement, the Counterparty will agree to pay to the Fund on the scheduled settlement date of a Forward Agreement (the Forward Date), as the purchase price for the Common Share Portfolio, an amount based on the value of the Portfolio on the Forward Date.

14. The return to the Fund, and consequently to the Unitholders, will by virtue of the Forward Agreements depend on the net redemption proceeds that would be received by holders on a redemption of the Canadian dollar denominated redeemable notes, proposed to be issued by GLG Ltd., having an aggregate value equal to the aggregate net asset value of the Portfolio.

15. The Fund does not intend to list the Units on any stock exchange.

GLG Ltd. and the Portfolio

16. GLG Ltd. is an exempted company with limited liability incorporated in the Cayman Islands on August 22, 2012. GLG Ltd. will acquire and maintain the Portfolio.

17. GLG Ore Hill LLC (the GLG Manager) will act as manager and investment manager of GLG Ltd. and will actively manage the Portfolio.

18. The GLG Manager, a Delaware limited liability company, is ultimately owned by Man Group plc and is an affiliate of the Manager.

19. GLG Ltd. prepared and filed a long form non-offering preliminary prospectus in accordance with NI 41-101 in Ontario and Québec on September 11, 2012, a receipt for which was issued on September 12, 2012, and intends to file in accordance with NI 41-101 and obtain a receipt for a long form final prospectus, pursuant to which it will become a reporting issuer under the Securities Act (Ontario) and Securities Act (Québec) and subject to continuous disclosure requirements of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106). As a result, the financial statements and other reports required to be filed by GLG Ltd. under NI 81-106 will be available to the Unitholders on SEDAR.

20. GLG Ltd. will be a mutual fund because holders of its securities will be entitled to receive on demand, an amount computed by reference to the NAV of the Portfolio. However, GLG Ltd. will not distribute any securities under its non-offering prospectus and accordingly GLG Ltd. will be a mutual fund to which NI 81-106 applies, but will not be subject to requirements of either NI 81-102 or NI 81-104.

21. Though not subject to NI 81-104, GLG Ltd. will be a commodity pool as such term is defined in NI 81-104 in that GLG Ltd. has adopted fundamental investment objectives that permit it to use specified derivatives in a manner that is not permitted under NI 81-102.

22. GLG Ltd. has adopted the investment restrictions contained in NI 81-102 except as otherwise permitted by NI 81-104 and in accordance with any exemptions therefrom obtained by the Manager.

Seed Capital Relief

23. Paragraph 3.2(2)(a) of NI 81-104 states that a commodity pool may redeem, repurchase or return any amount invested in securities issued upon the investment in the commodity pool referred to in paragraph 3.2(1)(a) of NI 81-104 only if securities issued under paragraph 3.2(1)(a) of NI 81-104 that had an aggregate issue price of $50,000 remain outstanding and at least $50,000 invested under paragraph 3.2(1)(a) remains in the commodity pool.

24. If the Fund was governed by the provisions of NI 81-102 in this regard, the Fund would be allowed to redeem securities issued upon the seed capital investment in the Fund made by the Filer upon the Fund having received subscriptions totaling not less than $500,000 from persons other than the persons referred to in paragraph 3.1(1)(a) of NI 81-102.

25. The Filer wishes the Fund to redeem the Filer's Seed Investment in the Top Fund subject to the conditions set out in this decision.

26. The Filer understands that the policy rationale behind the permanent seed capital requirement for commodity pools under NI 81-104 is to encourage promoters to ensure that the commodity pool is being properly run for the benefit of the investors by requiring that the promoter of a commodity pool, or a related party, will itself be an investor in the commodity pool at all times.

27. As the trustee and manager of the Fund, the Filer will be obliged in accordance with the terms of the declaration of trust governing the Fund, and in accordance with legislative requirements, to at all times act honestly and in good faith, and in the best interest of the Fund, and exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

28. Having regard to the Filer's fiduciary obligation as set out above, not having $50,000 invested in the Fund at all times will not change how the Filer manages the Fund. The Filer will manage the Fund in accordance with the Legislation and its contractual requirements and the Filer's interests will generally be aligned to those of investors in the Fund.

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:

1. the Filer may not ask the Fund to redeem any of the Filer's Seed Investment until $5 million has been received by the Fund from persons and companies other than the persons and companies referred to in paragraph 3.2(1)(a) of the NI 81-104;

2. the Fund will disclose in its Final Prospectus the basis on which the Fund may redeem the Filer's Seed Investment;

3. if, after the Fund has redeemed the Filer's Seed Investment, the value of the Units subscribed for by investors other than the persons and companies referred to in paragraph 3.2(1)(a) of NI 81-104 drops below $5 million for more than 30 consecutive days, the Filer will, unless the Fund is in the process of being dissolved or terminated, reinvest $50,000 in the securities of the Fund and maintain that investment until condition (1) is again satisfied; and

4. the Filer, as investment fund manager, will at all times maintain excess working capital of a minimum of $100,000 or any higher amount that may be required in compliance with NI 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.