Securities Law & Instruments

Headnote

Subsection 78(1) and section 80 of the Commodity Futures Act (Ontario) -- Variation of previous order to add new sub-advisers -- Relief from the adviser registration requirements of subsection 22(1)(b) of the CFA granted to sub-advisers not ordinarily resident in Ontario in respect of advice regarding trades in commodity futures contracts and commodity futures options, subject to certain terms and conditions -- Relief mirrors exemption available in section 7.3 of OSC Rule 35-502 Non-Resident Advisers made under the Securities Act (Ontario).

Applicable Legislative Provisions

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22(1)(b), 78(1), 80.

Securities Act, R.S.O. 1990, c. S.5, as am. -- Rule 35-502 Non-Resident Advisers.


IN THE MATTER OF
THE COMMODITY FUTURES ACT,
R.S.O. 1990, CHAPTER C.20, AS AMENDED
(the CFA)

AND

IN THE MATTER OF
MACKENZIE FINANCIAL CORPORATION

AND

EATON VANCE MANAGEMENT

AND

IVY INVESTMENT MANAGEMENT COMPANY
(a subsidiary of Waddell & Reed Financial Inc.)

AND

MACKENZIE INVESTMENTS PTE. LTD.
(a wholly owned subsidiary of Mackenzie Financial Corporation)

AND

RCM ASIA PACIFIC LIMITED

AND

SETANTA ASSET MANAGEMENT LIMITED

AND

THE PUTNAM ADVISORY COMPANY, LLC

AND

PUTNAM INVESTMENTS LIMITED

ORDER
(Subsection 78(1) and section 80 of the CFA)



UPON the application (the Application) of Mackenzie Financial Corporation (the Principal Adviser), The Putnam Advisory Company, LLC (PAC) and Putnam Investments Limited (PIL) (each a New Sub-Adviser and collectively the New Sub-Advisers), and Eaton Vance Management, Ivy Investment Management Company, Mackenzie Investments Pte. Ltd., RCM Asia Pacific Limited, and Setanta Asset Management Limited (each an Existing Sub-Adviser and collectively, the Existing Sub-Advisers) to the Ontario Securities Commission (the Commission) for an order, pursuant to subsection 78(1) of the CFA, to vary a previous order of the Commission dated March 8, 2013, made under subsection 78(1) and section 80 of the CFA, In the Matter of Mackenzie Financial Corporation and Eaton Vance Management, and Ivy Investment Management Company, Mackenzie Investments Ptd. Ltd., and RCM Asia Pacific Limited and Setanta Asset Management Limited (the Previous Order), a copy of which is attached as Attachment "A" hereto;

WHEREAS the Previous Order provided that each of the Existing Sub-Advisers and their Representatives (defined below) are exempt from the CFA Registration Requirement (defined below) in respect of acting as a sub-adviser to the Principal Adviser in respect of trading in Contracts, provided that certain conditions are satisfied;

AND WHEREAS the Principal Adviser seeks to vary the Previous Order to add each of the New Sub-Advisers and any individuals engaging in, or holding themselves out as engaging in, the business of advising others as to trading in Contracts (as defined below) on the relevant New Sub-Adviser's behalf (the Representatives) to the Previous Order, such that each of the New Sub-Advisers and their Representatives will also be exempt, for a period of five years from the date of the Previous Order, from the adviser registration requirement in paragraph 22(1)(b) of the CFA, subject to certain terms and conditions;

AND WHEREAS for the purposes of this order (the Order):

"Contract" has the meaning ascribed to that term in subsection 1(1) of the CFA;

"CFTC" means the United States Commodity Futures Trading Commission;

"FCA" means the Financial Conduct Authority in the United Kingdom;

"OSA" means the Securities Act (Ontario);

"OSA Adviser Registration Requirement" means subsection 25(3) of the OSA that prohibits a person or company from engaging in the business of, or holding himself, herself or itself out as engaging in the business of, advising anyone with respect to investing in, buying or selling securities in Ontario unless the person or company is registered in the appropriate category of registration under the OSA;

"OSA Sub-Adviser Exemption" means the exemption from the OSA Adviser Registration Requirement set out in section 7.3 of OSC Rule 35-502 Non-Resident Advisers;

"SEC" means the United States Securities and Exchange Commission; and

"U.S. Advisers Act" means the United States Investment Advisers Act of 1940.

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Principal Adviser and the New Sub-Advisers having represented to the Commission that:

Principal Adviser

1. The Principal Adviser is a corporation governed by the laws of Ontario with its head office located in Toronto, Ontario.

2. The Principal Adviser is registered:

a. under the OSA, as an adviser in the category of portfolio manager, as a dealer in the category of exempt market dealer, and as an investment fund manager; and

b. under the CFA as an adviser in the category of a commodity trading manager.

3. The Principal Adviser is also registered under the securities legislation in each Canadian province and territory as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer. It is also registered under the securities legislation of Québec and Newfoundland as an investment fund manager.

New Sub-Advisers

4. Each New Sub-Adviser is organized under the laws of a jurisdiction other than Canada or the provinces or territories thereof. In particular, the New Sub-Advisers are:

a. PAC, a limited liability company organized under the laws of the State of Delaware, with its principal place of business located in Boston, State of Massachusetts in the United States. PAC is registered with the SEC as an investment adviser under the U.S. Advisers Act. Although PAC advises on derivative products to clients in the United States, it is currently exempt from registration under the United States Commodity Exchange Act as a commodity trading adviser with the CFTC.

b. PIL, a company organized under the laws of England and Wales with its principal place of business located in London, United Kingdom. PIL is registered with the FCA as an adviser. PIL's permitted activities pursuant to its registration with the FCA include advising on Contracts.

5. None of the New Sub-Advisers are or will be registered in any capacity under the CFA and are not required to do so under the laws of their respective jurisdiction in order to engage in the Proposed Sub-Advisory Services (as defined below).

6. To the best of the knowledge of the Principal Adviser and the New Sub-Advisers, none of the Principal Adviser or the New Sub-Advisers, as the case may be, is in default of securities legislation of Ontario.

7. The Principal Adviser is the investment manager of and/or provides discretionary portfolio management services to (i) investment funds, the securities of which are qualified by prospectus for distribution to the public in Ontario and certain other provinces and territories of Canada (the Investment Funds); (ii) pooled funds, the securities of which are sold on a private placement basis in Ontario and certain other provinces and territories of Canada pursuant to prospectus exemptions contained in National Instrument 45-106 Prospectus and Registration Exemptions (the Exempt Funds); (iii) managed accounts of clients who have entered into investment management agreements with the Principal Adviser (the Managed Accounts); and (iv) other Investment Funds, Exempt Funds and Managed Accounts that may be established in the future in respect of which the Principal Adviser engages a New Sub-Adviser to provide portfolio advisory services (the Future Clients) (where each of the Investment Funds, Exempt Funds, Managed Accounts and Future Clients are referred to individually as a Client and collectively as the Clients).

8. The portfolio management services provided by the Principal Adviser to its Clients will include acting as an adviser with respect to both securities and Contracts where such investments are part of the investment program of such Clients.

9. In connection with the Principal Adviser acting as an adviser to Clients in respect of the purchase or sale of Contracts, the Principal Adviser has retained or will retain, pursuant to a written agreement made between the Principal Adviser and each New Sub-Adviser, each New Sub-Adviser to act as a sub-adviser to the Principal Adviser by exercising discretionary authority on behalf of the Principal Adviser, in respect of all or a portion of the assets of the investment portfolio of the respective Client, which may include discretionary authority to buy or sell Contracts for the Client (the Proposed Sub-Advisory Services), provided that:

a. in each case, the Contracts must be cleared through an "acceptable clearing corporation" (as defined in National Instrument 81-102 Mutual Funds, or any successor thereto (NI 81-102)) or a clearing corporation that clears and settles transactions made on a futures exchange listed in Appendix A of NI 81-102; and

b. such investments are consistent with the investment objectives and strategies of the applicable Client.

10. The written agreement between the Principal Adviser and each New Sub-Adviser sets out or will set out the obligations and duties of each party in connection with the Proposed Sub-Advisory Services and permits the Principal Adviser to exercise the degree of supervision and control it is required to exercise over the New Sub-Adviser in respect of the Proposed Sub-Advisory Services.

11. In connection with the Proposed Sub-Advisory Services, the relationship among the Principal Adviser, the relevant New Sub-Adviser and any Client shall satisfy the applicable requirements of the OSA Sub-Adviser Exemption, namely that:

a. the obligations and duties of the relevant New Sub-Adviser will be set out in a written agreement with the Principal Adviser;

b. the Principal Adviser will contractually agree with the Client to be responsible for any loss that arises out of the failure of the relevant New Sub-Adviser:

i. to exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Principal Adviser and the Client; or

ii. to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances (together with (i), the Assumed Obligations); and

c. the Principal Adviser cannot be relieved by the Client from its responsibility for any loss that arises out of the failure of the relevant New Sub-Adviser to meet the Assumed Obligations.

12. The relevant New Sub-Adviser and its Representatives shall only provide the Proposed Sub-Advisory Services as long as the Principal Adviser is, and remains, registered under the CFA as an adviser in the category of commodity trading manager.

13. The Principal Adviser will deliver to the Clients all applicable reports and statements under applicable securities, commodity futures and derivatives legislation.

14. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA, or is registered as a representative or as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser (the CFA Adviser Registration Requirement). Under the CFA, "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to trading in Contracts.

15. By providing the Proposed Sub-Advisory Services, each New Sub-Adviser and its Representatives will be engaging in, or holding himself, herself or itself out as engaging in, the business of advising others in respect of Contracts and, in the absence of being granted the requested relief, would be required to register as an adviser, or a representative of an adviser, as the case may be, under the CFA.

16. There is currently no exemption from the CFA Adviser Registration Requirement that is equivalent to the OSA Sub-Adviser Exemption. Consequently, in the absence of the Order, each New Sub-Adviser would be required to satisfy the CFA Adviser Registration Requirement in order to carry out the Proposed Sub-Advisory Services.

17. The Principal Adviser and each New Sub-Adviser submit that it would not be prejudicial to the public interest for the Commission to make the Order because:

a. the Principal Adviser seeks to access certain specialized portfolio management services provided by the New Sub-Advisers, including advice as to trading in Contracts; and

b. each New Sub-Adviser would act as a sub-adviser to the Principal Adviser in respect of trading in contracts on terms and conditions that are analogous to the prescribed terms and conditions of the OSA Sub-Adviser Exemption.

18. All of the representations contained in the Previous Order remain unchanged, except that Mackenzie Investments Pte. Ltd. is now registered with the Monetary Authority of Singapore for a capital markets services license for fund management.

AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the relief requested;

IT IS ORDERED pursuant to subsection 78(1) and section 80 of the CFA that the Previous Order is varied to add each New Sub-Adviser and its Representatives to the Previous Order, such that each New Sub-Adviser and its Representatives are exempt from the CFA Adviser Registration Requirement in respect of acting as a sub-adviser to the Principal Adviser in respect of trading in Contracts provided that:

(a) the Principal Adviser is registered under the CFA as an adviser in the category of commodity trading manager;

(b) each New Sub-Adviser and its Representatives are appropriately registered or licensed to provide the Proposed Sub-Advisory Services to the Clients pursuant to the applicable legislation of their principal jurisdiction, or are entitled to rely on appropriate exemptions from such registrations or licenses;

(c) the obligations and duties of each New Sub-Adviser are set out in a written agreement with the Principal Adviser;

(d) no New Sub-Adviser shall act as a sub-adviser to the Principal Adviser unless the Principal Adviser has contractually agreed with each Client to be responsible for any loss that arises out of any failure of the relevant New Sub-Adviser to meet the Assumed Obligations and cannot be relieved by any of its Clients from its responsibility for any loss that arises out of any failure of the relevant New Sub-Adviser to meet the Assumed Obligations;

(e) the prospectus or similar offering document for each Client for which the Principal Adviser engages the New Sub-Adviser to provide the Proposed Sub-Advisory Services will include the following disclosure:

(i) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of the relevant New Sub-Adviser to meet the Assumed Obligations; and

(ii) a statement that there may be difficulty in enforcing any legal rights against the relevant New Sub-Adviser (or any of its Representatives) because the relevant New Sub-Adviser is resident outside of Canada and all or substantially all of its assets are situated outside of Canada; and

(f) in circumstances where a Client for which the Principal Adviser engages the New Sub-Adviser to provide the Proposed Sub-Advisory Services does not prepare a prospectus or similar offering document for delivery to prospective purchasers, the Client and, if applicable, all investors of the Client who are Ontario residents will receive written disclosure prior to the purchasing of any Contracts for such Client that includes:

(i) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of the relevant New Sub-Adviser to meet the Assumed Obligations; and

(ii) a statement that there may be difficulty in enforcing any legal rights against the relevant New Sub-Adviser (or any of its Representatives) because the relevant New Sub-Adviser is resident outside of Canada and all or substantially all of its assets are situated outside of Canada.

May 3, 2013

"Anne Marie Ryan"
Commissioner
Ontario Securities Commission
 
"Sarah B. Kavanagh"
Commissioner
Ontario Securities Commission

 

ATTACHMENT A

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, CHAPTER C.20, AS AMENDED

(the CFA)

AND

IN THE MATTER OF

MACKENZIE FINANCIAL CORPORATION

AND

EATON VANCE MANAGEMENT

AND

IVY INVESTMENT MANAGEMENT COMPANY

(a subsidiary of Waddell & Reed Financial Inc.)

AND

MACKENZIE INVESTMENTS PTE. LTD.

(a wholly owned subsidiary of Mackenzie Financial Corporation)

AND

RCM ASIA PACIFIC LIMITED

AND

SETANTA ASSET MANAGEMENT LIMITED

ORDER

(Subsection 78(1) and section 80 of the CFA)

UPON the application (the Application) of Mackenzie Financial Corporation (the Principal Adviser) and Eaton Vance Management, Ivy Investment Management Company, Mackenzie Investments Pte. Ltd., RCM Asia Pacific Limited and Setanta Asset Management Limited (each, a Sub-Adviser, and collectively the Sub-Advisers) to the Ontario Securities Commission (the Commission) for an order:

(a) pursuant to subsection 78(1) of the CFA, revoking the exemption order granted by the Commission to the Principal Adviser and the sub-advisers set out therein on March 18, 2008 (the Previous Order); and

(b) pursuant to section 80 of the CFA, that the Sub-Advisers and any individuals engaging in, or holding themselves out as engaging in, the business of advising others as to trading in Contracts (as defined below) on the relevant Sub-Adviser's behalf (the Representatives) be exempt, for a period of five years, from the adviser registration requirement in paragraph 22(1)(b) of the CFA, subject to certain terms and conditions;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND WHEREAS for the purposes of this order (the Order):

"Contract" has the meaning ascribed to that term in subsection 1(1) of the CFA;

"OSA" means the Securities Act (Ontario);

"OSA Adviser Registration Requirement" means subsection 25(3) of the OSA that prohibits a person or company from engaging in the business of, or holding himself, herself or itself out as engaging in the business of, advising anyone with respect to investing in, buying or selling securities in Ontario unless the person or company is registered in the appropriate category of registration under the OSA;

"OSA Sub-Adviser Exemption" means the exemption from the OSA Adviser Registration Requirement set out in section 7.3 of OSC Rule 35-502 Non-Resident Advisers;

"SEC" means the United States Securities and Exchange Commission; and

"U.S. Advisers Act" means the United States Investment Advisers Act of 1940.

AND UPON the Principal Adviser and the Sub-Advisers having represented to the Commission that:

1. The Principal Adviser is a corporation governed by the laws of Ontario with its head office located in Toronto, Ontario.

2. The Principal Adviser is registered:

(a) under the OSA, as an adviser in the category of portfolio manager, as a dealer in the category of exempt market dealer, and as an investment fund manager; and

(b) under the CFA as an adviser in the category of a commodity trading manager.

3. The Principal Adviser is also registered under the securities legislation in each Canadian province and territory as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer. It is also registered under the securities legislation of Québec and Newfoundland as an investment fund manager.

4. Each Sub-Adviser is organized under the laws of a jurisdiction other than Canada or the provinces or territories thereof. In particular, the Sub-Advisers are:

(a) Eaton Vance Management, a Massachusetts Business Trust and which is registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940. Eaton Vance Management is also registered with the U.S. Commodity Futures Trading Commission as a commodity trading advisor under the Commodity Exchange Act. Eaton Vance Management's permitted activities pursuant to such registrations include being able to advise on Contracts.

(b) Ivy Investment Management Company (a subsidiary of Waddell & Reed Financial, Inc.), a corporation organized under the laws of the State of Delaware, United States and which is registered with the SEC as an investment adviser under the U.S. Advisers Act. Ivy Investment Management Company is a commodity trading advisor under the Commodity Exchange Act but is exempt from registration with the U.S. Commodity Futures Trading Commission. As a commodity trading advisor, Ivy Investment Management Company is permitted to advise on Contracts.

(c) Mackenzie Investments Pte. Ltd., a wholly owned subsidiary of the Principal Sub-Adviser and a corporation organized under the laws of Singapore and which is in the process of being registered with the Monetary Authority of Singapore for a capital markets services license for fund management. Mackenzie Investments Pte. Ltd.'s permitted activities pursuant to its capital markets services license will include being able to advise on Contracts.

(d) RCM Asia Pacific Limited, a corporation organized under the laws of Hong Kong and which is licensed by The Securities and Futures Commission in Hong Kong to carry on portfolio management activities. RCM's permitted activities pursuant to its license with The Securities and Futures Commission in Hong Kong to carry on portfolio management include being able to advise on Contracts.

(e) Setanta Asset Management Limited, a corporation organized under the laws of Ireland and which is regulated by the Central Bank of Ireland to provide the services of portfolio management and the reception and transmission of orders in relation to one or more financial instruments. Setanta's permitted activities pursuant to its authority to provide the services of portfolio management and receive and transmit orders in relation to one or more financial instruments include being able to advise on Contracts.

5. None of the Sub-Advisers are registered in any capacity under the CFA and are not required to do so under the laws of their respective jurisdiction in order to engage in the Proposed Sub-Advisory Services (as defined below).

6. To the best of the knowledge of the Principal Adviser and the Sub-Advisers, none of the Principal Adviser or the Sub-Advisers, as the case may be, is in default of securities legislation of Ontario.

7. The Principal Adviser is the investment manager of and/or provides discretionary portfolio management services to (i) investment funds, the securities of which are qualified by prospectus for distribution to the public in Ontario and certain other provinces and territories of Canada (the Investment Funds); (ii) pooled funds, the securities of which are sold on a private placement basis in Ontario and certain other provinces and territories of Canada pursuant to prospectus exemptions contained in National Instrument 45-106 Prospectus and Registration Exemptions (the Exempt Funds); (iii) managed accounts of clients who have entered into investment management agreements with the Principal Adviser (the Managed Accounts); and (iv) other Investment Funds, Exempt Funds and Managed Accounts that may be established in the future in respect of which the Principal Adviser engages a Sub Adviser to provide portfolio advisory services (the Future Clients) (where each of the Investment Funds, Exempt Funds, Managed Accounts and Future Clients are referred to individually as a Client and collectively as the Clients).

8. The portfolio management services provided by the Principal Adviser to its Clients will include acting as an adviser with respect to both securities and Contracts where such investments are part of the investment program of such Clients.

9. In connection with the Principal Adviser acting as an adviser to Clients in respect of the purchase or sale of Contracts, the Principal Adviser has retained or will retain, pursuant to a written agreement made between the Principal Adviser and each Sub Adviser, each Sub Adviser to act as a sub-adviser to the Principal Adviser by exercising discretionary authority on behalf of the Principal Adviser, in respect of all or a portion of the assets of the investment portfolio of the respective Client, which may include discretionary authority to buy or sell Contracts for the Client (the Proposed Sub-Advisory Services), provided that:

(a) in each case, the Contracts must be cleared through an "acceptable clearing corporation" (as defined in National Instrument 81-102 Mutual Funds, or any successor thereto (NI 81-102)) or a clearing corporation that clears and settles transactions made on a futures exchange listed in Appendix A of NI 81-102; and

(b) such investments are consistent with the investment objectives and strategies of the applicable Client.

10. The written agreement between the Principal Adviser and each Sub Adviser sets out or will set out the obligations and duties of each party in connection with the Sub Advisory Services and permits the Principal Adviser to exercise the degree of supervision and control it is required to exercise over the Sub Adviser in respect of the Sub Advisory Services.

11. In connection with the Proposed Sub-Advisory Services, the relationship among the Principal Adviser, the relevant Sub-Adviser and any Client shall satisfy the applicable requirements of the OSA Sub-Adviser Exemption, namely that:

(a) the obligations and duties of the relevant Sub-Adviser will be set out in a written agreement with the Principal Adviser;

(b) the Principal Adviser will contractually agree with the Client to be responsible for any loss that arises out of the failure of the relevant Sub-Adviser:

i. to exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Principal Adviser and the Client; or

ii. to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances (together with (i), the Assumed Obligations); and

(c) the Principal Adviser cannot be relieved by the Client from its responsibility for any loss that arises out of the failure of the relevant Sub-Adviser to meet the Assumed Obligations.

12. Mackenzie Investments Pte. Ltd. will not engage in any Proposed Sub-Advisory Services until registration with the Monetary Authority of Singapore for a capital markets services license for fund management has been granted.

13. The relevant Sub-Adviser and its Representatives shall only provide the Proposed Sub-Advisory Services as long as the Principal Adviser is, and remains, registered under the CFA as an adviser in the category of commodity trading manager.

14. The Principal Adviser will deliver to the Clients all applicable reports and statements under applicable securities, commodity futures and derivatives legislation.

15. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA, or is registered as a representative or as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser (the CFA Adviser Registration Requirement). Under the CFA, "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to trading in Contracts.

16. By providing the Proposed Sub-Advisory Services, each Sub-Adviser and its Representatives will be engaging in, or holding himself, herself or itself out as engaging in, the business of advising others in respect of Contracts and, in the absence of being granted the requested relief, would be required to register as an adviser, or a representative of an adviser, as the case may be, under the CFA.

17. There is currently no exemption from the CFA Adviser Registration Requirement that is equivalent to the OSA Sub-Adviser Exemption. Consequently, in the absence of the Order, each Sub-Adviser would be required to satisfy the CFA Adviser Registration Requirement in order to carry out the Proposed Sub-Advisory Services.

18. The Principal Adviser and Sub-Advisers submit that it would not be prejudicial to the public interest for the Commission to make the Order because:

(a) the Principal Adviser seeks to access certain specialized portfolio management services provided by the Sub-Advisers, including advice as to trading in Contracts; and

(b) each Sub-Adviser would act as a sub-adviser to the Principal Adviser in respect of trading in Contracts on terms and conditions that are analogous to the prescribed terms and conditions of the OSA Sub-Adviser Exemption.

19. On March 18, 2008, the Commission granted the sub-advisers listed in the Previous Order an exemption from the CFA Adviser Registration Requirement when acting as an adviser for the Principal Adviser. The Previous Order is scheduled to expire on March 18, 2013.

AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the relief requested;

IT IS ORDERED, pursuant to subsection 78(1) of the CFA, that the Previous Order is revoked; and

IT IS FURTHER ORDERED pursuant to section 80 of the CFA that each Sub-Adviser and its Representatives are exempt from the CFA Adviser Registration Requirement in respect of acting as a sub-adviser to the Principal Adviser in respect of trading in Contracts provided that:

(a) the Principal Adviser is registered under the CFA as an adviser in the category of commodity trading manager;

(b) each Sub-Adviser and its Representatives are appropriately registered or licensed to provide the Proposed Sub-Advisory Services to the Clients pursuant to the applicable legislation of their principal jurisdiction, or are entitled to rely on appropriate exemptions from such registrations or licenses;

(c) the obligations and duties of each Sub-Adviser are set out in a written agreement with the Principal Adviser;

(d) no Sub-Adviser shall act as a sub-adviser to the Principal Adviser unless the Principal Adviser has contractually agreed with each Client to be responsible for any loss that arises out of any failure of the relevant Sub-Adviser to meet the Assumed Obligations and cannot be relieved by any of its Clients from its responsibility for any loss that arises out of any failure of the relevant Sub-Adviser to meet the Assumed Obligations;

(e) the prospectus or similar offering document for each Client for which the Principal Adviser engages the Sub-Adviser to provide the Proposed Sub-Advisory Services will include the following disclosure:

(i) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of the relevant Sub-Adviser to meet the Assumed Obligations; and

(ii) a statement that there may be difficulty in enforcing any legal rights against the relevant Sub-Adviser (or any of its Representatives) because the relevant Sub-Adviser is resident outside of Canada and all or substantially all of its assets are situated outside of Canada;

(f) In circumstances where a Client for which the Principal Adviser engages the Sub-Adviser to provide the Proposed Sub-Advisory Services does not prepare a prospectus or similar offering document for delivery to prospective purchasers, the Client and, if applicable, all investors of the Client who are Ontario residents will receive written disclosure prior to the purchasing of any Contracts for such Client that includes:

(i) a statement that the Principal Adviser is responsible for any loss that arises out of the failure of the relevant Sub-Adviser to meet the Assumed Obligations; and

(ii) a statement that there may be difficulty in enforcing any legal rights against the relevant Sub-Adviser (or any of its Representatives) because the relevant Sub-Adviser is resident outside of Canada and all or substantially all of its assets are situated outside of Canada;

(g) this Order shall expire five years after the date hereof.

March 8, 2013

"Sarah B. Kavanagh"
Commissioner
Ontario Securities Commission
 
"Paulette Kennedy"
Commissioner
Ontario Securities Commission