BCSC

Exemption Orders (Discretionary)

ELLIOTT & PAGE LIMITED

2001 BCSECCOM 110

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Relief from reporting requirements and self-dealing prohibitions of the Act in connection with an investment by an RSP fund in forward contracts with related a counterparty or its affiliates, subject to certain conditions.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, ss. 121(2)(a), 121(2)(c), 123, 126(a), 126(d), 127(1)(a) and 130

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO, QUEBEC, NOVA SCOTIA AND NEWFOUNDLAND

AND

IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF
ELLIOTT & PAGE LIMITED
ELLIOTT & PAGE RSP AMERICAN GROWTH FUND
ELLIOTT & PAGE RSP U.S. MID-CAP FUND

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia and Newfoundland (the “Jurisdictions”) has received an application from Elliott & Page Limited (“EPL”) on behalf of Elliott & Page RSP American Growth Fund and Elliott & Page RSP U.S. Mid-Cap Fund (individually, an “RSP Fund” and collectively, the “RSP Funds”) and Elliott & Page American Growth Fund and Elliott & Page U.S. Mid-Cap Fund (individually, an “Underlying Fund” and collectively, the “Underlying Funds”) for a decision pursuant to the securities legislation of the Jurisdictions (the “Legislation”) that:

1. the restrictions contained in the Legislation prohibiting a mutual fund from knowingly making or holding an investment in a person or company who is a substantial security holder of the mutual fund, its management company or distribution company shall not apply in respect of investments by the RSP Funds in the Second Forward Contract (as defined below) and/or other forward contract transactions (collectively, the "Forward Contracts") with The Manufacturers Life Insurance Company ("Manulife Financial") or its affiliates (Manulife Financial and/or its affiliates being hereinafter referred to as “Manulife”), as counterparty;

2. the restrictions contained in the Legislation prohibiting a mutual fund from knowingly making an investment in an issuer in which any person or company who is a substantial security holder of the mutual fund, its management company or distribution company has a significant interest shall not apply in respect of the investments by the RSP Funds in the Forward Contracts;

3. the requirements contained in the Legislation requiring the management company to file a report relating to a purchase or sale of securities between the mutual fund and any related person or company or any transaction in which, by arrangement other than an arrangement relating to insider trading in portfolio securities, the mutual fund is a joint participant with one or more of its related persons or companies, shall not apply in respect of investments by the RSP Funds in the Forward Contracts; and

4. the restrictions of the Legislation prohibiting a portfolio manager from causing assets of a mutual fund to be invested in assets of any issuer in which a responsible person, as defined in the Legislation, or an associate of a responsible person is a director or officer unless that specific fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase.

The Legislation outlined above in paragraphs 1 through 4 will be referred to in this Decision Document as the “Applicable Legislation”.

AND WHEREAS pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the “System”) the Ontario Securities Commission is the principal regulator for this application;

AND WHEREAS EPL has represented to the Decision Makers that:

1. Each of the RSP Funds and the Underlying Funds is an open-end mutual fund trust established under the laws of the Province of Ontario.

2. EPL is a corporation established under the laws of the Province of Ontario. EPL is the manager, principal distributor and promoter of each of the RSP Funds and the Underlying Funds. The registered head office of EPL is in the province of Ontario.

3. The RSP Funds and the Underlying Funds are reporting issuers and are not in default of any requirements of the Legislation. The securities of each of the RSP Funds and the Underlying Funds are currently qualified for distribution pursuant to a simplified prospectus and annual information form dated August 16, 2000 (collectively, the “Prospectus”).

4. In connection with the creation of the RSP Funds in November 1999, applications were made and relief obtained from the various securities authorities in Canada providing the standard form of exemptive relief required in connection with the creation and public distribution of RSP mutual funds like the RSP Funds. The exemptive relief is evidenced by: (i) a letter dated November 17, 1999 from the Ontario Securities Commission on behalf of each of the Jurisdictions providing the required approval under National Policy Statement No. 39; and (ii) an MRRS Decision Document dated November 17, 1999 (collectively, the “1999 Decision Documents”).

5. The RSP Funds originally entered into a forward contract (the “Original Forward Contract”) with a certain financial institution (the “Original Counterparty”).

6. Manulife, a financial institution which owns 100% of EPL, may in the future be prepared to enter into a forward contract (the “Second Forward Contract”) as a second counterparty (the “Second Counterparty”).

7. The Prospectus (and each renewal thereof) will disclose the involvement of Manulife in acting as the Second Counterparty or otherwise as a counterparty as well as all applicable charges in connection with a Forward Contract.

8. Except for the transaction costs payable to Manulife in relation to a Forward Contract, none of the RSP Funds, the Underlying Funds, EPL or any affiliate or associate of any of the foregoing will pay any fees or charges of any kind to any other related party in connection with a trade in a Forward Contract.

9. Except to the extent evidenced by decisions and specific approvals granted by the Decision Makers, any investment by the RSP Funds in a Forward Contract have been structured to comply with the investment restrictions of the Legislation and National Instrument 81-102.

10. In the absence of the Decision, the Applicable Legislation prohibits each of the RSP Funds from investing in a Forward Contract.

11. In the absence of the Decision, the Applicable Legislation requires EPL to file a report on every investment made by the RSP Funds in a Forward Contract.

12. Each investment by the RSP Funds in a Forward Contract represents the business judgement of responsible persons, uninfluenced by considerations other than the best interests of the RSP Funds.

AND WHEREAS pursuant to the System this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);

AND WHEREAS each of the Decision Makers are satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that the Applicable Legislation does not apply so as to prevent the RSP Funds from investing in a Forward Contract.

PROVIDED THAT IN RESPECT OF the investments by the RSP Funds in a Forward Contract, the Decision shall only apply in respect of investments in a Forward Contract that are made by the RSP Funds in compliance with the 1999 Decision Documents and the following conditions:

(a) the pricing terms offered by Manulife to the RSP Funds under a Forward Contract are at least as favourable as: (i) the pricing terms entered into by similar mutual funds of similar size as the RSP Funds with non-related counterparties; and (ii) the pricing terms entered into by similar mutual funds of similar size as the RSP Funds committed by Manulife;

(b) prior to the RSP Funds entering into a Forward Contract with Manulife, the independent auditors of the RSP Funds will review the pricing terms described in condition (a) to ensure that the pricing is at least as favourable;

(c) the review by the independent auditors will be undertaken not less frequently than on a quarterly basis and, in addition, on every renewal or amendment to pricing terms of a Forward Contract, during the term of such contract;

(d) the RSP Funds will enter into a Forward Contract with Manulife only once confirmation of favourable pricing is received from the independent auditors of the RSP Funds; and

(e) the Prospectus (and each renewal thereof) discloses the independent auditors’ role and review of the Forward Contracts, as well as the involvement of Manulife and its relationship to the RSP Funds.

DATED at Toronto, Ontario this 8th day of January, 2001.

J.A. Geller Howard I. Wetston