BCSC

Exemption Orders (Discretionary)

AIM FUNDS MANAGEMENT INC.

2001 BCSECCOM 1054

COR#01/119

ORDER UNDER SECTION 48 OF THE SECURITIES ACT, R.S.B.C. 1996, c. 418

AIM FUNDS MANAGEMENT INC.

[para 1]
Background
AIM Funds Management Inc. applied for an exemption from the adviser registration requirements in section 34(1)(c) of the Act for certain foreign portfolio managers (the Advisers);

[para 2]
Representations
AIM represents that:

1. AIM, a subsidiary of AMVESCAP PLC, is a corporation amalgamated under the laws of Ontario with its head office located in Ontario;

2. AIM is not a reporting issuer but is registered under the Act as a mutual fund dealer and portfolio manager;

3. AIM is also registered under the securities legislation in Ontario as an adviser in the categories of investment counsellor and portfolio manager;

4. each of the Advisers is, or will be, registered as an adviser to provide investment counselling and portfolio management services under the laws in the jurisdiction where the Adviser resides but is not, or will not, be registered as an adviser under the Act;

5. AIM and its Advisers intend to offer investment counselling and portfolio management services to clients resident in British Columbia (the Participating Clients);

6. each Participating Client will enter into an investment management agreement with AIM that provides AIM with complete discretionary authority to purchase and sell securities on behalf of the client, and authorizes or requires AIM to delegate its discretionary authority over all or a portion of the client’s assets to one or more of the Advisers;

7. the obligations and duties of the Advisers are, or will be, set out in a written agreement with AIM;

8. AIM will agree with its Participating Clients to be responsible for any loss that arises out of the failure of the Advisers to:

(a) exercise their powers and duties honestly, in good faith and in the best interests of AIM and each Participating Client; or

(b) exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances;

9. AIM will not waive this responsibility;

10. the Advisers who provide investment counselling and portfolio management services to Participating Clients would be considered to be acting as "advisers" within the meaning of the Act and in the absence of the requested relief, would be required to be registered, or otherwise exempt from registration, as advisers under the Act; and

11. there are no adviser registration exemptions that the Advisers can rely on to provide investment counselling and portfolio management services to Participating Clients.

[para 3]
Order
Because it is not prejudicial to the public interest, the Commission orders under section 48 of the Act that the Advisers are exempt from the requirements of section 34(1)(c) of the Act for investment counselling and portfolio management services provided to Participating Clients, provided that:

(a) the obligations and duties of the Advisers are set out in a written agreement with AIM;

(b) the investment management agreement between AIM and each Participating Client provides that AIM will be responsible for any loss that arises out of the failure of the Advisers as set out in paragraph 8 above;

(c) AIM cannot be relieved by the Participating Clients from its responsibility for loss under paragraph (b); and

(d) the Advisers are registered as advisers to provide investment counselling and portfolio management services in the jurisdiction where they reside.

DATED November 7, 2001

Joyce C. Maykut, Q.C.
Vice Chair