Exemption Orders (Discretionary)

GOLDMAN, SACHS & CO. AND ITS AFFILIATES


2001 BCSECCOM 1097


Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Trades in units of pooled funds exempt from the requirement to file a report of the trade within a specified period of time, provided that the reports are filed and fees paid within 30 days of the year end of the respective fund.

Applicable British Columbia Provisions

Securities Act, R.S.B.C. 1996, c. 418, ss. 45(2)(5), 45(2)(22), 45(2)(25), 74(2)(4), 74(2)(19), 74(2)(22), 76

Securities Rules, B.C. Reg. 194/97, s. 139

IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO, NEW BRUNSWICK, NOVA SCOTIA AND PRINCE EDWARD ISLAND

AND

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

AND

IN THE MATTER OF GOLDMAN, SACHS & CO. AND ITS AFFILIATES

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of the provinces of British Columbia, Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia and Prince Edward Island, (the “Jurisdictions”) has received an application from Goldman, Sachs & Co. (“GS&Co.”) on behalf of itself and its affiliates (collectively, “Goldman Sachs”) for a decision pursuant to the securities legislation and securities directions (collectively, the “Legislation”) of the Jurisdictions that:

A. certain trades in securities (“Securities”) of certain investment funds (individually, a “Fund” and collectively, the “Funds”) which have been or will be established by Goldman Sachs are not subject to the registration requirements or the prospectus requirements of the Legislation of Ontario, New Brunswick and Prince Edward Island (the “Prospectus and Registration Jurisdictions”) subject to certain conditions;

B. distributions of Securities of the Funds are not subject to the requirements of the Legislation of the Jurisdictions relating to the filing of forms and the payment of fees within 10 days of each distribution or in some cases within 10 days after the end of the calendar year in which the distribution takes place, subject to certain conditions; and

C. distributions of Securities of Money Market Funds (as defined in paragraph 10 below) are exempt from the fees that would otherwise be payable in the province of Ontario pursuant to the Legislation of Ontario;

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 it has been represented by GS&Co. to the Decision Makers that:

1. GS&Co. is a limited partnership governed by the laws of New York and is registered under the Securities Act (Ontario) (the “Act”) as a dealer in the category of international dealer and as an adviser in the category of international adviser.

2. Existing Funds have been established by Goldman Sachs under the laws of the United States, the Cayman Islands, Ireland and Luxembourg.

3. Future Funds may be established by Goldman Sachs under the laws of Canada or a jurisdiction within Canada, or under the laws of a jurisdiction outside Canada.

4. The Securities of the Funds will be distributed in the Jurisdictions only by registrants appropriately registered therein or pursuant to an exemption from the requirement to be registered therein, and may be distributed by GS&Co. or by Goldman Sachs Canada Inc. (“GSCI”), a corporation governed by the laws of Ontario that is registered under the Act as a dealer in the category of investment dealer.

5. The Securities of the Funds will be distributed in the Jurisdictions on a continuous basis on the terms described in an offering memorandum which will be provided to each investor in connection with the initial distribution of Securities of a particular Fund to that investor and which will contain a description of any applicable rights of action provided to that investor under statute, regulation or contract.

6. The minimum initial investment (the “Initial Minimum Investment”) in any of the Funds by an investor in any Jurisdiction will be not less than the minimum aggregate purchase amount prescribed by the applicable Legislation (the “Prescribed Amount”) and will be made in reliance upon the prospectus exemption in the Jurisdiction (the “Private Placement Exemption”).

7. Following the Initial Minimum Investment in a Fund, it is proposed that the securityholders of the Fund who were sold Securities of such Fund in reliance on the Private Placement Exemption be permitted to:

A. automatically reinvest distributions attributable to outstanding Securities held by the securityholder in the Fund to acquire additional securities of the Fund (“Reinvested Securities”), unless otherwise requested by the securityholder; or

B. subscribe and pay for additional securities of the Fund (“Additional Securities”).

8. It is proposed that investments in Additional Securities in a Fund be permitted in amounts less than the Prescribed Amount; provided that at the time of such subsequent investment the securityholder holds Securities of the Fund with an aggregate acquisition cost or aggregate net asset value of at least the applicable Prescribed Amount.

9. Securities in each of the Funds will not be transferable, but will be redeemable upon the request of the securityholders at the net asset value per security on a valuation day to be provided for in the trust indenture or other governing document of a particular Fund.

10. The Funds may include investment funds that are money market funds (the “Money Market Funds”) within the meaning of National Instrument 81-102.

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 is 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:

A. the registration requirements and the prospectus requirements contained in the Legislation of the Prospectus and Registration Jurisdictions shall not apply to:

(i) the issuance of Additional Securities of a Fund to a securityholder of that Fund provided that:

(1) the initial investment in Securities of that Fund was pursuant to the applicable Private Placement Exemption;

(2) at the time of the issuance of such Additional Securities of the Fund, the holder owns Securities of the Fund having an aggregate acquisition cost or an aggregate net asset value of not less than the Prescribed Amount of the applicable Prospectus Jurisdiction;

(3) at the time of the acquisition of such Additional Securities, the manager of the Fund is registered under the Legislation of Ontario as an adviser in the category of international adviser and such registration is in good standing, or is a person or company exempt from the adviser registration requirements of the Legislation of Ontario;

(4) this clause (i) will cease to be in effect with respect to a Prospectus and Registration Jurisdiction upon the coming into force of any legislation, regulation or rule in such Jurisdiction relating to the distribution of Additional Securities of the Funds; and;

(ii) the issuance of Reinvested Securities of a Fund to a securityholder of that Fund provided that:

(1) no sales commission or other charge in respect of such issuance of Reinvested Securities is payable by the securityholder; and

(2) the securityholder has received, not more than 12 months before such issuance, a statement describing (A) the details of any deferred or contingent sales charge or redemption fee that is payable at the time of the redemption of a Security, (B) the right that the securityholder has to make an election to receive cash instead of Securities on the payment of the net income or net realized capital gains distributed by the Fund, (C) instructions on how the right referred to in subclause (B) can be exercised, and (D) the fact that no prospectus is available for the Fund as Securities are offered pursuant to prospectus exemptions only;

B. the requirements contained in the Legislation of the Jurisdictions to file a report of a distribution of Securities of the Funds within 10 days of such distribution or in some cases within 10 days after the end of the calendar year in which the distribution takes place shall not apply to distributions of Securities of the Funds, including distributions of Additional Securities, provided that within 30 days after each financial year end of each Fund, such Fund:

(i) files with the applicable Decision Maker a report in respect of all distributions of Securities of the Fund in the applicable Jurisdictions during the financial year in the form prescribed by the applicable Legislation; and

(ii) subject to paragraph C below, remits the applicable fees in respect of distributions of Securities of the Fund in the applicable Jurisdiction during the financial year for which fees are otherwise required under the applicable Legislation; and

C. the fees that are otherwise applicable to a distribution of Securities of a Money Market Fund pursuant to the Legislation of Ontario shall not be applicable provided that:

(i) Securities of the Money Market Fund are only issued in reliance on exemptions or exemptive relief from the prospectus requirement in section 53 of the Act;

(ii) the Money Market Fund pays a fee within 30 days after the financial year end of the Fund;

(iii) the fee payable by the Money Market Fund is equal to 0.02% (less 20%) of the net sales in Ontario from the distribution of Securities of the Money Market Fund in such financial year, where net sales is the amount calculated by the following formula:

X-Y

where

“X” is the aggregate gross proceeds realized in Ontario from distributions of Securities of the Money Market Fund during the financial year in reliance on exemptions or exemptive relief from the prospectus requirement in section 53 of the Act, and

“Y” is the aggregate of the redemption and repurchase prices paid to redeem or repurchase Securities of the Money Market Fund held by persons in Ontario during the financial year; and

(iv) this paragraph C will cease to be in effect upon the coming into force of a new fee schedule that amends the formula by which fees for distributions of Securities of Money Market Funds are calculated.

DATED on this 21st day of November, 2001.

Robert W. Korthals H. Lorne Morphy