BOR 96/21 - Further Transitional Relief Relating to Transactions Between a Mutual Fund and Non-Participating Affiliates of Its Responsible Persons [Rescinded]

IN THE MATTER OF THE SECURITIES ACT S.B.C. 1985, c. 83

AND

IN THE MATTER OF FURTHER TRANSITIONAL RELIEF RELATING TO TRANSACTIONS BETWEEN A MUTUAL FUND AND NON-PARTICIPATING AFFILIATES OF ITS RESPONSIBLE PERSONS

Order Under Section 113(b) of the Securities Act

WHEREAS effective January 1, 1996, section 110.1 of the Securities Act, S.B.C. 1985, c. 83 (the "Act") includes new requirements applicable to related party transactions of mutual funds and their responsible persons;

AND WHEREAS the Commission has issued BOR#96/5 and BOR#96/17 providing relief from section 110.1(1)(b) for transactions involving mortgages and certain debt securities, respectively;

AND WHEREAS BOR#95/8, BOR#96/6, BOR#96/11 and BOR#96/13 provided transitional relief to allow market participants a period of time to adjust to these new requirements;

AND WHEREAS the Commission has received submissions requesting similar relief to that contained in BOR#96/17 for equity securities, forward contracts and over-the-counter options;

AND WHEREAS the definition of "responsible person" in section 104(1) of the Act includes an affiliate of a person that is a responsible person where the affiliate does not:

(a) participate in the formulation of investment decisions made on behalf of the mutual fund, or

(b) before implementation of investment decisions made on behalf of the mutual fund, have access to those decisions or to advice given to the mutual fund relating to those decisions,

("a non-participating affiliate");

AND WHEREAS the equivalent provision to section 110.1 in other Canadian jurisdictions do not apply to a non-participating affiliate;

AND WHEREAS the Commission has determined that it would be appropriate to provide additional transitional relief for the purchase or sale of equity securities, forward contacts and over-the-counter options from or to the account of non-participating affiliates, to allow time to consider further the submissions received and to allow market participants a period of time to develop procedures to address the new requirements;

AND WHEREAS the Commission considers that to do so would not be prejudicial to the public interest;

IT IS ORDERED under section 113(b) of the Act that section 110.1(1)(b) of the Act does not apply to a purchase or sale of equity securities, forward contracts or over-the-counter options of any issuer from or to the account of a non-participating affiliate, provided the purchase or sale contract is entered into before December 1, 1997.

DATED at Vancouver, British Columbia, on November 27, 1996.

Douglas M. Hyndman
Chair

REF: BOR#95/8
BOR#96/5
BOR#96/6
BOR#96/11
BOR#96/13
BOR#96/17