Exemption Orders (Discretionary)

CANADIAN INVESTMENT FUND, LTD.


COR#96/231

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

AND

IN THE MATTER OF CANADIAN INVESTMENT FUND, LTD.

AND

IN THE MATTER OF UNITED AMERICAN EQUITY FUND LTD.

AND

IN THE MATTER OF UNITED AMERICAN GROWTH FUND LTD.

AND

IN THE MATTER OF UNITED GLOBAL GROWTH FUND LTD.

AND

IN THE MATTER OF SPECTRUM UNITED MUTUAL FUNDS INC.


Exemption Order Under Sections 107(a) and 113(b)


WHEREAS Spectrum, manager of Canadian Investment Fund, Ltd., United American Equity Fund Ltd., United American Growth Fund Ltd.and United Global Growth Fund Ltd. (the “Funds”), has applied to the British Columbia Securities Commission for an order:

1. under section 107(a) of the Securities Act, S.B.C. 1985, c.83, that section 105(2)(b) of the Act does not apply to the conversion of the Funds into mutual fund trusts; and

2. under section 113(b) of the Act, that Spectrum, as a mutual fund manager, is exempt from section 109(a) of the Act in connection with the conversion;

AND WHEREAS Spectrum and the Funds have represented to the Commission that:

1. each of the Funds is an open-ended mutual fund corporation governed by the laws of Canada;

2. Spectrum is the manager of the Funds;

3. each Fund is a reporting issuer under the Act, and is not in default of any requirement of the Act or the Securities Rules, B.C. Reg. 479/95;

4. shares of the Funds are distributed continuously to the public in each province and territory of Canada pursuant to a simplified prospectus dated June 5, 1995, in the case of United American Equity Fund Ltd., United American Growth Fund Ltd., and United Global Growth Fund Ltd. and, July 14, 1995, in the case of Canadian Investment Fund, Ltd.;

5. Spectrum has filed a preliminary simplified prospectus dated September 17, 1996, in each province and territory of Canada, to qualify or requalify several new and several existing mutual fund trusts, including new mutual fund trusts to be known as Spectrum United American Equity Fund, Spectrum United American Growth Fund, Spectrum United Global Growth Fund and Spectrum United Canadian Investment Fund (the “Trust Funds”), for sale to the public in Canada upon the filing of a simplified prospectus;

6. the Trust Funds are to be established under declarations of trust dated on or about November 1, 1996;

7. the Trust Funds will be governed by the laws of Ontario and Spectrum will act as the manager of the Trust Funds;

8. under the conversion, each Fund propose to:
      (a) sell substantially all its assets and liabilities (other than sufficient cash and marketable investments to pay the unpaid redemption price for shares of the Fund redeemed on or before October 31, 1996, and to pay the dividend on shares of the Fund declared payable to shareholders of record on October 31, 1996, to those shareholders who request the dividend be paid in cash) to the applicable Trust Fund in consideration for the issuance to the Fund of units of the applicable Trust Fund having an aggregate net asset value equal to the aggregate net asset value of all of the issued and outstanding shares of the Fund not redeemed before October 31, 1996;

      (b) immediately thereafter, redeem all of the issued and outstanding shares of the Fund and distribute all of the Fund’s assets, namely the units of the Trust Fund which the Fund has just acquired, to its shareholders, so that each shareholder becomes a unitholder of the applicable Trust Fund and receives units of the applicable Trust Fund (including fractional units, if necessary) equal to the net asset value of the shares of the Fund previously held by that shareholder; and

      (c) dissolve;
9. following receipt of a Notice of Meeting and Management Information Circular prepared and delivered in accordance with the Act and Rules, the shareholders of the Funds approved the conversion at the annual and special meetings of the shareholders of the Funds held on August 14 and 15;

10. the proposed investment by the Funds in units of the applicable Trust Fund will be effected by the delivery of the portfolio securities of each Fund to the applicable Trust Fund in exchange for units of the applicable Trust Fund as contemplated in section 11.07(2) of National Policy Statement No. 39 and no brokerage fees, commissions or redemption charges will be incurred by each of the Funds or its shareholders in connection with the conversion;

11. the costs of effecting the conversion will be charged to each Fund;

12. upon the investment in units of the applicable Trust Fund and before distributing its assets to its shareholders, each Fund will, for a moment in time, constitute a “substantial securityholder” (as defined in section 104(2)(c) of the Act) of the applicable Trust Fund and, accordingly, in the absence of this order, each Fund would be precluded by section 105(2)(b) of the Act from holding units of the applicable Trust Fund;

13. in the opinion of the Funds and Spectrum, the proposed investment by each Fund in units of the applicable Trust Fund is in the best interests of each Fund and represents the business judgment of responsible persons uninfluenced by considerations other than the best interest of each Fund; and

14. in the absence of this order, section 109(a) of the Act would require Spectrum to file a report with the Commission regarding the conversion;

AND WHEREAS on the basis of the above representations, the Commission is satisfied, for the purpose of the order requested under section 107(a) of the Act, that the proposed investment by each Fund in units of the applicable Trust Fund represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of each Fund;

AND WHEREAS the Commission is satisfied, for the purpose of the order requested under section 113(b) of the Act, that it would not be prejudicial to the public interest to grant the relief requested;

IT IS ORDERED:

1. under section 107(a) of the Act, that section 105(2)(b) of the Act does not apply to the investment by each Fund in units of the applicable Trust Fund provided that immediately following the investment by each Fund in units of the applicable Trust Fund, all of the assets of each Fund are distributed to its shareholders and each Fund is dissolved as soon as reasonably possible thereafter; and

2. under section 113(b) of the Act, that Spectrum is exempt from section 109(a) of the Act in connection with the conversion.


DATED at Vancouver, British Columbia, on October 31, 1996.





Joyce C. Maykut, Q.C.
Vice Chair
©2025 British Columbia Securities Commission