Exemption Orders (Discretionary)

THE TORONTO 35 INDEX PARTICIPATION FUND


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF THE TORONTO 35 INDEX PARTICIPATION FUND

AND

IN THE MATTER OF THE TSE 100 INDEX PARTICIPATION FUND

AND

IN THE MATTER OF iUNITS S&P/TSE 60 INDEX PARTICIPATION FUND


Exemption Order Under Sections 123(a) and 130(b)


WHEREAS the iUnits S&P/TSE 60 Index Participation Fund (the “Continuing Fund”), Barclays Global Investors Canada Limited, the Toronto 35 Index Participation Fund (the “TIPS Fund”) and the TSE 100 Index Participation Fund (the “HIPS Fund”) (the TIPS Fund and the HIPS Fund, collectively, the “Terminating Funds”) have applied to the Executive Director for an order under:

1. section 123(a) of the Securities Act, R.S.B.C. 1996, c. 418, that sections 121(2)(b) and 121(3) of the Act do not apply to a proposed merger under which the Terminating Funds will be merged with the Continuing Fund (the “Merger”); and

2. section 130(b) of the Act, that the Terminating Funds are exempt from the requirements of section 126(a) of the Act in connection with the Merger;

AND WHEREAS Barclays and the Funds have represented to the Executive Director that:

1. the Continuing Fund is a mutual fund trust established under the laws of Ontario under a declaration of trust made by Barclays; the Continuing Fund is an index participation fund, the underlying assets of which consist of shares in the 60 constituent corporations which make up the S&P/TSE 60 Index in the same proportion as such shares are reflected in the S&P/TSE 60 Index;

2. Barclays is the trustee of the Continuing Fund and as such is responsible for the day-to-day administration of the Continuing Fund;

3. the TIPS Fund is a unit trust established under the laws of Ontario under a trust agreement; the TIPS Fund is an index participation fund, the underlying assets of which consist of shares in the 35 constituent corporations which make up the Toronto 35 Index in the same proportion as such shares are reflected in the Toronto 35 Index;

4. the HIPS Fund is a unit trust established under the laws of Ontario under a trust agreement; the HIPS Fund is an index participation fund, the underlying assets of which consist of shares in the 100 constituent corporations which make up the TSE 100 Index in the same proportion as such shares are reflected in the TSE 100 Index;

5. State Street Trust Company Canada is the trustee of the TIPS Fund and the HIPS Fund;

6. each of the Funds is a reporting issuer under the Act and under the applicable securities legislation of the other provinces of Canada and is not on the list of defaulting reporting issuers maintained under the Act or other applicable securities legislation;

7. units of each of the Funds are distributed in each province of Canada pursuant to prospectuses which have been filed with the securities regulatory authorities in the applicable jurisdictions;

8. in order to effect the Merger:
      (a) the Terminating Funds will transfer all of their respective assets (including their respective portfolio securities but excluding their “Expenses Assets Accounts” as defined in their respective trust agreements) to the Continuing Fund, in consideration for units of the Continuing Fund having an aggregate value as calculated in accordance with the Fund’s declaration of trust equal to the fair market value of the assets acquired from the Terminating Funds;

      (b) immediately thereafter or within three business days, the Terminating Funds will distribute all of their respective assets, which will at that time consist solely of units of the Continuing Fund, to their respective unitholders so that these unitholders will become direct unitholders of the Continuing Fund; and

      (c) thereafter, the Terminating Funds will be terminated;

9. the unitholders of the Terminating Funds approved the Merger at special meetings held on February 28, 2000;

10. the Merger is anticipated to occur on or about March 6, 2000 (the “Effective Date”);

11. the investment objectives, investment strategies, valuation procedures and fee structure of the Terminating Funds are substantially similar to those of the Continuing Fund, except that the annual management expense ratio of the Terminating Funds is approximately 0.04% and the annual management expense ratio of the Continuing Fund is 0.17%;

12. unitholders of each of the Terminating Funds will have the right to redeem their units for cash up to the close of business on the fourth trading day before the Effective Date, subject to the usual redemption fees;

13. units of the Continuing Fund acquired by the unitholders of the Terminating Funds will be subject to the same redemption charge (if any) to which securities of the Terminating Funds were previously subject;

14. the Terminating Funds will pay no sales or redemption charges in connection with its purchase of units of the Continuing Fund;

15. the Merger will not result in the duplication of management fees or other charges payable by the unitholders or the Funds;

16. all costs and expenses of the Merger for which the Terminating Funds are responsible will be borne and covered by the Terminating Funds out of any (i) interest earned on dividends and other distributions on shares of constituent corporations of the Terminating Funds and (ii) revenue from securities lending by the Terminating Funds, and any amounts in excess of such available interest and revenue will be borne by The Toronto Stock Exchange; all costs and expenses of the Merger for which the Continuing Fund is responsible will be borne and covered by the Continuing Fund’s regular maximum expense ratio of 0.17% per year as described in the Continuing Fund’s prospectus, and any amounts in excess of such maximum amount will be borne by Barclays;

17. the Terminating Funds will invest, for the purposes of the Merger, in units of the Continuing Fund by delivering to the Continuing Fund its securities portfolio as contemplated in subsection 9.4(2) of National Instrument 81-102 (“NI 81-102”) and no brokerage fees, commission or other charges or expenses will be incurred in connection therewith;

18. Barclays and the Funds have applied to the securities administrators of each of the provinces and territories of Canada for approvals pursuant to NI 81-102 in connection with the proposed investment by the Terminating Funds in the Continuing Fund;

19. the proxy-related materials prepared and sent to unitholders of the Terminating Funds in connection with the unitholder meeting contains full disclosure of all relevant facts concerning the Merger and includes the current prospectus for the Continuing Fund;

20. upon the investment in units of the Continuing Fund and before distributing its assets to its unitholders, the Terminating Funds will, for a moment in time, be a “substantial security holder” of the Continuing Fund (as defined in section 120(2)(c) of the Act) and, accordingly, in the absence of this order, the Terminating Funds would be precluded by section 121(2)(b) of the Act from making such investment;

21. in the opinion of the Terminating Funds, the proposed investment by the Terminating Funds in units of the Continuing Fund is in the best interests of the Terminating Funds and represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Terminating Funds; and

22. in the absence of this order, section 126(a) of the Act would require Barclays and State Street to file reports with respect to the purchase or sale of securities between the Terminating Funds and the Continuing Fund as the Continuing Fund is a “related person” in relation to the Terminating Funds under the definition in section 120(1) and the deeming provision in section 120(2)(a) of the Act;

AND WHEREAS the Executive Director is satisfied that, for the purpose of the order requested under section 123(a) of the Act, the proposed investment by the Terminating Funds in units of the Continuing Fund represents the business judgment of responsible persons uninfluenced by considerations other than the best interests of the Terminating Funds;

AND WHEREAS the Executive Director is satisfied that, for the purpose of the orders requested under section 130(b) of the Act, to do so would not be prejudicial to the public interest;

IT IS ORDERED:

1. under section 123(a) of the Act, that section 121(2)(b) of the Act does not apply to the investment by the Terminating Funds in units of the Continuing Fund, provided that, immediately following such investment or within three business days, all of the assets of the Terminating Funds, namely the units of the Continuing Fund, are distributed to the unitholders of the Terminating Funds and as soon as reasonably possible thereafter, the Terminating Funds are terminated; and

2. under section 130(b) of the Act, that Barclays and State Street are exempt from the requirements of section 126(a) of the Act with respect to the purchase and sale of securities between the Terminating Funds and the Continuing Fund.

DATED on March 3, 2000


Margaret Sheehy
      Director
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