Galileo Global Equity Advisors Inc.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief granted from paragraph 13.5(2)(b) of NI 31-103 to permit inter-fund trading between public funds, pooled funds and managed accounts managed by the same manager or its affiliate -- relief subject to conditions, including IRC approval and pricing requirements -- certain trades involving exchange-traded securities permitted to occur at last sale price as defined in the Universal Market Integrity Rules -- exemption also granted from conflict of interest trading prohibition in paragraph 13.5(2)(b) to permit in-specie subscriptions and redemptions by separately managed accounts and pooled funds and to permit a one-time in-specie transaction between related pooled funds in connection with implementing a master/feeder, fund-on-fund structure -- relief subject to conditions.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements and Exemptions, ss. 13.5, 15.1.

National Instrument 81-107 Independent Review Committee for Investment Funds, ss. 6.1(2), 6.1(4).

October 15, 2018

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
GALILEO GLOBAL EQUITY ADVISORS INC.
("Galileo")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from Galileo for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for a decision (the Exemption Sought) pursuant to section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) exempting the Filer from the prohibitions in paragraph 13.5(2)(b) of NI 31-103 (the Trading Prohibition) which prohibit a registered adviser from knowingly causing an investment portfolio managed by it, including an investment fund for which it acts as an adviser, to purchase or sell the securities of any issuer from or to the investment portfolio of an associate of a responsible person or any investment fund for which a responsible person acts as an adviser, to permit:

(a) a Public Fund (as defined below) to purchase securities from or sell securities to a Pooled Fund (as defined below);

(b) a Pooled Fund to purchase securities from, or sell securities to, another Fund (as defined below)

(c) a Managed Account (as defined below) to purchase securities from, or sell securities to, a Fund,

and, in each case, for the purchase and sale described above of exchange-traded securities to occur at the Last Sale Price (as defined below) in lieu of the Closing Sale Price (as defined below);

(d) a Public Fund to purchase exchange-traded securities from or sell exchange-traded securities to another Public Fund at the Last Sale Price in lieu of the Closing Sale Price;

(a purchase or sale of securities described in paragraph (a) through (d) above being referred to herein as an Inter-Fund Trade);

(e) the exchange of portfolio securities of each of the Terminating Trusts with the Initial Underlying Fund in and the subsequent wind up of each Terminating Trust (the Reorganization Portfolio Trade);

(f) the purchase by a Managed Account of securities of a Fund, and the redemption of securities of a Fund held by a Managed Account, and as payment:

(i) for such purchase, in whole or in part, by the Managed Account making good delivery of portfolio securities to the Fund; and

(ii) for such redemption, in whole or in part, by the Managed Account receiving good delivery of portfolio securities from the Fund; and

(g) securities held by a Pooled Fund in another Fund, and as payment:

(i) for such purchase, in whole or in part, by the Fund making good delivery of portfolio securities to the other Fund; and

(ii) for such redemption, in whole or in part, by the Fund receiving good delivery of portfolio securities from the other Fund;

(a purchase or redemption described in paragraph (f) or (g) above being referred to herein as an In Specie Transaction);

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission (the Commission) is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4.7(2) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in respect of the Exemption Sought in each of the other provinces and territories of Canada (together with Ontario, the Passport Jurisdictions).

Interpretation

Terms defined in the Legislation, MI 11-102, National Instrument 14-101 Definitions, NI 31-103, National Instrument 81-102 Investment Funds (NI 81-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107) have the same meanings in this decision, unless otherwise defined. In addition:

Closing Sale Price means the current market price of the security as defined in subparagraph 6.1(1)(a)(i) of NI 81-107;

Filer means, unless otherwise specified, Galileo or a future affiliate of Galileo;

Fund means a Public Fund or a Pooled Fund;

IRC means an independent review committee as defined in NI 81-107;

Initial Top Fund means Galileo Technology and Blockchain RSP Fund, which, when formed, will be a Pooled Fund for which Galileo will act as investment fund manager and portfolio manager;

Initial Underlying Fund means Galileo Technology and Blockchain LP, a Pooled Fund for which Galileo acts as investment fund manager and portfolio manager;

Inter-Fund Trade means the purchase and sale of securities between two Funds, or between a Managed Account and a Fund;

Last Sale Price means in respect of a security traded on an exchange, the last sale price, as defined in the Universal Market Integrity Rules of the Investment Industry Regulatory Organization of Canada, on that exchange, prior to the execution of the trade on that trading day;

Managed Account means an account managed by the Filer for a client that is not a responsible person and over which the Filer has discretionary authority;

Pooled Fund means an existing or future investment fund to which neither NI 81-102 nor NI 81-107 apply and for which the Filer will act as investment fund manager and/or portfolio manager;

portfolio manager has the meaning ascribed to it in NI 31-103;

Public Fund means an existing or future investment fund to which NI 81-102 and NI 81-107 apply and for which the Filer will act as investment fund manager and/or portfolio manager;

responsible person has the meaning ascribed to it in subsection 13.5(1) of NI 31-103;

Top Fund means a Pooled Fund that invests in another Pooled Fund; and

Underlying Fund means a Fund in which a Pooled Fund holds securities.

Representations

This decision is based on the following facts represented by the Filer:

The Filer

1. The Filer is a corporation existing under the laws of the Province of Ontario with its head office in Toronto, Ontario.

2. The Filer currently is registered as:

(a) a portfolio manager under the securities legislation of Ontario and British Columbia;

(b) an investment fund manager under the securities legislation of Ontario, Quebec and Newfoundland and Labrador; and

(c) an exempt market dealer under the securities legislation of Ontario, Alberta and British Columbia.

3. The Filer is or will be the investment fund manager of:

(a) two Public Funds, (i) Galileo High Income Plus Fund and (ii) Galileo Global Opportunities Fund;

(b) two Pooled Funds to be terminated as part of the Reorganization, (i) Galileo Partners Fund and (ii) Galileo Technology and Blockchain Fund (the Terminating Trusts); and

(c) two Pooled Funds formed or established in connection with the Reorganization, (i) Galileo Technology and Blockchain RSP Fund (the Initial Top Fund) and (ii) Galileo Technology and Blockchain LP (the Initial Underlying Fund).

4. The Filer acts as the trustee of each existing Fund established as a trust and as the investment fund manager of each existing Fund.

5. The Filer or an affiliate:

(a) will act as the investment fund manager of each future Fund;

(b) may act as the trustee of each future Fund established as a trust;

(c) acts, or may act, as the portfolio manager to each Fund; and

(d) acts as the adviser to each Managed Account.

6. An affiliate of the Filer will act as general partner of the Initial Underlying Fund.

7. A third party may act as trustee for future Funds established as trusts.

8. The Filer is not a reporting issuer in any jurisdiction and is not in default of securities legislation of any Passport Jurisdiction.

9. Each affiliate will be registered, as required, as an investment fund manager, portfolio manager, or both.

10. The Filer or an affiliate has or will have complete discretion to invest and reinvest the assets of each Fund and Managed Account and is or will be responsible for executing all portfolio transactions. Furthermore, the Filer may act as a distributor of securities of the Funds not otherwise sold through another registered dealer.

The Funds

11. Each Fund is, or will be, an investment fund that is structured as a limited partnership, trust or corporation under the laws of a Passport Jurisdiction or a foreign jurisdiction.

12. Each Fund's reliance on the Exemption Sought will be compatible with its investment objective and strategies.

13. Each Public Fund is, or will be, a reporting issuer under the securities legislation of one or more Passport Jurisdictions and whose securities are, or will be, qualified for distribution pursuant to a prospectus and, if applicable, annual information form and fund facts that have been, or will be, prepared and filed in accordance with the securities legislation of those Passport Jurisdictions.

14. The securities of each Pooled Fund are, or will be, distributed on a private placement basis pursuant to the securities legislation of the Passport Jurisdictions and no Pooled Fund is, or will be, a reporting issuer under the securities legislation of any Passport Jurisdiction.

15. Each existing Fund is not in default of the securities legislation of any Passport Jurisdiction.

The Terminating Trusts and the Reorganization

16. Galileo Partners Fund is a trust established in January 2012 under the laws of the Province of Ontario pursuant to a declaration of trust dated January 3, 2012. The trust was formed to facilitate long-term capital appreciation by investing in leading sectors while short selling weak companies in poorly performing sectors.

17. Galileo Technology and Blockchain Fund is a trust established in November 2017 under the laws of the Province of Ontario pursuant to a declaration of trust dated January 3, 2012. The trust was formed to facilitate long-term capital appreciation by investing in early-stage companies in growth sectors including financial technology, artificial intelligence and blockchain companies while short selling weak companies in poorly performing sectors.

18. The Filer wishes to transfer the investment portfolio of each of the Terminating Trusts to the Initial Underlying Fund (the Reorganization) such that the Initial Underlying Fund will become the master fund of a master-feeder, fund-on-fund structure in which the Terminating Trusts are, and other Future Top Funds may be, feeder funds, as further described below. Immediately following the Reorganization, the Terminating Trusts will be wound up.

19. Following the wind up of the Terminating Trusts, the Initial Underlying Fund will be owned by the former investors in the Terminating Trusts and, as soon as securities of the Initial Top Trust are issued to investors, the Initial Top Fund.

Reorganization via In Specie Transactions

20. The Filer wishes to effect the Reorganization by way of an in specie transaction pursuant to which each Terminating Trust will sell to the Initial Underlying Fund all of its portfolio securities and other assets in exchange of units of the Initial Underlying Fund (the "Reorganization In Specie Transactions").

21. The Filer will seek securityholder approval to implement the Reorganization and the Reorganization In Specie Transactions.

22. The securityholders of each Terminating Trust will receive a notice describing the Reorganization, the reasons for, and benefits of, the Reorganization. The securityholders of each Terminating Trust will also receive a copy of the offering memorandum for the Initial Underlying Fund prior to the Reorganization.

23. No redemption fees, sales charges, or other fees or commissions will be payable by securityholders of the Terminating Trusts in connection with the Reorganization, and all costs of the Reorganization will be borne by the Filer.

24. The portfolio assets of each Terminating Trust to be acquired by the Initial Underlying Fund pursuant to the Reorganization will be acceptable to the portfolio manager of the Initial Underlying Fund and consistent with the investment objective of the Initial Underlying Fund.

25. Each Terminating Trust will transfer its portfolio assets to the Initial Underlying Fund and it is anticipated there will be no additional tax consequences for securityholders of the Terminating Trusts as a result of the Reorganization as compared to the Terminating Trusts winding-up without transferring their assets to the Initial Underlying Fund.

26. It is anticipated that the proposed Reorganization will be completed promptly following the granting of the Exemption Sought (the Effective Date).

27. The units of the Initial Underlying Fund that each Terminating Trust receives in exchange for its portfolio assets will have an aggregate value equal to the value of the portfolio assets of such Terminating Trust determined as at the close of business on the Effective Date in accordance with the valuation policies and procedures outlined in the offering memorandum of the Terminating Trusts.

28. The Reorganization will be subject to compliance with written policies and procedures of the Filer that are consistent with applicable securities legislation and the oversight of the Filer's chief compliance officer to ensure that the Reorganization represents the business judgment of the Filer acting in its discretionary capacity with respect to each Terminating Trust and the Initial Underlying Fund, uninfluenced by considerations other than the best interests of each Terminating Trust and the Initial Underlying Fund.

Inter-Fund Trades

29. When the Filer engages in an Inter-Fund Trade it will follow the following procedures:

(a) in respect of a purchase or a sale of a security by a Fund or Managed Account as applicable (Portfolio A), the portfolio manager of the Filer will either place the trade directly or will deliver the trade instructions to a trader on a trading desk of the Filer;

(b) in respect of a sale or a purchase of a security by another Fund or Managed Account as applicable (Portfolio B), the portfolio manager of the Filer will either place the trade directly or will deliver the trade instructions to a trader on a trading desk of the Filer;

(c) each portfolio manager of the Filer will request the approval of the chief compliance officer of the Filer (or his or her designated alternate during periods when it is not practicable for the chief compliance officer to address the matter) (the CCO) to execute the trade as an Inter-Fund Trade;

(d) once the portfolio manager or trader on the trading desk has confirmed the approval of the CCO, the portfolio manager or the trader on the trading desk will have the discretion to execute the trade as an Inter-Fund Trade between Portfolio A and Portfolio B in accordance with the requirements of paragraphs (c) to (g) of subsection 6.1(2) of NI 81-107, except that for purposes of paragraph (e) of subsection 6.1(2) in respect of exchange-traded securities, the trade may be executed at the Last Sale Price;

(e) the policies applicable to the portfolio manager and the trading desk of the Filer will require that all Inter-Fund Trade orders are to be executed on a timely basis and will remain open only for 30 days unless the portfolio manager cancels the order sooner; and

(f) the portfolio manager or the trader on a trading desk will advise the Filer of the price at which the Inter-Fund Trade occurred.

Managed Accounts

30. The Filer or an affiliate is, or will be, the adviser of each Managed Account.

31. Each Managed Account is, or will be, managed pursuant to an investment management agreement or other documentation that is, or will be, executed by each client who wishes to receive the portfolio management services of the Filer and which provides the Filer full discretionary authority to trade in securities for the Managed Account without obtaining the specific consent of the client to execute the trade.

32. The investment management agreement or other documentation in respect of each Managed Account contains, or will contain, authorization from the client for the Filer to make Inter-Fund Trades and/or enter into In Specie Transactions.

Independent Review Committee

33. Each Public Fund has, or will have, an independent review committee (an IRC) in accordance with the requirements of NI 81-107. Each Inter-Fund Trade by a Public Fund with a Managed Account will be authorized by the IRC of the Public Fund under section 5.2 of NI 81-107, and the Filer will comply with section 5.4 of NI 81-107 in respect of any standing instructions the IRC provides in connection with such Inter-Fund Trade.

34. Though the Pooled Funds are not, and will not be, subject to the requirements of NI 81-107, each Pooled Fund will have an IRC at the time the Pooled Fund makes an Inter-Fund Trade. The mandate of the IRC of each Pooled Fund will include approving Inter-Fund Trades.

35. If the IRC of a Pooled Fund becomes aware of an instance where the Filer did not comply with the terms of this decision or a condition imposed by securities legislation or the IRC in its approval, the IRC of the Pooled Fund will, as soon as practicable, notify in writing the securities regulatory authority or regulator in the Passport Jurisdiction under which the Pooled Fund is organized.

In Specie Transactions

36. When acting for a Managed Account of a client, the Filer wishes to be able, in accordance with the investment objectives and restrictions of the client, to cause the client's Managed Account to either invest in securities of a Fund, or to redeem such securities, pursuant to an In Specie Transaction.

37. In acting on behalf of a Pooled Fund, the Filer wishes to be able, in accordance with the investment objectives and restrictions of the Pooled Fund, to cause the Pooled Fund to either invest in securities of another Fund, or to redeem such securities, pursuant to an In Specie Transaction.

38. The Filer has determined that effecting the In Specie Transactions of securities between a Fund and a Managed Account or between a Fund and another Fund will allow the Filer to manage each asset class more effectively and reduce transaction costs for the client, as applicable, and the Funds. For example, In Specie Transactions may:

(a) reduce market impact costs, which can be detrimental to clients and/or the Funds; and

(b) allow a portfolio manager to retain within its control institutional-size blocks of securities that otherwise would need to be broken and re-assembled.

39. The only cost which will be incurred by a Fund or a Managed Account for an In Specie Transaction is a nominal administrative charge levied by the custodian of the Fund in recording the trades and/or any commission charged by the dealer executing the trade.

40. At the time of each In Specie Transaction, the Filer will have in place policies and procedures governing such transactions, including the following:

(a) each In Specie Transaction involving a Public Fund will be referred to its IRC for approval in accordance with the requirements of subsection 5.2(2) of NI 81-107;

(b) the Filer has obtained, or will obtain, the written consent of the relevant client before it engages in any In Specie Transaction in connection with the purchase or redemption of securities of a Fund for the Managed Account;

(c) the portfolio securities transferred in an In Specie Transaction will be consistent with the investment criteria of the Fund or Managed Account, as the case may be, acquiring the portfolio securities;

(d) the portfolio securities transferred in In Specie Transactions will be valued on the same valuation day using the same valuation principles as are used to calculate the net asset value for the purpose of the issue price or redemption price of securities of the Fund;

(e) with respect to the purchase of securities of a Fund, the portfolio securities transferred to the Fund in an In Specie Transaction as purchase consideration for those securities will be valued as if the portfolio securities were assets of the Fund and in accordance with subparagraph 9.4(2)(b)(iii) of NI 81-102;

(f) with respect to the redemption of securities of a Fund, the portfolio securities transferred in consideration for the redemption price of those securities will have a value at least equal to the amount at which those portfolio securities were valued in calculating the net asset value per security used to establish the redemption price of the securities in accordance with paragraph 10.4(3)(b) of NI 81-102;

(g) the valuation of any illiquid securities which would be the subject of an In Specie Transaction will be carried out according to the Filer's policies and procedures for the fair valuation of portfolio securities, including illiquid securities. Should any In Specie Transaction involve the transfer of an "illiquid asset" (as defined in NI 81-102), the Filer will obtain at least one quote for the asset from an independent arm's length purchaser or seller, immediately before effecting the In Specie Transaction;

(h) if any illiquid securities are the subject of an In Specie Transaction, the illiquid securities will be transferred on a pro rata basis. The Funds generally invest in liquid securities. The Filer will not cause any Public Fund to engage in an In Specie Transaction if the applicable Public Fund is not in compliance with the portfolio restrictions on the holding of illiquid securities described in section 2.4 of NI 81-102; and

(I) the Funds will keep written records of each In Specie Transaction, including records of each purchase and redemption of portfolio securities and the terms thereof for a period of five years commencing after the end of the financiaiyear in which the trade occurred, the most recent two years in a reasonably accessible place.

41. The In Specie Transactions will be subject to:

(a) compliance with the written policies and procedures of the Filer respecting In Specie Transactions that are consistent with applicable securities legislation and the Exemption Sought; and

(b) the oversight of the Filer to ensure that the In Specie Transactions represent the business judgment of the Filer acting in its discretionary capacity with respect to the Funds and the Managed Accounts, uninfluenced by considerations other than the best interests of the Funds and Managed Accounts.

Reasons for Exemption Sought

42. For each Fund established as a trust where the Filer is the trustee, such Fund will be an affiliate of the Filer.

43. For each Fund formed as a limited partnership where the Filer controls the general partner:

(a) the general partner will be an associate and affiliate of the Filer;

(b) the limited partnership will be an affiliate of the Filer; and

(c) each director, officer or employee of the Filer who acts as an officer or director of the general partner is a "responsible person" of the Filer.

44. Where the Filer is the adviser to a Fund, the Filer is a responsible person of the Fund.

45. The Filer is a responsible person of each Managed Account.

46. Pursuant to the Trading Prohibition, a registered adviser must not knowingly cause an investment portfolio managed by it, including an investment fund for which it acts as an adviser, to:

(a) purchase a security of an issuer in which a responsible person or an associate of a responsible person is a partner, officer or director unless

(i) this fact is disclosed to the client, and

(ii) the written consent of the client to the purchase is obtained before the purchase (the Consent Requirement); or

(b) purchase or sell a security from or to the investment portfolio of an investment fund for which a responsible person acts as an adviser.

47. The Filer, as the adviser to a Pooled Fund or Managed Account, cannot rely upon the exemption from paragraph 13.5(2)(b) of NI 31-103 codified in subsection 6.1(4) of NI 81-107 because such codified relief is not available in the context of the Pooled Funds and Managed Accounts.

48. Absent the granting of the Exemption Sought, the Filer may be prohibited from engaging in Inter-Fund Trades and In Specie Transactions due to the Trading Prohibition. The Trading Prohibition is similar to the restriction applicable to Public Funds contained in subsection 4.2(1) of NI 81-102. However, there is no statutory relief from the Trading Prohibition equivalent to subsection 4.3(1) of NI 81-102 for purchases and sales of securities with available public quotations. Subsection 6.1(4) of NI 81-107 provides relief from the Trading Prohibition but only if, among other conditions:

(a) the trade involves two investment funds to which NI 81-107 applies (which is not the case when a Managed Account or Pooled Fund is one of the parties to the Inter-Fund Trade); and

(b) the Inter-Fund Trade occurs at the closing market price which, in the case of exchange-traded securities, does not include the Last Sale Price.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

Inter-Fund Trades

1. In connection with the Inter-Fund Trades:

(a) the Inter-Fund Trade is consistent with the investment objective of the Fund or the Managed Account, as applicable;

(b) the Filer refers the Inter-Fund Trade to the IRC of the Fund involved in the manner contemplated by section 5.1 of NI 81-107, and the Filer complies with section 5.4 of NI 81-107 in respect of any standing instructions the IRC provides in connection with the Inter-Fund Trade;

(c) the IRC of each Fund has approved the Inter-Fund Trade in respect of that Fund in accordance with the terms of subsection 5.2(2) of NI 81-107;

(d) if the transaction is with a Managed Account, the investment management agreement or other documentation in respect of the Managed Account contains or will contain the authorization of the client to engage in Inter-Fund Trades and such authorization has not been revoked; and

(e) the Inter-Fund Trade complies with paragraphs (c) to (g) of subsection 6.1(2) of NI 81-107, except that for purposes of paragraph (e) of subsection 6.1(2) in respect of exchange-traded securities, the trade may be executed at the Last Sale Price.

The Reorganization In Specie Transactions

2. In connection with the Reorganization In Specie Transactions, prior to effecting a Reorganization In specie Transaction, the board of directors of the Filer determines that the Reorganization and the Reorganization In specie Transactions are in the best interests of each Terminating Trust and the Initial Underlying Fund.

In Specie Transactions

3. In connection with an In Specie Transaction where a Managed Account acquires securities of a Fund:

(a) if the transaction involves the purchase of securities in a Public Fund, the IRC of the Public Fund has approved the In Specie Transaction on behalf of the Public Fund in accordance with the terms of subsection 5.2(2) of NI 81-107;

(b) the Filer and the applicable IRC complies with section 5.4 of NI 81-107 in respect of any standing instructions the applicable IRC provides in connection with the In Specie Transaction;

(c) the Filer obtains the prior written consent of the client of the Managed Account before it engages in the In Specie Transaction;

(d) the Fund would, at the time of payment, be permitted to purchase the portfolio securities;

(e) the portfolio securities are acceptable to the portfolio manager of the Fund and meet the investment criteria of the Fund;

(f) the value of the portfolio securities is at least equal to the issue price of the securities of the Fund for which they are used as payment, valued as if the portfolio securities were portfolio assets of that Fund;

(g) the account statement next prepared for the Managed Account describes the portfolio securities delivered to the Fund and the value assigned to such portfolio securities; and

(h) the Fund keeps written records of each In Specie Transaction in a financial year of the Fund, reflecting details of the portfolio securities delivered to the Fund and the value assigned to such portfolio securities, for five years after the end of the financial year, the most recent two years in a reasonably accessible place.

4. In connection with an In Specie Transaction where a Managed Account redeems securities of a Fund:

(a) if the transaction involves the redemption of securities in a Public Fund, the IRC of the Public Fund has approved the In Specie Transaction on behalf of the Public Fund in accordance with the terms of subsection 5.2(2) of NI 81-107;

(b) the Filer and the applicable IRC complies with section 5.4 of NI 81-107 in respect of any standing instructions the applicable IRC provides in connection with the In Specie Transaction;

(c) the Filer obtains the prior written consent of the client of the Managed Account before it engages in the In Specie Transaction, and such consent has not been revoked;

(d) the portfolio securities meet the investment criteria of the Managed Account acquiring the portfolio securities and are acceptable to the Filer;

(e) the value of the portfolio securities is equal to the amount at which those portfolio securities were valued by the Fund in calculating the net asset value per unit or share used to establish the redemption price;

(f) the account statement next prepared for the Managed Account describes the portfolio securities received from the Fund and the value assigned to such portfolio securities; and

(g) the Fund keeps written records of each In Specie Transaction in a financial year of the Fund, reflecting details of the securities delivered by the Fund and the value assigned to such securities, for five years after the end of the financial year, the most recent two years in a reasonably accessible place.

5. In connection with an In Specie Transaction where a Pooled Fund purchases securities of a Fund:

(a) if the transaction involves the purchase of securities in a Public Fund, the IRC of the Public Fund has approved the In Specie Transaction on behalf of the Public Fund in accordance with the terms of subsection 5.2(2) of NI 81-107;

(b) the Filer and the applicable IRC comply with section 5.4 of NI 81-107 in respect of any standing instructions the applicable IRC provides in connection with the In Specie Transaction;

(c) the Fund acquiring the portfolio securities would, at the time of payment, be permitted to purchase the portfolio securities;

(d) the portfolio securities are acceptable to the portfolio manager of the Fund acquiring the portfolio securities and meet the investment objective of such Fund;

(e) the value of the portfolio securities is at least equal to the issue price of the units or shares of the Fund issuing the units or shares for which they are used as payment, valued as if the portfolio securities were portfolio assets of that Fund;

(f) each Fund keeps written records of each In Specie Transaction in a financial year of the Fund, reflecting details of the securities delivered to the Fund and the value assigned to such portfolio securities, for five years after the end of the financial year, the most recent two years in a reasonably accessible place.

6. In connection with an In Specie Transaction where a Pooled Fund redeems securities of a Fund:

(a) if the transaction involves the redemption of securities in a Public Fund, the IRC of the Public Fund has approved the In Specie Transaction on behalf of the Public Fund in accordance with the terms of subsection 5.2(2) of NI 81-107;

(b) the Filer and the applicable IRC comply with section 5.4 of NI 81-107 in respect of any standing instructions the applicable IRC provides in connection with the In Specie Transaction;

(c) the portfolio securities are acceptable to the portfolio manager of the Pooled Fund and are consistent with the investment objective of the Pooled Fund acquiring the portfolio securities;

(d) the value of the portfolio securities is equal to the amount at which those securities were valued by the Fund in calculating the net asset value per security used to establish the redemption price;

(e) each Fund keeps written records of each In Specie Transaction in a financial year of the Fund, reflecting details of the portfolio securities delivered by the Fund and the value assigned to such securities, for five years after the end of the financial year, the most recent two years in a reasonably accessible place.

7. The Filer does not receive any compensation in respect of any In Specie Transaction and, in respect of any delivery of portfolio securities further to an In Specie Transaction, the only charges paid by the Managed Account or the applicable Fund is the commission charged by the dealer executing the trade (if any) and/or any administrative charges levied by the custodian.

"Neeti Varma"

Manager (Acting)

Investment Funds and Structured Products

Ontario Securities Commission