Proposed Rule: OSC Rule - 81-501 - Mutual Fund Reinvestment Plans

PART 1 DEFINITION

1.1 Definition - In this Rule, "reinvestment plan" means a plan that

(a) permits or requires that a dividend or distribution of income, capital or capital gain made by a mutual fund and attributable to securities issued by the mutualfund be reinvested in securities of the same class or series as the securities to which the dividend or distribution of income, capital or capital gain is attributable,and

(b) is made available or applicable to all holders of the securities to which the dividend or distribution is attributable.

PART 2 REGISTRATION AND PROSPECTUS EXEMPTION

2.1 Registration and Prospectus Exemption

(1) Sections 25 and 53 of the Act do not apply to a trade by a mutual fund of a security under a reinvestment plan if

(a) no sales charge is payable on the trade; and

(b) the mutual fund has caused to be sent to the person or company to whom the security is traded, not more than 12 months before the trade, a statementdescribing

(i) details of any deferred or contingent sales charge or redemption fee that is payable at the time of the redemption of the security,

(ii) any right that the person or company has to make an election to receive cash instead of securities on the payment of a dividend or making of a distribution bythe mutual fund,

(iii) instructions on how the right referred to in subparagraph (ii) can be exercised, and

(iv) the name and address of the person or company from whom a copy of the current prospectus of the mutual fund may be obtained or, if there is no currentprospectus, notice of this fact and an explanation of the reason.

(2) The condition referred to in paragraph (1)(b) is satisfied if the statement referred to in that paragraph is contained in the annual report of the mutual fund or iscontained in the current prospectus of the mutual fund if that prospectus was sent to the person or company referred to in paragraph (1)(b).

ONTARIO SECURITIES COMMISSION RULE 81-501

MUTUAL FUND REINVESTMENT PLANS

PART 1 DEFINITION 1

1.1 Definition 1

PART 2 REGISTRATION AND PROSPECTUS EXEMPTION 1

2.1 Registration and Prospectus Exemption 1