Aberdeen G7 Trust - ss. 74(1) of the Act and ss. 59(1) of Schedule I of the Regulation

January 29, 2002

Ruling

Headnote

Subsection74(1) - Issuer exempt from sections 25 and 53 of the Act in connectionwith the writing of over-the-counter covered call options, subjectto certain conditions. Subsection59(1), Schedule I - Issuer exempt from the fees prescribed bysubsection 28(2) of Schedule I of the Regulation in connectionwith the writing of over-the-counter covered call options. StatutesCited SecuritiesAct, R.S.O. 1990, c. S.5, as am., ss. 25, 53 and 74(1). RegulationsCited Regulationmade under the Securities Act, R.R.O. 1990, Reg. 1015, as am.,ss. 28(2) and 59(1) of Schedule I.

INTHE MATTER OF
THE SECURITIES ACT
R.S.O. 1990, CHAPTER S. 5, AS AMENDED (the "Act")

AND

INTHE MATTER OF
R.R.O. 1990, REGULATION 1015, AS AMENDED (the "Regulation")

AND

INTHE MATTER OF
ABERDEEN G7 TRUST

RULINGAND EXEMPTION
(Subsection 74(1) of the Act and Subsection 59(1) of
Schedule I of the Regulation)

UPONthe application of Aberdeen Asset Managers (C.I.) Limited (the"Investment Manager"), as the investment manager of AberdeenG7 Trust (the "Trust"), to the Ontario Securities Commission(the "Commission") for a ruling:

(i)pursuant to subsection 74(1) of the Act that the writing ofcertain over-the-counter covered call options and cash coveredput options (collectively, the "OTC Options") by the Trust isnot subject to sections 25 and 53 of the Act; and (ii)pursuant to subsection 59(1) of Schedule I of the Regulation,exempting the Trust from the payment of the fees required tobe paid under section 28 of Schedule I of the Regulation inconnection with the writing of certain OTC Options by the Trust; ANDUPON considering the application and the recommendationof the staff of the Commission; ANDUPON the Investment Manager having represented to theCommission as follows: 1.The Trust is an investment trust established under the lawsof Ontario pursuant to a trust agreement dated January 24, 2002between State Street Trust Company Canada, as trustee of theTrust, and the Investment Manager. 2.The principal office of the Trust is State Street FinancialCentre, Suite 1100, 30 Adelaide Street East, Toronto, OntarioM5C 3G6. 3.The Trust is authorized to issue an unlimited number of transferable,redeemable trust units (the "Units") of one class, each of whichrepresents an equal, undivided interest in the net assets ofthe Trust. 4.In connection with the public offering (the "Offering") of theUnits, the Trust obtained a receipt for its (final) prospectusdated January 24, 2002 (the "Prospectus") from the Directorand also from the securities regulatory authority in each ofthe other provinces and territories of Canada (collectively,the "Canadian Securities Regulatory Authorities") under SEDARProject No. 408611. 5.The Units are redeemable at the option of the holder on a monthlybasis at a price computed by reference to the value of a proportionateinterest in the net assets of the Trust. As a result, the Trustis a "mutual fund" under the securities legislation of certainprovinces of Canada (excluding the Province of Quebec). 6.However, the operation of the Trust differs from that of a conventionalmutual fund as contemplated in National Instrument 81-102 ("NI81-102") in several ways. These differences are elaborated inthe decision document dated January 24, 2002 issued by the Commissionon behalf of the Canadian Securities Regulatory Authorities(other than the securities regulatory authority in the Provinceof Quebec) (under SEDAR Project No. 408622) pursuant to whichthe Trust was exempted from certain requirements of NI 81-102. 7.The Investment Manager is a corporation organized under thelaws of the Channel Islands and will provide investment advisoryand portfolio management services to the Trust. 8.The Investment Manager is registered under the Act as a non-Canadianadviser in the categories of investment counsel and portfoliomanager. Chris Fishwick, a director of the Investment Managerwho is principally responsible for supervising the managementof the Portfolio (as defined below), is registered with theCommission as a counselling officer of the Investment Manager. 9.The Trust's investment objectives are: (i) to provide holdersof the Units (the "Unitholders") with a stable stream of monthlydistributions targeted at $0.125 per Unit ($1.50 per annum or10.00% on the original issue price); and (ii) to preserve andpotentially enhance the value of the Portfolio in order to returnat least the original issue price of the Units ($15.00 per Unit)to Unitholders upon the termination of the Trust on December31, 2008. 10.The Trust will invest the net proceeds of the Offering in adiversified portfolio (the "Portfolio") consisting principallyof equity securities issued primarily by companies selectedfrom the Morgan Stanley Capital International World Index (or,in the event that index ceases to be maintained, an equivalentreplacement or substitute index determined by the InvestmentManager in its sole discretion) having a market capitalizationin excess of US $5 billion and listed for trading on a majorNorth American stock exchange, a major international stock exchangeor on the Nasdaq National Market®. 11.To generate additional returns above the dividend income generatedby the Portfolio, the Trust will, from time to time write coveredcall options in respect of all or part of the securities inthe Portfolio. In addition, the Trust may write cash coveredput options on securities in which the Trust is permitted toinvest. 12.The Trust may, from time to time, hold a portion of its assetsin cash and cash equivalents. The Trust may from time to time,utilize such cash and cash equivalents to provide cover in respectof the writing of cash covered put options, which is intendedto generate additional returns and to reduce the net cost ofacquiring the securities subject to the put options. 13.The purchasers of OTC Options written by the Trust will be "QualifiedParties" as defined in Appendix "A" to this ruling. 14.The writing of OTC Options by the Trust will not be used asa means for the Trust to raise new capital. ANDUPON the Commission being satisfied that to do so wouldnot be prejudicial to the public interest; ITIS RULED, pursuant to subsection 74(1) of the Act,that the writing of OTC Options by the Trust, as contemplatedby paragraphs 11 and 12 of this ruling, shall not be subjectto sections 25 and 53 of the Act provided that: (a)the portfolio adviser advising the Trust with respect to suchactivities is registered as an adviser under the Act and hassatisfied, or has been exempted from satisfying, any applicableproficiency requirements in Ontario for advising with respectto such options; and (b)each purchaser of an OTC Option written by the Trust is a "QualifiedParty" as defined in Appendix "A" to this ruling. ANDPURSUANT to subsection 59(1) of Schedule I to the Regulation,the Trust is hereby exempted from the fees which would otherwisebe payable pursuant to section 28 of Schedule I of the Regulationin connection with any OTC Options written by the Trust in relianceon the above ruling. January29, 2002 "RobertW. Korthals" "H. Lorne Morphy"

APPENDIX"A"

QUALIFIEDPARTIES

Interpretation

1. Theterms "subsidiary" and "holding body corporate" used in paragraphs(w), (x) and (y) of paragraph 3 of this Appendix have the samemeaning as they have in the Business Corporations Act(Ontario).2.All requirements contained in this Appendix that are based onthe amounts shown on the balance sheet of an entity apply to theconsolidated balance sheet of the entity. QualifiedParties Acting as Principal 3.The following are qualified parties for all OTC derivatives transactions,if acting as principal: Banks (a)A bank listed in Schedule I, II or III to the Bank Act(Canada). (b)The Business Development Bank of Canada incorporated under theBusiness Development Bank of Canada Act (Canada). (c)A bank subject to the regulatory regime of a country that is amember of the Basel Accord or that has adopted the banking andsupervisory rules set out in the Basel Accord, if the bank hasa minimum paid up capital and surplus, as shown on its last auditedbalance sheet, in excess of $25 million or its equivalent in anothercurrency. CreditUnions and Caisses Populaires (d)A credit union central, federation of caisses populaires, creditunion or regional caisse populaire, located, in each case, inCanada. Loanand Trust Companies (e)A loan corporation or trust corporation registered under the Loanand Trust Corporations Act (Ontario) or under the Trustand Loan Companies Act (Canada), or under comparable legislationin any other province or territory of Canada. (f)A loan company or trust company subject to the regulatory regimeof a country that is a member of the Basel Accord or that hasadopted the banking and supervisory rules set out in the BaselAccord, if the loan company or trust company has a minimum paidup capital and surplus, as shown on its last audited balance sheet,in excess of $25 million or its equivalent in another currency. InsuranceCompanies (g)An insurance company licensed to do business in Canada or a provinceor territory of Canada. (h)An insurance company subject to the regulatory regime of a countrythat is a member of the Basel Accord or that has adopted the bankingand supervisory rules set out in the Basel Accord, if the insurancecompany has a minimum paid up capital and surplus, as shown onits last audited balance sheet, in excess of $25 million or itsequivalent in another currency. SophisticatedEntities (i)A person or company that, together with its affiliates, (i)has entered into one or more transactions involving OTC derivativeswith counterparties that are not its affiliates, if (A)the transactions had a total gross dollar value of or equivalentto at least $1 billion in notional principal amount; and (B)any of the contracts relating to one of these transactions wasoutstanding on any day during the previous 15-month period, or (ii)had total gross marked-to-market positions of or equivalent toat least $100 million aggregated across counterparties, with counterpartiesthat are not its affiliates in one or more transactions involvingOTC derivatives on any day during the previous 15-month period. Individuals (j)An individual who, either alone or jointly with the individual'sspouse, has a net worth of at least $5 million, or its equivalentin another currency, excluding the value of his or her principalresidence. Governments/Agencies (k)Her Majesty in right of Canada or any province or territory ofCanada and each crown corporation, instrumentality and agencyof a Canadian federal, provincial or territorial government. (l)A national government of a country that is a member of the BaselAccord, or that has adopted the banking and supervisory rulesof the Basel Accord, and each instrumentality and agency of thatgovernment or corporation wholly-owned by that government. Municipalities (m)Any Canadian municipality with a population in excess of 50,000and any Canadian provincial or territorial capital city. Corporationsand other Entities (n)A company, partnership, unincorporated association or organizationor trust, other than an entity referred to in paragraph (a), (b),(c), (d), (e), (g) or (h), with total revenue or assets in excessof $25 million or its equivalent in another currency, as shownon its last financial statement, to be audited only if otherwiserequired. PensionPlan or Fund (o)A pension fund that is regulated by either the Office of the Superintendentof Financial Institutions (Canada) or a provincial pension commission,if the pension fund has total net assets, as shown on its lastaudited balance sheet, in excess of $25 million, provided that,in determining net assets, the liability of a fund for futurepension payments shall not be included. MutualFunds and investment Funds (p)A mutual fund or non-redeemable investment fund if each investorin the fund is a qualified party. (q)A mutual fund that distributes its securities in Ontario, if theportfolio manager of the fund is registered as an adviser, otherthan a securities adviser, under the Act or securities legislationelsewhere in Canada. (r)A non-redeemable investment fund that distributes its securitiesin Ontario, if the portfolio manager of the fund is registeredas an adviser, other than a securities adviser, under the Actor securities legislation elsewhere in Canada. Brokers/InvestmentDealers (s)A person or company registered under the Act or securities legislationelsewhere in Canada as a broker or an investment dealer or both. (t)A person or company registered under the Act as an internationaldealer if the person or company has total assets, as shown onits last audited balance sheet, in excess of $25 million or itsequivalent in another currency. FuturesCommission Merchants (u)A person or company registered under the CFA as a dealer in thecategory of futures commission merchant, or in an equivalent capacityelsewhere in Canada. Charities (v)A registered charity under the Income Tax Act (Canada)with assets not used directly in charitable activities or administration,as shown on its last audited balance sheet, of at least $5 millionor its equivalent in another currency. Affiliates (w)A wholly-owned subsidiary of any of the organizations describedin paragraph (a), (b), (c), (d), (e), (f), (g), (h), (j), (n),(o), (s), (t) or (u). (x)A holding body corporate of which any of the organizations describedin paragraph (w) is a wholly-owned subsidiary. (y)A wholly-owned subsidiary of a holding body corporate describedin paragraph (x). (z)A firm, partnership, joint venture or other form of unincorporatedassociation in which one or more of the organizations describedin paragraph (w), (x) or (y) have a direct or indirect controllinginterest. GuaranteedParty (aa)A party whose obligations in respect of the OTC derivatives transactionfor which the determination is made is fully guaranteed by anotherqualified party. QualifiedParty Not Acting as Principal 4.The following are qualified parties, in respect of all OTC derivativetransactions: ManagedAccounts (a)Accounts of a person, company, pension fund or pooled fund trustthat are fully managed by a portfolio manager or financial intermediaryreferred to in paragraphs (a), (d), (e), (g), (s), (t), (u) or(w) of paragraph 3 or a broker or investment dealer acting asa trustee or agent for the person, company, pension fund or pooledfund trust under section 148 of the Regulation. SubsequentFailure to Qualify 5.A party is a qualified party for the purpose of any OTC derivativestransaction if it, he or she is a qualified party at the timeit, he or she enters into the transaction.