ABN AMRO Bank N.V and ABN AMRO Bank Canada - MRRS Decision

Headnote

Investment by mutual fund in securities of another mutual fund that is under commonmanagement. Exemption from the requirements of section 101.

Statutes Cited

Securities Act (Ontario), R.S.O. 1990 c.S.5, as am. Ss. 101, 104(2)(c)

WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,Nova Scotia and Newfoundland (the "Jurisdictions") has received an application from ABNAMRO Bank N.V. (Multi Branch) and ABN AMRO Bank Canada (individually, an"Applicant", and collectively, the "Applicants") for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation") that the requirements contained in theLegislation triggered by the acquisition of 10% or more of the outstanding securities of areporting issuer (the "Early Warning Requirements") and the corresponding restrictions onfurther acquisitions (the "Moratorium Requirements") do not apply to the Applicants inrespect of an investment by an Applicant in units or securities of Corresponding Funds (asdefined below) where:

(a) an Applicant enters into a forward contract or other permitted derivative transaction( a "Forward Contract") directly with a fund that is a fully qualified investment forregistered plans such as RRSPs the units or securities of which are not "foreignproperty" for the purposes of the Income Tax Act ( Canada) (the "Tax Act") (eachsuch fund hereinafter referred to as an "RSP Fund" and collectively as the "RSPFunds")'

(b) the respective underlying interest of each forward contract is units or securities ofa related corresponding fund that is "foreign property" for the purposes of the TaxAct (each such fund, with respect to the corresponding RSP Fund having the sameinvestment objective, is hereinafter referred to as a "Corresponding Fund" andcollectively as the "Corresponding Funds");

(c) an Applicant purchases units or securities of a Corresponding Fund pursuant to aprospectus for which a receipt has been issued in order to hedge its obligationsunder the corresponding Forward Contract;

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System") the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS the Applicants have represented to the Decision Makers that:

1. ABN AMRO Bank N.V. (Multi Branch) is a Netherlands-based bank.

2. ABN AMRO Bank Canada is a bank with its head office located in Toronto, Ontario.

3. Neither ABN AMRO Bank N.V. nor ABN AMRO Bank Canada is a reporting issuerin any province or territory of Canada.

4. The RSP Funds and the Corresponding Funds (collectively, the "Funds") are or willbe open-end mutual fund trusts or corporations established under the laws ofCanada or a province thereof.

5. The Funds are or will be reporting issuers under the securities laws of one or moreof the provinces and territories of Canada. The units or securities of the Funds willbe qualified for sale pursuant to a prospectus or simplified prospectus and annualinformation form.

6. The RSP Funds propose to enter into Forward Contracts or other permittedderivative instruments that are linked to the performance of the CorrespondingFunds, while ensuring that units or securities of the RSP Funds do not constitute"foreign property" under the Tax Act for registered tax deferral plans.

7. The investment objectives, practices and restrictions of the Funds are or will be setout in their respective prospectuses.

8. The structure of the RSP Funds permits investors to increase their exposure toforeign securities markets beyond the current 20% foreign property limit imposedby the Tax Act, without being subject to a penalty tax.

9. The value of the Forward Contracts will be linked to the value of the CorrespondingFunds. It is expected that each of the Forward Contracts will be entered into andsettled on a monthly or quarterly basis. Certain contracts will be adjusted daily toreflect the net amounts received by the RSP Funds in respect of purchases of theirunits or securities, the amounts paid in respect of redemption of their units orsecurities, the cost of the Forward Contracts and the expenses paid by such RSPFunds. All payments under the Forward Contracts are to be made only in cash andno RSP Fund will have any entitlement or right to securities of the CorrespondingFund held by an Applicant. Each Forward Contract creates economic exposure tothe Corresponding Fund by delivering to the related RSP Fund a cash paymentfrom an Applicant substantially equal to the investment return, if any, in suchCorresponding Fund, less the cost of the Forward Contract and the operatingexpenses of the RSP Fund. Any investment loss in a Corresponding Fund resultsin a cash payment by the related RSP Fund to an Applicant.

10. In order for an Applicant to hedge its position under the Forward Contracts, theApplicant may acquire directly units or securities of the Corresponding Funds. Thenumber of units or securities of the Corresponding Funds to be acquired from timeto time by the Applicant pursuant to its hedging program cannot be determined inadvance and will change daily. Both the Applicant's subscriptions for units orsecurities and requests for redemption of units or securities of the CorrespondingFunds will be linked to the number of units or securities subscribed for andredeemed from day to day by investors in the RSP Funds.

11. All purchases of a Corresponding Fund by an Applicant will be from treasury of theCorresponding Fund.

12. The Applicants may, from time to time, acquire beneficial ownership of more than10% of the outstanding units or securities of a Corresponding Fund.

13. The prospectuses of the RSP Funds will at all relevant times disclose generally thatcounterparties to Forward Contracts with the RSP Funds may purchase units orsecurities of the Corresponding Funds for hedging purposes and the possibleeffects thereof.

AND WHEREAS pursuant to the System this MMRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the decisionhas been met;

THE DECISION of the Decision Makers pursuant to the Legislation is that the EarlyWarning Requirements, the Moratorium Requirements contained in the Legislation shallnot apply to an Applicant in respect of acquisitions of units or securities of anyCorresponding Fund purchased in order to hedge its obligations under the ForwardContracts.

February 22, 2000.

"J. A. Geller"     "R. Stephen Paddon"